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Cloud adoption rates down? Yes, but not really

A recent industry report had a finding anyone in IT right now would find arresting: Cloud adoption rates have dipped.

Me: Come again?

Report: Usage of cloud applications is down from 2014. For example, 35% of surveyed organizations are using cloud analytics software. Two years ago, 53% did. Cloud email, collaboration, customer relationship management and financial apps all saw usages drops.

CompTIA’s latest “Trends in Cloud Computing” delivered the dramatic news.

It was the second cloud double take I had done this fall. Last week I wrote on Boston footwear manufacturer New Balance’s underwhelmed regard for cloud computing — at least, as the sole processing power behind an expansion that includes opening stores on several continents and developing its custom footwear services. This, from a company that, according to Ravi Shankavaram, its vice president of IT, has adopted a “cloud-first” strategy. Was an anti-cloud front moving in?

Hardly. Gartner predicts the public cloud market to grow 16.5% in 2016, to $204 billion. IDC forecasts spending on cloud infrastructure this year to increase 16.2%, to $37.4 billion. And Morgan Stanley found earlier this year that cloud is one of CIOs’ top spending projects in 2016 and predicted that 30% of application workloads will move to the public cloud by the end of next year.

Deciphering dipping digits

CompTIA knew that reported decreases in cloud adoption rates would cause some surprise, so it painted the context.

“In the early days of cloud, employees likely assumed that any off-premise application was cloud-based,” the report explained. “With a greater appreciation for cloud-specific characteristics, employees are honing their assessment.”

In other words, people know more about cloud now, so they’re more careful about IT services they’re taking on as cloud — and they can more accurately distinguish between cloud and non-cloud applications.

Vendors are partly responsible for the confusion; many label computing services that aren’t cloud cloud in hopes of drawing buyers. It’s a phenomenon known as cloud washing. For example, managed hosting — leased servers dedicated for a specific client — doesn’t always offer the same scalability and other benefits as true cloud options do.

Lauren Nelson, an analyst at Forrester Research, said she’s skeptical about numbers that say spending on cloud services are going down. Another explanation, she said, is users overstated their original adoption levels, or it could be other factors.

“Is it a developer answering that question? Is it an end user? What were the different data sources? Were there inconsistencies in that data set? I’d question a lot of that.”

The gathering cloud

Nelson said she hasn’t seen apps moving away from the public cloud; in fact, they’re expanding in it.

“This past year we saw the first interest and increase in cloud migration efforts versus building net new apps in the cloud, which is what the story has been over the last however many years,” she said.

CompTIA agrees, saying that the declines in cloud adoption rates — or “rebalancing” of how organizations do cloud assessments — do not signal that the market is in decline.

“Cloud, then, will be a major part of the enterprise technology landscape,” CompTIA said in the report. “A greater part of the total IT spend will shift to cloud technology, and cloud offerings will also expand budgets as they expand the limits of what a business is able to accomplish.”

So read the numbers, and rebalance yourself.

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