Forrester: Cloud Drives Network Services Investment

Although cloud-based services are now widely utilized by the vast majority of enterprises, a new study by Forrester Consulting has found that many organizations are not realizing the full potential value of these services because their networks are not prepared to support the increased bandwidth demands and complexity of multiple cloud-based services.

XO commissioned the September 2013, which found that enterprises are indeed moving to the cloud en masse; more than 75 percent of enterprises are using or plan to use some type of cloud-based service; more than 50 percent of IT decision makers said their organization will be using four or more cloud platforms.

Moreover, after testing the waters with simple tasks, IT and business organizations are now shifting advanced, business-critical applications and services from internal data centers to cloud platforms. For instance, 50 percent more respondents plan on moving revenue-generating B2B e-commerce sites to cloud environments this year compared to last year. Software, storage, and disaster-recovery-as-a service represent the top three cloud-based services.

While many enterprises are reporting cost savings by moving to cloud platforms, the reality is that very few enterprises have seen values outside of cost savings. A major finding of the study contradicts one of the largest expectations IT professionals have when adopting cloud services: that the cloud provides them with a fast, easy set of IT resources.

According to the study, only 20 percent of IT decision makers said they were very satisfied with this benefit.  This is because many aspects of the infrastructure and operations supporting these services are not found in the cloud but in the network, which many enterprises have not refreshed for the new world of cloud IT.

The findings in the study also reveal other interesting contradictions.  Although 88 percent of IT decision makers believe cloud-based services will have an impact on the network, less than half of them said their organization had upgraded their network in the last three years.

In fact, the study shows that most organizations have given a higher priority to implementing cloud-based services and other IT initiatives over refreshing or upgrading the network.  According to the study, IT decision makers have placed a higher priority on five other IT initiatives (server upgrades, pursuing cloud services, storage refresh, PC refresh, and upgrading security environments) over the upgrading their network.

In good news for network services specialists, in order to improve the value of their cloud services and accommodate the impact of cloud services on the network, the majority of IT organizations have had to upgrade their company’s networks.  Specifically, the study found that 78 percent of enterprises had to upgrade one or more aspects of the network; 47 percent of enterprises had to upgrade network bandwidth; and 46 percent had to invest in new security services.


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