Hybrid Cloud Services for Industry-Specific Applications

More IT managers will turn to cloud services to accelerate their responsiveness to business needs. Quicker IT deployments, end-user self-service, and reduced start-up costs equate to faster time-to-market for many organizations. Others will want to take advantage of the ability to pivot more quickly and adapt to market changes.

Beyond the desire for better, faster and cheaper processes, cloud services will enable entirely new business models and associated revenue streams. Acceptance will advance as cloud architectures prove out the opportunities for real business innovation and new functionality.

There is no single journey to cloud adoption, but rather a wide variety of entrance ramps and paths. On the demand side, organizations have different starting points and different objectives. Fortunately, public cloud computing services can unleash an exciting mix of new technologies, architectures, and organizational approaches.

Let’s consider the needs of the evolving media sector. Innovation in business processes already struggle to keep pace with the rapid advancements in technology. While cloud computing promises to unlock new levels of automation, it could also create new opportunities for value-added systems integration and business process transformation.

Media Company Hybrid Cloud Use-Case Scenario
  • The media distribution landscape is rapidly changing from silos of video distribution (within pay-TV, broadcast, retail) to multi-channel or digital distribution.
  • Content creators perceive several dangers in digital media: piracy, loss of control or direct relationships, and disintermediation.
  • Content creators also see an opportunity in real-time media consumption data integrated across distribution channels and devices.

Role for Cloud Technologies
  • A cloud-based content registry that manages content access rights across users, content creators, distributors, and devices offers several benefits.
  • For end-consumers, the registry enables convenience, personalization, and community (with access to content on multiple devices, and new social experiences).
  • Content creators and other providers of the registry can take advantage of new business models based on real-time data, personalization, and user targeting.
  • The registry could drive incremental media purchases and greater consumption with protected content assets, enhanced discovery, and more powerful recommendation engines.

Application Considerations
  • A content registry requires significant coordination within the media industry (e.g., agreement on common methods for managing digital rights and common limits to each consumption model with rules for content use).
  • The rights of both the content creators and the end-consumers must be protected in terms of how their respective data is accessed, protected, and used.

For this scenario to succeed, a wide range of players must work in concert to deliver on the promise of hybrid cloud services. Substantial opportunities for innovation and value creation exist at all levels of the stack, from data center and virtualization design to foundational systems to end-user applications to business processes.

Home-Based Businesses to Adopt Cloud Services

Surviving the economic pressures of today has been difficult for most businesses, especially the smallest. But despite the economic downturn, Home-Based Business (HBB) appears to be a high growth sector for employment in the U.S. market. Moreover, American HBBs are showing strong signs of sustained growth plans into the foreseeable future.

According to the latest market study by AMI-Partners, there was an 11 percent increase in those who started their home-based business due to corporate downsizing last year.

When some employees are downsized from their employment at larger companies, they are motivated to create their own future employment path -- by starting their own company, based out of their home office.

"What's interesting is that 80 percent of those who became HBBs because of downsizing from a larger company do not plan to return to the corporate workforce," says Jessica Efta, manager of market development at AMI-Partners.

Committed to Ongoing Self-Employment 

Apparently, many survey respondents say they plan to stay HBBs for the long term. Utilizing today's numerous productivity-enhancing business technologies, a small business owner does not need a retail storefront or traditional office building to conduct a successful commercial operation.

Last year, sole proprietorship businesses were two thirds of the home-based business market -- this year it is only one third of the total market, indicating that some home-based businesses are growing and hiring new employees.

This trend will likely continue. Over the last year, there was a 10 percent jump in respondents who say they have plans to grow their business and hire more employees.

Business Technology and Cloud Services Adoption

According to the AMI assessment, reported revenues became positive for HBBs in 2010 and projections show positive growth expectations for 2011. As average employee size increased, so did the average PC use per company.

Cloud computing is another area of growing interest among HBBs. One quarter of U.S. home-based business owners are interested in procuring hosted applications -- nearly double the amount of their nearest peer group (small businesses operating out of a commercial setting, with fewer than 5 employees).

Considering the 16 million home-based businesses already in the U.S. market, this translates into a significant new market development opportunity for on-demand managed cloud service providers.

Public Cloud Computing and Managed Hosting Services

The promise of cloud computing and application hosting benefits are already delivering practical solutions to very real business problems, according to the latest market study by In-Stat. In fact, many small businesses are using managed cloud services as their primary method to solve a variety of IT requirements.

"Web hosting and data storage are the most obvious IT needs that can be addressed by public cloud services" says Greg Potter, Research Analyst at In-Stat.

"With the advent of Software as a Service (SaaS) offerings many businesses are realizing that much of their IT needs can be fulfilled without the need for expensive networking equipment and high-end computers."

Moreover, many small businesses are now re-visiting the use of thin clients for most of their employees, as the need for increased computer processing power is rendered moot by the cloud.

SMB IT Applications Transition to the Cloud

For the SOHO and small business market, there is considerable opportunity for a variety of cloud service providers. According to In-Stat’s latest market assessment, small business spending on public cloud services in 2010 was roughly $3 billion.

As a direct result of this growing demand, In-Stat forecast that public cloud computing revenues are set to increase well over 100 percent from 2010 to 2014.

This significant increase is changing the IT infrastructure paradigm in small office and home office (1-4 employees) and small business (5-99 employees) environments – it’s also transforming business technology application scenarios.

In-Stat’s research shows that SOHO and small businesses will comprise roughly 65 percent of the public cloud computing market in 2014.

Hybrid-Cloud Appeals to the Larger Employers

Mid-sized (100-999 employees) and enterprise (1000 and more employees) businesses have other issues to consider -- primarily security and the cost of transition, when evaluating their choices for cloud computing solutions.

For these companies the choice between public and private clouds will dominate their decision-making processes.

In-Stat believes that private clouds give businesses that are securing sensitive data an alternative to the public cloud, as they can realize cost advantages and improved utilization of IT equipment over a traditional physical infrastructure deployment.

A great number of enterprises are running virtualization software on their current infrastructure, and they’re already recognizing the cost savings yielded by utilizing cloud infrastructure.

For those companies not already utilizing a private cloud platform, In-Stat believes that the public cloud offers an appealing demand-based payment model and scalable infrastructure solution.

In the end, some large companies will very likely choose the hybrid cloud approach -- moving their mission-critical information and applications to a private cloud, and then partnering with a public cloud infrastructure service provider for their other remaining application needs.