Swiss online magazine Computerworld.ch recently sparked a furore with an article entitled: "The cloud: The lure of big rewards -- but not everyone’s a winner." The authors tried to find out what cloud customers want and what cloud providers need to do in response. After all, there’s no doubt that Swiss IT managers want the cloud; it’s just that the uncontrollable risks are giving them headaches. This is a feeling they share with their counterparts in the rest of Europe.
The Swiss market has already progressed beyond cloud basics like email, e-commerce, and shopping solutions. Companies are now starting ambitious transformation projects and relocating more business-critical applications such as customer relationship management (CRM), enterprise resource planning (ERP), and supply chain management (SCM) to the cloud. According to research by Computerworld, Hewlett-Packard is in the process of transferring its CRM worldwide from Oracle/Siebel to cloud pioneer Salesforce. IBM has trumpeted marketing service nViso and TV service provider OTRUM as two reference clients for its SmartCloud services.
Swiss enterprises are debating risks like vendor lock-in -- dependence on a single cloud provider -- and security issues much more vigorously than their counterparts in the United States or Asia, said Markus Zollinger, director Cloud Computing at IBM Switzerland. These concerns and the desire for individual, measurable service level agreements (SLAs) have resulted in many Swiss companies preferring private cloud solutions for business-critical applications and sensitive data.
So what do cloud customers want, exactly? Apparently, local storage and standards.
A recent survey by MSM Research of 108 Swiss companies asked whether local data storage (i.e., maintaining a datacenter in Switzerland) was a key success factor for cloud providers; 44.8 percent of the respondents agreed wholeheartedly that it was, while another 27.6 percent partly agreed. An even higher share called for cloud standards and cloud certificates to counteract dreaded vendor lock-in. The reason for this is that in a standardized cloud, customers can easily switch from their current cloud provider to a cheaper, more powerful competitor.
And what do cloud providers need to offer?
Leaving the concerns to one side for a moment, SaaS is very popular in Switzerland, too. Forrester forecast that in 2012, SaaS will have a global market volume of $33 billion. Last year, SaaS already accounted for easily the lion’s share of cloud turnover with revenue reaching $21 billion -- and its upward trend is expected to continue over the next few years. Market drivers are sales solutions, CRM, payroll accounting, and human resources. For example, Swiss food corporation Nestlé is now using cloud-based human capital management (HCM) developed by SAP/SuccessFactors.
What about other cloud solutions?
The pioneering market for business-process-as-a-service (BPaaS) cloud solutions, such as those provided by Software AG and Cordys Process Factory, is only just emerging.
By contrast, infrastructure-as-a-service (IaaS) -- cloud-based computing/servers and storage -- is expected to peak in 2014 before stagnating and subsequently shrinking significantly as of 2020. By comparison, Forrester predicts global SaaS revenue to reach $132 billion by 2020, while that same year the IaaS market is only expected to have a market volume of $4.78 billion.
SaaS is where the big bucks lie. Although IaaS boasts impressive advantages including scalability and significantly lower IT overheads thanks to pay-per-use models, it’s set to quickly become a commodity, whereupon prices will drop. Like their peers in other developed nations, Swiss enterprises will heavily invest in SaaS and cloud, while avoiding vendor lock-in and calling for standards and stringent security measures.
— Charlotte Erdmann comments on a wide range of technologies from her base in Berlin. In addition to blogging, she is a media and communication consultant, organizing and managing large customer magazines and marketing activities within the IT industry.