Predicting Cloud Computing Adoption Rates

From conservative, single digit adoption rates to hockey-stick projections of exceptional growth, analyst firms, venture capitalists and government ministries are weighing in on how they see cloud adoption progressing.

While each of the adoption rate predictions vary significantly in terms of their methodologies and results, all rely on the assumption that SaaS applications including CRM will continue to gain momentum.  The user adoption rates vary on how fast the momentum is, yet all share this assumption.  Speed, increased user adoption rates, and the ability to more closely align software to business goals are cited most often as the biggest benefits.

Where the projections vary most is whether enterprises will eventually migrate the majority of their applications to the cloud or not.  Forrester, Gartner and others see a hybrid cloud architecture emerging in the enterprise and forcing the issue of legacy systems migration by 2015.  As would be expected, vendor-driven research sees an “all or nothing” world in the near future.

Sanity Check

Wanting to see how reliable the figures were showing rapid cloud adoption in the enterprise, I did a quick sanity check.  Taking the  distribution of sales by segment for Salesforce.com and their annual revenue growth rate, then normalizing it across all segments, enterprise emerges as their strongest segment by a wide margin in 2015.  It had a 15%+ compound annual growth rate (CAGR) from 2011 – 2015 just taking their current sales by segment distribution of sales and extrapolating forward.  Data points like this and the market factors behind them is why SaaS is often used in these studies as a leading indicator of broader cloud adoption.

Adoption Rate Round-Up

• CDW recently published their Cloud Computing Tracking Poll Report reporting 37% adoption in enterprises followed by higher education (34%), healthcare (30%), federal government (29%),  state & local government (23%) and SMBs (21%).Source and opt-in for research results: http://www.cdw.com/shop/tools/surveys/survey.asp?SurveyKey=D808B2971F634B5A96E452FE7E6FA165

• Japan’s Internal Affairs and Communications Ministry 2010, the cloud computing market in Japan is expected to grow to U.S.$29.2 billion in 2015. Gartner has projected cloud adoption in Japan will represent 12 percent of the global cloud services revenue. Source: http://www.biztechreport.com/story/1202-cloud-services-asia-pacific-region

• Forrester found that SaaS will outgrow all other cloud services, achieving 37% adoption in 2011 growing to 50% by 2012. In previous studies Forrester has shown that SaaS is a major growth catalyst of ongoing investment in IaaS and PaaS in enterprises. Source: Source:  Forrsights: The Software Market In Transformation, 2011 And Beyond Shifting Buying Preferences Lead To New Software Priorities by Holger Kisker, Ph.D. with Pascal Matzke, Stefan Ried, Ph.D., Miroslaw Lisserman  Link: http://bit.ly/ijJy70  The following table is from the report:

• Microsoft Global SMB Cloud Adoption Study released in March, 2011 is one of the most comprehensive done this year on this topic. Of the many findings, the study predicts  39 % of SMBs expect to be paying for one or more cloud services within three years).  One of the best studies on cloud adoptions done this year Source: Study Results Document (PDF (22 pages): http://bit.ly/gN8yTx

• North Bridge Venture Partners, GigaOM PRO and over a dozen research partners completed the study The Future of Cloud Computing 2011. The study found 13% expressed high level of confidence in cloud computing for enterprise applications, with 40% experimenting and 10% saying they will never use cloud-based platforms as they are too risky. A presentation of the results can be found here:

The Future of Cloud Computing 2011

View more presentations from Martin Walsh

Source: http://futureofcloudcomputing.drupalgardens.com/2011-future-cloud-computing-survey-results

Ovum predicts that multinational corporations (MNCs) will see cloud computing grow to 61% by the calendar end of 2011. Source:http://www.datacenterdynamics.com/focus/archive/2011/06/are-big-companies-actually-adopting-cloud-computing

• Springboard Research (Forrester) completed a study of cloud computing adoption in Asia finding 31% of companies with 50 or fewer PCs will adopt cloud-based applications in 18 months, 56% with up to 500 PCs.  The key findings are available for download from the source URL below the infographic.

                                     Microsoft Asia is making this available for download here: http://bit.ly/jWjOj1

• TechTarget published their analysis of virtualization and cloud computing adoption in the study, State of virtualization and cloud computing: 2011. Of the many findings, a few of the most significant is how pervasive VMware ESXi 4 and later (vSphere) is throughout enterprises today.  The study also shows that 7% of those interviewed had implemented cloud computing in 2010, growing to 9% in 2011 – quite conservative compared to many of the other adoption rate analyses completed.  You can find the results here:http://searchdatacenter.techtarget.com/feature/State-of-virtualization-and-cloud-computing-2011

• VMware and The Cloud Industry Forum (CIF) project UK cloud adoption being around 48% in 2011/12, growing significantly in the next three years due to anticipated SaaS adoption by SMBs.  Source: http://www.cloudindustryforum.org/uk-sme-cloud-adoption-set-to-increase-in-line-with-european-businesses opt in for the research:http://www.cloudindustryforum.org/register-your-details-to-download-our-white-papers

• Yankee Group has found that in 2011, 41 percent of very large enterprises (more than 10,000 employees) have already deployed or are considering deployment of platform as a service (PaaS) within the next 12 months, compared to just 32 percent in 2010. They have also found that mobility is most significant factor driving cloud adoption in the enterprise. Source:http://professional.wsj.com/article/TPCHWKNW0020110722e77q0004d.html\

Courtesy – Louis Columbus

Hottest CEO tool: Blogging

Brands such as O2 and Topshop have been quick to jump on the social networking bandwagon by using sites such as Facebook to target consumers, but a more recent trend and one that carries some risk has been the use of personal blogs as a communications tool.

Last month Waitrose managing director Mark Price, nicknamed the ‘chubby grocer’, launched a blog on the retailer’s website in which he shares his experiences on a healthier eating regime and tracks his efforts to lose weight, as well as arguing for the introduction of tea trolleys to airport immigration halls.

Price’s actions are relatively unusual, as corporate blogging is still in its infancy in the UK. However, it is thought likely that it will become as popular as it is in the US, where practitioners include General Motors vice-chairman Bob Lutz.

Several other brands, including Dell and Benetton, also operate blogs where employees and consumers can interact.
The appeal is obvious. Blogs are a way of achieving vast reach at a minimal cost. Microsoft chairman Bill Gates spoke about the benefits of communicating with customers via blogs at Microsoft’s CEO Summit in 2004.

It had advantages over more traditional communication methods such as emails, he argued, which could be too imposing or exclude potential audiences.

Microsoft encourages its staff to talk to consumers through blogging; it claims that more than 2000 employees use blogs to keep people up to date with their projects.

“It is a great way to communicate with a wider audience,” says Dave Gartenberg, HR director at Microsoft UK. “We are lucky that some of the most prominent bloggers in the world are based at Microsoft.”

Ian Pearman, managing director at Abbott Mead Vickers BBDO, which handles Sainsbury’s advertising, believes many consumers will react well to chief executives taking full responsibility through blogging. “It implies the kind of care and provenance that might be expected of a smaller business rather than a big corporation,” he says.

However, this comes with substantial caveats. Unlike traditional advertising campaigns,blogging demands long-term investment by a company or individual.

“Chief executives can’t start a conversation and then stop it on their own terms,” stresses Pearman. “Once the floodgate is open, the responses will keep pouring in and every one will expect a response [from the blogger].”

This was demonstrated in 2006 when Charles Dunstone, co-founder and chief executive of Carphone Warehouse, started his corporate blog at the same time as the company launched its ‘free’ TalkTalk broadband offer.

Dunstone stated that he would “update his blog regularly to keep [customers] up to date with what’s happening” , but as the firm struggled to cope with the demand for its latest offering , leaving thousands of customers angry and frustrated, Dunstone stopped blogging.

Depending on the content, blogs can also invite ridicule, some consumers, for example,might not take kindly to reading how a chief executive spends his big salary on exotic holidays or hear about his daughter’s Pony Club exploits.

Jane McNeil, managing director of digital agency Agency Republic, warns of the risks of using a fictional identity, known online as ‘sock-puppeting’. “The views of the blogger will be seen as the views of the company,” she says.

McNeil cites the example of John Mackey, chief executive of US grocer Whole Foods Market, who was exposed for posting negative comments about rival firm Wild Oats Markets on Yahoo! chat rooms for eight years, under the pseudonym ‘rahodeb’, an anagram of his wife’s name Deborah.

One post stated that Wild Oats management ‘[doesn’t] know what it’s doing’ and he also complimented himself as ‘cute’.

Whole Foods confirmed that Mackey had written the posts between 1999 and 2006, while Mackey himself claimed he had “posted on Yahoo! under a pseudonym because [he] had fun doing it”, adding that “many people post on bulletin boards using pseudonyms”.

Similarly, Asda, owner Wal-Mart incurred the wrath of web users in 2006 when it was revealed that a blog called ‘Wal-Marting across America’, charting the journey of ‘average American couple’ Jim and Laura across the US in a mobile home, spending each night in a Wal-Mart parking lot, had been engineered and funded by the retailer’s PR company, Edelman.

Jim and Laura were, it transpired, a Washington Post photographer and freelance writer respectively.

“Authenticity of voice is imperative,” says Rory Sutherland, executive planning director at Ogilvy and an avid blogger. “It’s not a good idea to have a PR blog on behalf of the chief executive as, ultimately, they’ll be found out, which could be disastrous for the brand.”

If done effectively, Sutherland sees a bright future for blogging as a form of business communication, alongside web-casts and social media, that encourages ‘openness’, and he urges marketers to judge audience size in PR terms rather than advertising terms.

“A blog may only attract 30,000 readers, but those readers are self-selective and often the most influential consumers,” he points out.

©Bennett, Coleman and Co, Source - Times Of India

Why CEO's Change Jobs

Super perks are one of the major reasons for many CEOs to rethink about their job. Today if you think companies are cutting the expenditure on the over paid CEOs then I afraid that you might be wrong. More firms are now willing to stake their company for the outrageous perks of their CEOs. Perks attract CEOs to shift to a new job. A handsome salary is always the deciding factor for keeping a CEO happy but it's also the supplementary things that attract the inner pleasure of a person and after all a CEO is one of them. A famous cliché says interest is more pleasurable than the principle amount, same is the case with salary and perks. Perks are the interests which the CEO gets from his job. We might say that perks are not the only deciding factor for a CEO but nevertheless they should not be neglected. Companies keep on showering execs with juicy perks and severance packages to the CEOs which becomes a major reason for CEOs to switch jobs. Undoubtedly, perks are like the most alluring factors for the CEO which surely can change the mind of the executive.

Showering perks have no limitation. It certainly depends on the company and its reputation which decides the perks of a CEO. From lavish farmhouses to even highly paid gym membership, the list is endless for the CEOs. Along with the salvaging salary the perks are like the extra cheese on their cheese pizza. Perks could include anything for the CEOs. Now days there aren't any limitation in deciding the perks and it all depends on the wants of the CEO whatever it may be. Recently a study showed that perks of a CEO also includes luxuries for his/her children or family members. So now perks are not necessarily given direct to the CEOs. Here is the list of major perks that companies have showered in excess some of the most sought after CEO. For some CEOs sky is certainly not the limit when getting perks.

• Nike has paid $579,649 for home remodeling to an outgoing chief executive at Nike.
• The new finance chief at eBay will be getting  up to $700,000 if he can't get the price he wants for the Texas house he gave up to take his job with eBay in California.
• A new president at Starwood Hotels & Resorts Worldwide might get $1.5 million for airfare during his first year on the job. This money is just to help him to commute from New York to California so that he would be there till his son finishes his school.

Challenging role

None of the freshers are appointed as a CEO so it is evident that to reach a position like a CEO of company involves experience and challenge. Once the CEO earns more than a decade of experience then the role becomes quite more challenging and this is where most of the CEOs prefer to choose their company. Once an executive has reached the position of a CEO then he will always switch jobs as per the name of the firm because then remuneration becomes a default attachment with the salary.

In a recent survey it has been quoted that many CEOs shifted their jobs to companies bigger than their existing companies. This gives the answer to the question that how challenge influences the job shift of a CEO. Bigger companies have greater challenges and to maintain that a CEO has to be more agile and make extra efforts. When you are a CEO of a company then your perks become secondary, but it's what you have contributed to the firm and the growth chart, is what becomes more important. The latest trend shows that more CEOs are now opting for the better brand name than the better package. Shifting from a domestic company to an international firm always has an increase in standard of pay, as well as perk, so CEOs prefer to take more challenging work. But if the case is deciding among two companies of same reputation then nothing but the remuneration is what matters.

Boredom or inability

Whether you are a CEO or just an executive, job shifting decision depends on the person and the nature of the human being. Though it's quite rare to see CEOs quit jobs for boredom or inability to function, but there are CEOs who have done it before. Work satisfaction is the only thing that can give you a professional growth and when a person has reached to a position like CEO then he must have a growth rate which includes work satisfaction too. Now days it has become a notion that CEOs don't work rather they are just paid for their previous works and experience. Well, for some extent it's true also but the intact statement couldn't be entirely factual. If the CEO is not satisfied with his/her work then it will affect his/her performance and the company growth as well.

Despite of excessive remuneration, if work satisfaction is not what the CEOs receive then it might become difficult for them to utilize their acumen to the highest degree.

Family Factor

Now as far as the family factor is concerned let me be little biased to the gender. If you are a male then it might happen that you will change your job to any country if you are being showered with lavish salary and outrageous package. But if it's a female then there are family factors which come to play which might be a hurdle for her to choose a job shift. Children also play a vital role in deciding the job change by the CEO. A recent survey shows that the new president at Starwood Hotels & Resorts Worldwide will get $1.5 million for airfare during his first year on the job. This money is offered to him because it was difficult for him to shift to New York from his home in California for the job as his son is yet to complete his high school in California. This is one of the examples of how children influence the decision. Because of his son the new president would be getting more perks.

This compels me to reframe the statement that family like spouse and children play a pivotal role in asking for more perks for the CEOs. Hence the decision turning factor still remains the perk but connected with various other catalysts too.

Netting CEO's

Price is the most important factor playing a pivotal role in netting a CEO. According to various company board members talent is worth of the price but when tings come to bidding then this is exactly what we mean netting. Remuneration in all aspects plays the most important role and what succeeds is the reputation of the company. It's always a big leap in shifting from one small company to a bigger organization. Some of the other major factors could be the passionate pursuit of the work. If you are getting the job which has always been your passion then nothing could match that.

Work satisfaction is what most of the CEOs are now opting for. Working round the clock will only be possible when the CEO will enjoy the work. A chauffer and a butler are good to look at when you are at home but if its office then it has to be the work which should give more pleasure to the executive.  Another is the control of the job, if the position will only for name sake without any control then it might not attract the “entrepreneurial” CEO. Along with the perks the company should also offer control then this might give you some guarantee in getting that CEO.

Best Bite for CEO's

More than the joining amount many CEOs are now poured with perks for quitting their previous job. This year has seen some of the most outstandingly high perks for some CEOs who have joined new firms for the package.

One of the most interesting of them happened when Former Nike Chief Executive William Perez resigned last January after serving a mere one year on the job. This entitled him to receive some of the most outrageous packages a CEO had ever received. Perez got a severance package worth $5.5 million which included $2.8 million that translated into two years' base salary, and if you think this is huge then think about gigantic as he also received a $1.75 million bonus for 2006 despite of not serving the whole year, and this all made $11 million for Perez to take home.

Besides this the very generous Nike also purchased his Portland home for the price $3.18 million. And now look for the major kick the company gave $579,649 worth of renovations along with $456,500 for his bill in the prepaid athletic club fee if he quits the gym.