FUTURE OF CLOUD COMPUTING SURVEY REVEALS NEW DRIVERS FOR CLOUD ADOPTION

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Our initial survey has revealed that although there is broad-based support and enthusiasm for cloud computing, we’re still in the very early stages of this significant industry movement,” said Michael Skok, partner with North Bridge Venture Partners.

Agility and Innovation in Delivering New Applications Emerging as Primary Motivators that Complement Cloud’s Scalability and Cost Benefits

Gigaom Structure Conference 2011, SAN FRANCISCO – June 22, 2011 North Bridge today announced the results of its inaugural Future of Cloud Computing Survey. Conducted in partnership with Gigaom and The 451 Group and supported by more than 30 industry collaborators, the 2011 survey captured current perceptions, sentiments and future expectations of cloud computing from industry experts, users and vendors of cloud software, support and services. A total of 413 respondents took part in the survey, including representatives from both the vendor and end user communities. Respondents were asked about a wide range of key issues impacting cloud computing, such as: drivers for cloud computing, inhibitors, sourcing, hiring, TCO, the cloud’s effect on business sectors and user interest for future cloud services.

The survey results were released today at the Gigaom Structure Conference during the Cloud Leadership Panel. The panel was led by Michael Skok, general partner, North Bridge Venture Partners. Michael was joined on the panel by industry leaders from key sectors of cloud computing, including: Dries Buytaert, CTO & founder, Acquia; John Dillon, CEO, Engine Yard; Marten Mickos, CEO, Eucalyptus; and Lew Moorman, president, Rackspace Cloud. Details of the survey results are included in GigaOM Pro’s new report, A Field Guide to Cloud Computing, which was also announced today. The survey will also be covered in an upcoming Spotlight Report from The 451 Group.

Key Findings from the Survey included:
• Cloud computing is clearly still in its infancy as 40 percent of respondents indicated that they are only now experimenting with a move to the cloud, while another 26 percent of respondents are awaiting market maturity before adopting a formal cloud strategy. On average, the respondents have been using cloud based solutions for 20 months.
• Today, scalability and cost are seen as the primary drivers for cloud usage, while agility and innovation are quickly emerging as a key factor for adoption, as IT organizations view cloud computing as an effective means to implementing new applications quickly to keep pace with application backlogs and business demands.
• Factors cited as longer term (up to five years) drivers for cloud adoption included maintaining competitive differentiation, mobility and ensuring application interoperability through the use of open cloud APIs.
• While security and compliance remain the top inhibitors, with 31 percent citing these as key obstacles to cloud adoption, interoperability and vendor lock-in remain real threats with 25 percent of respondents identifying these as roadblocks to cloud usage.
• The majority of respondents, 55 percent, believe that cloud computing has a lower total cost of ownership (TCO).
• Respondents were equally split on the impact of cloud computing on IT manageability, with an equal number, 39 percent, indicating that the cloud would make for less and more complex environments.
• 74 percent of respondents indicated that cloud computing would either lead to an increase in hiring or have no impact, while only 26 percent of respondents expected any decrease in hiring based on cloud adoption.

Supporting Quotes:
“Our initial survey has revealed that although there is broad-based support and enthusiasm for cloud computing, we’re still in the very early stages of this significant industry movement. While it wasn’t surprising to learn that scalability and cost are driving current cloud usage, it was extremely informative to learn that agility and innovation have become key motivators for organizations in accelerating their adoption of the cloud. The respondents’ interests in developing cloud-based solutions for new areas that will also support mobility and competitive advantage in the future are challenging organizations to think differently about their IT strategies, deployment of resources and how to invest smartly in the cloud. The Future of Cloud Computing Survey was created to benchmark the state of the cloud computing industry that we can measure against in future years. Thanks to the efforts of our partners, our 30 great collaborator companies and the survey participants, we have a great baseline from which to start.” -- Michael Skok, general partner, North Bridge Venture Partners

"Cloud computing is a multibillion-dollar industry today, but many companies are still unclear on which technologies they need, how they work together, who the main vendors are and how to implement cloud technologies effectively. The Future of Cloud Computing is the first broad-reaching survey to take the pulse of organizations' knowledge, concerns and questions about cloud computing, and the findings clearly show cloud-based technologies will play a crucial role in driving innovation in every industry in the next decade." -- Derrick Harris, senior analyst and curator, GigaOM Pro

“The Future of Cloud Computing Survey confirmed some things we've been seeing in the market: the early stage of cloud computing in enterprise IT; greater progress, production use and profit in public clouds; significant interest and potential in hybrid and private clouds; and an expectation of cost savings. Though the survey told us cloud computing, particularly private clouds and platform-as-a-service (PaaS), are still fairly nascent among most users, it also indicated a higher level of awareness and pragmatism in confronting challenges and drawbacks, such as security, complexity and compliance, perhaps because of the lessons learned already in deploying virtualization at all layers of the stack. That should help to accelerate cloud computing's uptake in the enterprise, despite this seemingly slow start.” – Jay Lyman, Senior Analyst, The 451 Group

About North Bridge Venture Partners
North Bridge Venture Partners is an active, bi-coastal, early-stage venture capital firm based in Boston, Massachusetts and San Mateo, California. Established in 1994, North Bridge provides seed-to-growth financing and company-building expertise. Together with North Bridge Growth Equity, our mid-market focused growth capital fund, North Bridge manages over $3 billion. For North Bridge Venture Partners, success is derived through a partnership with entrepreneurs that produce industry-leading companies in large emerging markets. Historically, the firm's partners have played a significant role in organizing, starting and building successful companies. Working in concert with entrepreneurs, North Bridge adds value by providing strategic guidance, sharing operating experience, industry specific knowledge, team-building skills and an in-depth understanding of both private and public financings. North Bridge's sector focus includes Software, Communications & Infrastructure, Healthcare Technology, Digital Media, and Materials. North Bridge investments in cloud computing solutions include: Acquia, Actifio, Active Endpoints, Akiban, Apperian, Couchbase, Demandware, Firm58, Nasuni, Newforma, Plexxi, rPath, Signiant, SoundBite Communications, SpringCM, Unidesk and Viridity. For more information about North Bridge go to www.northbridge.com.

2011 Future of Cloud Computing Survey Collaborators:
• Acquia
• Actifio
• Active Endpoints
• Akamai
• Akiban
• Apperian
• Apprenda
• Cloud Technology Partners
• Cloudswitch
• Demandware
• Desktone
• Embrane
• EngineYard
• Eucalyptus
• Exoprise
• GigaOM
• Microsoft
• Nasuni
• Newforma
• Plexxi
• Rackspace
• rPath
• Sand Hill
• Signiant
• Sonian
• SoundBite Communications
• SpringCM
• THINK Strategies
• The 451Grop
• Unidesk
• Xsigo
• Zendesk

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