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Companies ditching premise-based solutions for cloud apps

As cloud computing evolves, the technology is quickly becoming a crucial component in today's fast-paced and highly competitive business world. Confidence in hosted deployment is flourishing, largely because IT executives are learning more about the cloud and are driven by demand to adopt the solutions or risk falling behind.

Yet there are many different reasons decision-makers are using cloud applications. This was highlighted in a recent study of more than 300 CIOs and business executives by Dimensional Research, which revealed that organizations are now recognizing the myriad benefits cloud solutions provide over traditional, premise-based tools.

Since the cloud is constantly kept current and up to date, 58 percent of CIOs said using the cloud to meet compliance requirements is much easier than leveraging legacy solutions. Another 51 percent of respondents said cloud applications gave their firm a competitive advantage, which is extremely important today.

"Our survey findings show business value is an overwhelming driver for cloud adoption among business executives, while CIOs cite a range of reasons for moving to the cloud," said Diane Hagglund, senior research analyst for Dimensional Research. "Better compliance and increased competitive advantage were also identified as key drivers."

The benefits of cloud applications
Dimensional Research reported that approximately 95 percent of CIOs said using cloud applications gives employees the ability to learn more about the hosted services, which will help the organization in the future. Approximately 79 percent of IT decision-makers said this expertise is extremely important, while another 83 percent said using the cloud means it is often less challenging to find help when it is needed.

Decision-makers are also using the cloud for it's unique solutions. Application release automation software, for example, allows IT executives to monitor and deploy advanced tools across multiple environments, which is especially important when companies use hybrid strategies and have adopted multiple clouds.

"Businesses are embracing the cloud and realizing it offers tremendous value and advantages over on-premise applications," said Keri Brooke, vice president of marketing at Host Analytics. "This new research reinforces the industry's shift to a more modern, effective and safe way of doing business."

While the inherent benefits of the cloud are enticing, other CIOs are migrating to the hosted environment simply to eliminate the use of premise-based applications. This is largely because decision-makers have lost control of legacy tools. Sixty-one percent of respondents said mission-critical solutions have not been updated recently, while another 14 percent said crucial software has not been brought up to date in more than four years, Dimensional Research reported. As a result, more than a quarter of companies are unsure if applications meet their respective industries' tightened compliance requirements.

By migrating to the cloud, organizations can eliminate a number of these concerns, as automated technologies regularly update hosted solutions to keep businesses competitive and compliant.

A separate report by IDC noted that global spending on public cloud services will exceed $40 billion in 2012 and increase at a compound annual growth rate of more than 26 percent through 2016, eventually approaching $100 billion.

"The IT industry is in the midst of an important transformative period as companies invest in the technologies that will drive growth and innovation over the next two to three decades," said Frank Gens, senior vice president and chief analyst at IDC. "By the end of the decade, IDC expects at least 80 percent of the industry's growth, and enterprises' highest-value leverage of IT, will be driven by cloud services and the other third platform technologies."

As the cloud matures in the coming years, decision-makers need to get on the bandwagon or risk falling behind.