Minding the Midmarket Cloud Computing Gap

Slide Show

Midmarket Executives Find Cloud Computing Hazy at Best

Survey finds little appreciation or understanding of cloud computing.

Although it may seem like cloud computing is all the rage these days, many customers-especially in the midmarket space defined as being companies with 100 to 1,000 employees-are anything but sold on the idea of cloud computing.

That doesn't mean they won't eventually embrace cloud computing. But it does mean that the IT industry has a long way to go before mainstream customers feel comfortable enough to embrace the concept.

A new survey of 210 midmarket executives conducted by Virtacore Systems, a provider of cloud computing services for the midmarket, finds that the majority are unsure of exactly what cloud computing is and whether it will bring any value to their organization.

Kevin Burke, vice president of sales and marketing for Virtacore, says the survey highlights how much missionary work remains to be done concerning cloud computing. In particular, the survey finds that security concerns, lack of implementation knowledge and budget limitations are top-of-mind issues when it comes to cloud computing.

In terms of security, the survey shows that midmarket companies have security and compliance concerns that are roughly equivalent to larger organizations, which means that providers of cloud computing services are going to have to give customers visibility into their operations in order to make midmarket customers comfortable using their services.

Implementation issues, says Burke, run the gamut from provisioning systems to managing data. What that ultimately means, says Burke, is that midmarket customers are looking for cloud computing providers that can seamlessly slip into their operations, versus requiring them to master new application programming interfaces (APIs) in order to use their service.

The budget issue, however, may have to wait for a general economic recovery. While cloud computing can be viewed as an operating expense, many midmarket companies are focused on extending the life of their existing IT capital expenses. As profit margins are razor thin, the inclination to add to operating expenses is limited. In fact, most companies prefer to treat IT as a capital expense. But at the moment, credit is tight so if the choice is between buying new IT equipment or, for example, a new delivery truck, the tendency is going to be towards things the business absolutely can't do without.


Finally, Burke says midmarket IT customers are also concerned about vendor lock-in. To address this issue, Burke says the IT industry as a whole needs to do a better job of emphasizing how virtualization technologies make it possible for customers to move application workloads not only between service providers, but also back to their own internal systems if they so choose.

Burke is cautiously optimistic about an economic recovery in 2011, which he says should ultimately increase adoption of cloud computing in the midmarket. But there is still a significant gap in levels of discourse within the IT industry concerning cloud computing and the actual level of awareness of its value to midmarket customers.