Which businesses are adopting cloud computing first?

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Note: Through the end of the year, we’ll be posting one blog per day from our top 10 “greatest hits” from Thoughts on Cloud since we launched in September. This post is #5 and was originally published on Nov. 1.

In its 2011 CIO study, IBM found that 60 percent of 3,000 CIOs interviewed from around the world plan to use cloud computing over the next 3 to 5 years. Meanwhile, in IBM’s 2009 CIO study, only 33 percent of global CIOs considered the use of cloud computing in their visionary plans.

Based on this data, it can be argued that companies will progressively adopt cloud computing in the future. However many companies are already realizing the benefits of cloud computing as a new way to deliver and consume IT services.

Among the first companies to adopt cloud computing are small and medium businesses. Cloud computing allows these companies to use world-class infrastructure without the need of purchasing hardware and maintaining large support teams. Pay-per-use also gives them the agility and flexibility to grow quickly when demand increases. Conversely, in case of decreasing demand, cloud computing provides a convenient way to reduce capacity and avoid sunk costs. This model is especially interesting for start-up companies, because these usually don’t want to make big upfront investments, have no interest in building large operational teams, and need scalability to adapt quickly to changes in demand.

Governments are also adopting cloud computing for various reasons. In today’s economic environment, many public institutions have seen their budget reduced significantly and seek ways to reduce costs. Cloud computing can provide significant savings for certain workloads, especially when governments build shared cloud environments, which can be used by many public institutions. Another interesting use of cloud computing by governments is the creation of cloud environments to stimulate economic activity in a certain region. For example, IBM implemented a government-funded cloud computing center in Wuxi (China) to foster local software innovation and promote economic growth.

Companies in the financial sector are also adopting cloud computing for specific workloads. In particular these companies tend to have large teams of developers, and thus benefit from moving traditional development and test environments, which are usually underutilized, to cloud-based models, which improve agility and efficiency. Large financial institutions are mostly building their own private development and test clouds, although some are also exploring the benefits of using public clouds for such purpose.

Telecommunications companies are adopting cloud computing in different ways. While they recognize the value of building private clouds to increase the flexibility of their own IT environments, many companies in the telecommunications sector want to become cloud providers and provide cloud computing services to their residential and, especially, enterprise customers. In this area, IBM has developed the Cloud Service Provider Platform (CSP2), a package of hardware, software and services required to deliver a wide range of cloud offerings to telecommunications customers.

Finally, companies in the education sector (schools, universities, and others) are also using cloud computing to solve some of the challenges faced by these organizations. One of these challenges is personal computers (PCs). Students, especially those in primary schools, do not treat PCs carefully and, in consequence, organizations spend a lot of money in hardware and software fixes. By using a desktop cloud environment, each student can have a fully managed virtual PC and access it through a thin client, which is less prone to hardware failures than a standard computer. Another challenge is the creation and maintenance of class labs. The use of cloud computing allows dynamically provisioning the required server images to run a class lab and, after the class lab finishes, de-provisioning those resources and provisioning new ones to run a different class lab. Finally, cloud computing can also be used by researchers in academic institutions, because it is a cost-effective way to share a vast amount of computing resources among a large number of users.

In summary, while today most companies are thinking of adopting cloud computing in the near future, many companies are already using cloud computing for certain workloads and realizing the benefits of an early adoption.

Can you think of other companies or sectors that are among the first in adopting cloud computing? Please share your thoughts by posting a comment below.

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