As enterprises migrate to the cloud, McKinsey and Company predicts businesses will move away from building IT to consuming it over the next three years.
The article, IT as a service: from build to consume declares, “The cloud debate is over, with businesses moving a material portion of IT workloads to cloud environments.”
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McKinsey conducted its IT-as-a-Service (ITaaS) Cloud and Enterprise Cloud Infrastructure surveys, with approximately 800 CIOs and IT executives worldwide across a variety of industries, providing a unique, global view of the transition to the cloud. The key takeaway: “Enterprises are planning to transition IT workloads at a significant rate and pace to a hybrid cloud infrastructure, with off-premise environments seeing the greatest growth in adoption.”
McKinsey’s global ITaaS Cloud and Enterprise Cloud Infrastructure surveys found that the shift to the cloud is accelerating, with large enterprises becoming a major driver of growth for cloud environments. A similar trend was observed in mid-sized enterprises.
The trend is concerning for on-premise IT vendors, given the value of revenue represented by large and midsize enterprises.
“We expect enterprise IT hardware and software vendors focused on on-premise environments will experience growing headwinds as on-premise enterprise spending slows. Vendors focused on selling to cloud-service providers, however, are likely to see meaningful growth,” the report says.
McKinsey’s research showed companies were most likely to choose “hyperscale” cloud-service providers, such as Amazon, Google, and Microsoft, which have the largest capacity.
“According to our ITaaS survey, nearly half (48 per cent) of large enterprises with off-premise workloads have handed off at least one workload to a hyperscale provider, and that number is expected to rise to roughly 80 per cent by 2018. Enterprises have a clear preference for hyperscale providers because of the capabilities they offer, balanced with concerns about vendor lock-in.”
Smaller vendors will also benefit. “Nearly half of survey participants also plan to use tier-two and tier-three IaaS providers, such as Rackspace, and traditional vendors for at least one off-premise workload. Additionally, the lack of cloud talent in-house and the need for hybrid cloud models may drive broader adoption of managed cloud offerings,” the report says.
IT services vendors, IT distributors and value-added resellers are likely to see a shift in their service mix change, the report said.