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Cloud Decision-Making Moves Up the Corporate Ladder with CIOs, CEOs Weighing in: Microsoft

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Cloud is now a mainstream technology for most companies, with 70 percent of the cloud service market now beyond infrastructure hosting, according to a new report released Wednesday by Microsoft. The report, Beyond Infrastructure: Cloud 2.0 Signifies New Opportunities for Cloud Service Providers, shows that cloud technology has moved past the cloud discovery phase for 75 percent of customers, and the maturing market is driving cloud decision-making up the corporate ladder to C-level executives.

The study was compiled by 451 Research for Microsoft based on 1,700 survey responses from different sized enterprises in 10 countries, given in late 2014 and early 2015. This year’s study shows a continuation of trends from last year, when Microsoft identified a tipping point, with 45 percent of companies surveyed moving from cloud discovery to the cloud implementation phase of adoption.

Microsoft’s report shows not only a greater opportunity for cloud service providers beyond the basic elements of hosting but also shows those providers must win over not just an IT manager, as was common in the past, but also a CIO or CTO, who is the primary decision-maker in the majority of cases (52 percent), or even the CEO, who is the primary decision-maker for 44 percent of companies.

“Hybrid cloud infrastructures are becoming the norm for customers,” said Michelle Bailey, senior vice president, Digital Infrastructure and Data Strategy, 451 Research. “As new decision-makers emerge, so too does the criteria for selecting cloud service providers. Trust, uptime, security, performance and technical expertise are today’s differentiators for a business-ready cloud. It’s not just about having datacenters everywhere at the lowest price. Providers need to build a business that aligns to who they are as a company and who they are supporting. Cloud 2.0 is really about value, redefining cloud computing from a technical specification to a business-ready environment. Enterprises are looking for a trusted end-to-end solution, and ultimately this will involve multiple partners.”

The value-adding opportunity for service provides comes from application hosting, managed services, and security services, and the products and services available are the single largest decision-making factor for 23 percent. Other major factors include company qualities for 22 percent, customer service for 21 percent, and price for only 19 percent.

Microsoft expanded its cloud partnerships earlier this week by creating a product package for service providers with Cisco.

The study also notes a looming opportunity for service providers in Windows Server 2003 migration ahead of the end of support in July. This migration will result in an increase in cloud use, Microsoft says, echoing the findings of a Cloud Industry Forum report last summer. Shortly after that report was issued, HP launched a program to take advantage of the Windows Server 2003 migration opportunity.

The report is available for download from Microsoft’s website.

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