Study Predicts Big Shift To Cloud Compution By 2020

Information Management Online, June 10, 2010

Mel Duvall

In what is one of the bolder forecasts based on the cloud computing trend, a study predicts that the number of companies that outsource their IT infrastructure and take advantage of hosted solutions will balloon to 64% by 2020.

The study, which was conducted by research firm Vanson Bourne in April on behalf of cloud computing service provider Savvis, says increasingly companies believe managing IT in-house provides little competitive advantage.

“With the rise in acceptance of outsourcing within the IT industry, and the related economies of scale that accompany the managed services model, businesses are finding it difficult to justify owning their own IT infrastructures,” Savvis chief technology officer Bryan Doerr said in releasing the study.

Study looked at three primary markets, the U.S., Britain, and Singapore. The trend will be felt differently in the regions, but each is expected to experience a strong shift:

• In the United States, the study predicts companies primarily utilizing in-house IT infrastructure will drop from 82% today to 49% by 2020.
• In the United Kingdom in-house IT infrastructure will fall from 90% today to just 23% by 2020.
• In Singapore, IT infrastructure being controlled in-house is expected to drop from 62% today to 38% by 2020.

Organizations cited cost savings (58%) as the biggest driver in the switch. When asked what factors prevent their organizations from outsourcing all elements of their IT infrastructure, respondents cited company culture (43%) and sunk costs in IT assets already paid for and owned (37%).