Mature IaaS cloud, lower prices grab IT shops' attention

Enterprises used to turn to public cloud services only for the apps they didn't care about, but lower prices and cloud maturity have changed that.

Companies can get just about any application as a service, but conservative IT shops that want their infrastructure firmly planted in their data center continue to use public cloud only for the apps they don't care about.

At least for now.

The public cloud services market is expected to grow 18.5% this year to total $131 billion worldwide, up from $111 billion in 2012, according to Gartner Inc. research released last month.

Infrastructure as a Service (IaaS) continues to be the fastest-growing segment of the market. It grew 42% in 2012 to $6.1 billion and is expected to grow 47% this year to $9 billion, according to Gartner's report.

Companies may warm to IaaS this year because these public cloud platforms have matured and pricing has improved -- thanks to competition among Amazon Web Services (AWS), Microsoft, Google, Rackspace, Hewlett-Packard and others.

"Many of our clients think their internal costs are cheaper than cloud, but cloud is getting cheaper because Amazon [and its competitors] keep lowering prices,"said Dave Bartoletti, an analyst with Forrester Research Inc. "A lot of companies are analyzing their application portfolio to determine which [apps] will drive cloud economics."

Moving to the cloud can be refreshing

Many companies move to the cloud during a software refresh cycle, at which point IT determines if upgrading hardware and software and managing those environments are worth the headache and the cost versus moving to a cloud service, one analyst said.

Most popular cloud market segments

Cloud advertising: 48%

Business process services (BPaaS): 28%

Software as a Service (SaaS):14.7%

Infrastructure as a Service (IaaS): 5.5%

Cloud management and security services: 2.8%

Platform as a service (PaaS):1%

Stats provided by Gartner Inc.

"The question people need to ask is, 'Do you want to get rid of the app, the infrastructure, or all of it?'" Bartoletti said.

If the answer is "the app," there are plenty of Software as a Service, or SaaS versions of on-premises apps. IT can also migrate legacy apps to a public cloud platform -- if they're apps that lend themselves to cloud. The best workloads for cloud are scalable apps that take full advantage of cloud elasticity; apps with fluctuating demand and those that are already virtualized and componentized are good candidates, Bartoletti said.

Email, collaboration and other apps that aren't necessarily critical to business are also good for cloud -- and those are the systems that IT pros plan to put into the cloud this year.

Of the companies that use cloud services, 52% said they will provision their email services to the cloud in 2013; 38% will use cloud-based productivity apps; and about 42% will use a cloud-based file-sharing app, such as DropBox, according to a recent TechTarget Inc. survey of more than 1,500 IT professionals.

Because cloud allows developers to quickly spin up a new software version, enhance it, then turn the cloud instance off when they're finished, companies will continue to put their test and development environments on IaaS platforms, analysts said.

Back-office apps remain in the back office

Meanwhile, back-office applications that don't change very often remain unpopular candidates for the cloud, analysts said. "The app that can't automatically scale isn't a good cloud app -- a monolithic ERP [enterprise resource planning] transaction processing system, for instance," Bartoletti said.

And some apps simply aren't good candidates because of cloud data security concerns.

"In a banking environment, regulations are stringent regarding customer privacy, so even to outsource email is a little dicey," said Christopher Green, vice president for IT infrastructure systems at Washington Trust Bank, a large commercial bank based in Spokane, Wash. "We hold things close to the vest." The bank does use AWS for backup archiving, but they encrypt the data before sending it to the cloud, he said.

Others continue to forgo public cloud altogether in favor of total control.

"I have worked in the cloud before; and like they say, when your Internet is down, that is one thing, but [if] your phones and other things are on there, it's a problem," said Tom Likely, IT manager at Billion Automotive, a large automotive dealership based in the Midwest.

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