As CIOs Accelerate Cloud Investments, Solutions Providers Will Profit

With all the buzz around cloud computing, it’s easy sometimes to lose perspective on this whole phenomenon. The fact is the cloud has tremendous transformative power, and we are about to see an acceleration of the adoption of cloud services as CIOs take action on ways to get the most bang for their IT bucks.

Four years from now, the percentage of IT assets running in the cloud or SaaS technologies is expected to be 14 times greater than it is today, according to Gartner research conducted in late 2010. Currently only 3 percent of IT runs in the cloud or SaaS technology, but that number will skyrocket to 43 percent by 2015. That projection comes from a Gartner poll of 2,014 CIOs representing more than $160 billion in corporate and public sector IT spending in 50 countries and 38 industries. CIOs see the value of cloud computing and as a result, they are getting ready to invest in cloud-based resources.

Much of the value has to do with budget reallocation. While the average IT organization historically has allocated two thirds of its budget to day-to-day operations, cloud computing makes it possible to decrease that number to 50 percent or less – perhaps as low 35 percent. In other words, CIOs see an opportunity to get the same level of service, or better, at reduced costs.

Freedom to Innovate

With this IT budget reallocation, presumably CIOs will have more freedom to invest in new initiatives for which they simply have not had the budget. Based on the Gartner study’s results, it’s clear that CIOs are banking on cloud computing to support their efforts to increase enterprise growth, attract and retain customers, reduce enterprise costs, and improve business processes and technical infrastructures.

It’s no wonder, then, that cloud computing is their No. 1 IT priority, followed by virtualization, mobile technologies and IT management. Of course, these other priorities are linked to the cloud as well, so no matter how you slice it, cloud computing is at the center of IT planning.

Partner Opportunities

For IT service providers, this movement toward cloud computing in corporations and government agencies translates to tremendous new opportunities and offers further evidence the cloud is changing things. Gartner has projected that cloud spending will reach $149 billion worldwide in 2014, an increase of more than 150 percent from about $58 billion in 2009. Ignoring the cloud, therefore, is looking more and more like a bad idea that could mean giving up significant revenue potential.

In a study also conducted last fall, the Computing Technology Industry Association (CompTIA) found that almost two-thirds of end users planned to increase their cloud computing investments by more than 5 percent in the ensuing 12 months. More than half of those end users want IT channel companies to deliver the services.

So the time is now for solution providers and MSPs to jump on the cloud bandwagon if they haven’t already done so. Their role is to integrate public cloud services with on-premise private cloud based resources, thereby entrenching themselves in the customer’s business.

Zenith Infotech’s SmartStyle private cloud solution gives solution providers and MSPs a vehicle to transition their customers to the cloud in phases that can be based on replacement cycles or by getting in the door by providing business continuity services. SmartStyle cloud servers can mirror and replace aging physical servers and thin clients can be deployed when desktops near obsolescence. As CIOs look to increase their cloud investments, current and prospective Zenith partners have an opportunity to get in on the ground floor.

Maurice Saluan is senior VP of sales for Zenith Infotech as well as seasoned sales veteran in the managed service arena. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor’s 2011 Platinum sponsorship. Find all of Saluan’s blog entries here.