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Service Management in the Cloud – The $120bn Question

The Cloud. Can you really avoid it? The cloud market is expected to grow to $121 billion dollars in 2015, a 26% compound annual growth rate from 2010’s $37 billion[1].

Such growth is set to continue, with research showing that 81% of organisations forecast a move to the cloud for 50% of their future transactions.

Indeed field service news research at the beginning of this year identified that whilst the shift to cloud based computing for service management software solutions hasn’t been as prevalent as say CRM systems there is a growing ground swell as companies establish an appetite for the cloud when it comes to the next generation of their service management software.

So what are the drivers for the growth in the cloud market?

With 60% of CIOs stating that their number one priority is cloud computing[2], a major driver has been the adoption of Software as a Service (SaaS) technology.

By 2017, SaaS is set to generate almost 60% of cloud revenues[3]. The move to SaaS is primarily driven by its ability to offer greater scalability, higher efficiencies with no loss of functionality, and reduced application costs, with a move to the cloud offering annual savings of over 20%.

However, there are of course additional benefits to the cloud as well as the SaaS model which whilst in the short term can make software more affordable in the long term can sometimes become the more costly option across a period of 3 years or more.

One significant benefit that the Cloud brings is that by it’s very nature it comes with disaster recovery essentially built in. Unlike an on premise system, should any significant problems hit your office such as fire, flooding or theft, if your core operating systems are Cloud based there will be no direct impact on your ability to continue work the next day.

Also we are now finally seeing fears around Cloud security being put to bed. Whilst amongst the general populace and in consumer computing the risk remains somewhat and the perception of this risk is amplified by security breaches of high profile consumer systems such as Apple’s iCloud, in the world of enterprise Cloud security is far more protected.

It is no coincidence that companies such as Axeda and Amazon Web Services have become dominant within the enterprise cloud sector and that both have an excellent reputation for understanding and delivering complex security solutions that meet the demands of their marketplace.

How are these trends reflected in the Service Management market?

IDC Research sponsored by Axios highlighted that every second company that now uses on-premise IT Service Management software plans to launch a cloud-based version within the next two years[4]. For many organizations, cloud has already become mainstream and their ITSM solution may be the 3rd or 4th major application that they have moved to the cloud.

The uptake of Microsoft’s Exchange365 in particular has increased businesses faith in cloud provision and allowed them to concentrate on their core business while cloud providers look after the infrastructure. Similarly, whilst some 15 years ago the likes of SAP and IBM were openly questioning and even mocking the likes of Salesforce.com and their cloud based infrastructure now there is something of a race amongst the slumbering IT giants to try and catch the tail of the wave and make out they were their all along.

Commenting on the research Scott Leckie, CTO at Axios Systems, said

“We’re seeing a shift in the market, with SaaS gaining substantial traction over the past year. Why is Service Management so suitable for cloud? For us, the move has been driven by a significant increase in user mobility and range of devices from which users require access to technology, anywhere and at any time. SaaS technologies fully support this, and provide compliance without sacrificing on functionality or standards for data security or speed.”

Tasos Symeonides, CEO at Axios Systems, went further adding

“Here at Axios, we’re seeing a 25% compound annual growth rate in the uptake of SaaS, which reflects the current trends in the cloud industry as a whole. IT leaders are seeing the benefits of moving to the cloud, allowing them to be more agile and responsive to business needs. Ultimately this drives greater efficiencies.

Our IT Service Management solution, assyst, provides the technology you need over the web, without any of the application management overheads. All you require is a browser-enabled desktop, laptop, tablet or smartphone. That means no new infrastructure, no server application, no desktop installs, no upgrade projects. No hassle.”

[1] Cloud Computing Market: Global Forecast (2010 – 2015), October 2010: http://www.marketsandmarkets.com/Market-Reports/cloud-computing-234.html
[2] CloudTweaks ‘Demystifying the Cloud’ Infographic, January 2014: http://cloudtweaks.com/wp-content/uploads/2014/01/demystifying-the-cloud.jpg
[3] Worldwide and Regional Public IT Cloud Services 2013–2017 Forecast, August 2013: http://www.idc.com/getdoc.jsp?containerId=242464  
[4] IT Service Management in Deutschland 2014, ITSM im Spannungsfeld von Cloud Computing und Enterprise Mobility, Mark Alexander Schulte for IDC, February 2014:: http://idc.de/de/research/multi-client-projekte/it-service-management-in-deutschland-2014

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