Enterprise apps will shift to cloud, says IHS Research Director

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Clifford Grossner from IHS talked about the future shift to off-premise enterprise apps at the NexGen Cloud conference in San Diego.

According to Grossner, solution providers will see more applications used by enterprise customers shift off-premise to the cloud, and they need to quickly move to capitalise on the new opportunities created by this shift.

He said: "If you ask why enterprise applications are moving off-premises, one – it's because they can, and two – because it makes sense."

At present, enterprise customers are focused on agile computing to get the necessary computing power and resources on demand. However, this focus could shift over the next four years to the 'meta cloud' or 'cloud of clouds', as termed by Grossner. Enterprises will deploy their own cloud of clouds based on their needs, for which solution providers have to integrate offerings from several other providers. Grossner noted that enterprises will always use more than one provider.

The shift in focus will result in a growth in demand for off-premise cloud services. Grossner said that revenue from these services is expected to grow 42% year-on-year in 2015 and 40% in 2016. He said: "This is a fast-growing, and a long-growing, market."

In order to make this shift, enterprises will tap cloud services providers to offer greater agility and performance from their cloud infrastructures, and will look to pass on the savings from increasing their scale of operations.

Moreover, several enterprises will expect cloud-based applications to perform better than on-premise applications without compromising on security. Grossner said: "If you think about it, that's a tall order. ... If you are a services provider providing applications, [service level agreements] are going to be important."

Grossner noted that IT budgets will keep shrinking over time while a greater portion of them goes towards off-premise cloud services. The primary criteria enterprises are looking at when choosing a cloud provider are pricing, financial stability, and the level of support and service.

Do you think off-premise enterprise apps will meet expectations? Let us know in the comments.


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