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April 23, 2014

As CIOs Embrace Big Data, Cloud Will Soar

George Leopold

The corporate embrace of cloud computing is one of the key drivers of big data analytics, boosting revenues over the last several years for leading cloud service providers.

While a recent survey pegged the cloud market at $15.1 billion at the end of 2013, there are also concerns about the complexity accompanying cloud systems that could serve to limit adoption among corporate CIOs.

While observers see few emerging technologies will have as broad an impact on corporations as big data and analytics, IDC analyst David McNally predicts that only 40 percent of chief information officers will be able to roll out big data technologies by 2017.

According to list of CIO predictions, cloud services are seen entering the corporate mainstream, that is, multiple departments or business units, in the next 12 to 24 months. Big data and analytics could take longer, IDC predicts, but would also have a broader “company-wide” impact on business operations.

Part of the reason for the lag is the current lack of analytic skills within corporations. IDC said businesses must start training internal IT staff. Hence, it predicts, there will be huge demand for training tools like dashboards used to visualize data.

If cloud services deliver on their promise of greater agility within enterprises in allocating resources and providing services, for example, then CIOs can overcome the inherent complexity of big data to develop strategies for rolling our data analytics and mobility.

That in turn would help companies to leverage the mountains of data most are sitting on, generating new products and revenue streams, proponents argue.

For example, companies like Salesforce.com and enterprise collaboration tool vendor Box.com are using big data analytics to track metrics like licensing seats deployed by customers, what data is being stored and the number of modules deployed. They are also tracking usage patterns such as frequency of use and platform sharing.

The analytical results are then used to boost average revenue per customer. That, in turn, helps drive the use of cloud services across enterprises.

If CIOs can overcome the challenges of deploying big data analytics, it would fuel broader corporate adoption of cloud services by enterprises as they shift more business applications to the cloud. If this scenario pans out, IDC estimates that the $47.4 billion global market for public IT cloud services could expand to an estimated $107 billion by 2017.

“Public IT cloud services will have a compound annual growth rate of 23.5 percent, five times that of the IT industry as a whole,” the market researcher forecast in September 2013.

Initially, cloud services will be rolled out to achieve greater efficiency. “The emergence of cloud as the core for new ‘business as a service’ offerings will accelerate cloud adoption and dramatically raise the cloud model’s strategic value beyond CIOs,” IDC forecast. That means a next wave of cloud adoption would likely be driven by a corporate embrace of big data analytics.

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