Cloud computing - statistics on the use by enterprises

Cloud computing for business yet to go mainstream in the EU - this article presents recent statistics on enterprises' use of cloud computing services in the European Union (EU).
In principle, cloud computing involves two components, a cloud infrastructure and software applications. The first consists of the hardware resources required to support the cloud services being provided and typically includes server, storage and network components. The second component refers to software applications and computing power for running business applications, as provided via the internet by third parties.

Use of cloud computing: highlights

  • 19 % of EU enterprises used cloud computing in 2014, mostly for hosting their e-mail systems and storing files in electronic form.
  • 46 % of those firms used advanced cloud services relating to financial and accounting software applications, customer relationship management or to the use of computing power to run business applications.
  • In 2014, almost twice as many firms used public cloud servers (12 %) as private cloud servers (7 %), i.e. infrastructure for their exclusive use.
  • Four out of ten enterprises (39 %) using the cloud reported the risk of a security breach as the main limiting factor in the use of cloud computing services.
  • A similar proportion (42 %) of those not using the cloud reported insufficient knowledge of cloud computing as the main factor that prevented them from using it.

 

Enterprises - use of cloud computing services in 2014

Cloud computing services should be delivered from service providers’ servers and, for the purposes of the ICT usage and e-commerce in enterprises survey, have the following mandatory characteristics:

  • on-demand self-service: users may request computing resources without human interaction with the service provider;
  • elasticity of provision: capabilities may be easily scaled up or down, e.g. in response to changes in the number of users or required storage capacity, so that enterprises can meet demand peaks without having to invest in infrastructure that will otherwise remain idle or underutilised; and
  • payable services (pay-per-user, pay-per-use or pre-paid).

In principle, the service providers may deliver ICT-related services from shared servers (public cloud) or from a cloud infrastructure provided for the exclusive use of a particular enterprise (private cloud)

Of the enterprises that reported using cloud computing, some 66 % relied on a cloud solution for their e-mail. Instead of setting up a server infrastructure for their e-mail system, which would have involved inter alia capital expenditure and maintenance costs, these firms opted for a cloud solution based on per-user operating costs.

Cloud computing services may meet a wide range of other business ICT needs. Over half of all enterprises (53 %) used the cloud for storing files in electronic form. Some 39 % used it to host their database, while 34 % reported using it for office software (e.g. word processors, spreadsheets, etc.).

Most importantly, via the cloud, enterprises access relatively more advanced end customer software applications, e.g. for finances/accounting and managing information about their customers (customer relationship management – CRM) (31 % and 21 % respectively). In addition, 17 % reported using the (usually high-performance) cloud computing platforms for computing power in order to run their own business software applications.

Not surprisingly, the highest proportion of enterprises using cloud computing services (45 %) was in the information and communication sector, while in almost all other economic sectors the percentage ranged from 14 % to 20 %. ‘Professional, scientific and technical’ firms came in between, with 27 % reporting that they used the cloud.

Use of cloud computing services in 2014 (% of enterprises)

 

Types of cloud computing: public and private cloud

Service providers can deliver cloud computing services with all the above characteristics in two main ways: via public cloud servers (12 % of enterprises) or private cloud servers (7 % of enterprises). The latter, by definition, involve a single-tenant environment where the hardware, storage and network are set aside for a single enterprise. Consequently, the infrastructure guarantees high levels of security, as the service provider’s other clients cannot access the same resources. Some 7 % of SMEs and 17 % of large enterprises reported using private cloud.

In contrast, public cloud infrastructures are provided for shared use by multiple clients. Essentially, they tend to be highly standardised, with limited customisation options, e.g. an e-mail server can provide many firms with the necessary cloud infrastructure to manage their e-mail systems. Public cloud computing is reportedly used by 24 % of large enterprises and 12 % of SMEs in the EU.

Factors limiting enterprises’ use of cloud computing

Enterprises using cloud computing services reported several factors limiting their usage. The risk of a security breach scored highest both for large enterprises and SMEs, (57 % and 38 % respectively). Clearly, firms attach importance to the protection of their IT systems, but the issue can be seen in the wider context of resilience to possible security breaches when using the cloud. Service providers would be expected to take all possible steps to establish, and transparently apply, procedures relating to possible breaches of the security of systems and services intended for their clients. Therefore, from the firms’ point of view (regardless of size), the risk of a security breach may be a matter of service providers’ liability and accountability, as well as a merely technical issue.

Large enterprises and SMEs differed somewhat as regards other limiting factors. The use of cloud computing services may require specific ICT management skills, particularly to evaluate need and use management tools to gauge consumption of IT resources accurately. Therefore, insufficient knowledge or expertise may limit the take-up of cloud computing. One in three SMEs (32 %) using the cloud reported this as a limiting factor, as compared with less than one in five large enterprises (17 %). A similar proportion of SMEs (32 %) already on the cloud regarded the high cost of cloud computing services as a limiting factor.

Cloud services are often hosted in one country and consumed in others. Service providers may use data centres scattered around the globe hence enterprises using the cloud may feel uncertain of the location of their data. In addition, there may be issues of legal jurisdiction in the event of dispute and uncertainty about the applicable law. Both factors were reported as limiting the use of cloud computing, particularly for large enterprises already using the cloud (46 % for both).

 
Authors: Konstantinos GIANNAKOURIS, Maria SMIHILY
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