David Hamilton (14 Posts) 
David Hamilton is a Toronto-based technology journalist who has written for the National Post and other news outlets. He has covered the hosting industry internationally for the Web Host Industry Review with particular attention to innovative hosting solutions and the issues facing the industry. David is a graduate of Queen’s University and the Humber College School of Media Studies.
Hosting providers are often told that security is one of the biggest barriers to customers adopting cloud. Following that logic, it should come as no surprise that security could be the most lucrative cloud opportunity for web hosts over the next few years, a new report by Microsoft suggests.
According to Hosting and Cloud Go Mainstream: 2014, a study released on Wednesday and conducted by 451 Research, 7.1 percent of organizations still believe that security concerns and issues are their single biggest challenge over the next two years.
“While cloud environments are significantly changing the way businesses operate today, one thing that hasn’t changed is the importance of security. As a result, security has emerged as the primary, and potentially most lucrative, cloud opportunity for hosters,” Michelle Bailey, senior vice president, Digital Infrastructure and Data Strategy, 451 Research. “Hosting is now the de facto solution for ‘trusted cloud’ implementations, and customers are willing to pay a premium for assurances. Our research shows that 60 percent of customers would pay their hosting service provider a 26 percent premium on average for security guarantees – and an additional 25 percent are already paying for such services.”
Aside from cloud security, the report looks into the phases and types of cloud deployment at more than 2,000 organizations around the world, in a variety of fields including manufacturing, finance and banking, science and tech, healthcare, government and education.
According to the report, on-premises private cloud adoption accounted for 26 percent of on-premises infrastructure spending last year. Hosted private cloud will account for 32 percent of hosted spending in the next 24 months.
In terms of hybrid cloud implementation, 51 percent of organizations surveyed said they had configured a hybrid cloud deployment. Combining an on-premise private cloud with a hosted private cloud was the most popular hybrid cloud configuration, with 60 percent of hybrid users having deployed this type.
Microsoft noted the trend towards hybrid cloud adoption in a study last year, called The New Era of Hosted Services. In an interview with the WHIR, Limena said Microsoft was in a position to capitilize on this trend given its vast partnership channel. Over the past two years, Microsoft has added around 9,500 hosting service providers.
Recently, Microsoft launched ExpressRoute, a new service that offers private connections between customer data centers and Windows Azure, enabling them to use the Azure public cloud as an extension of their private deployments.
Enterprise hybrid cloud adoption will help drive the market, which is expected to reach $79.54 billion by 2018, according to a MarketsandMarkets study.
The study finds that 45 percent of organizations are moving past the pilot phase of their cloud computing deployments, and more than 30 percent now have a formal cloud computing strategy in place.
Nicole Henderson (12 Posts) Nicole Henderson is the Editor in Chief of the Web Host Industry Review where she covers daily news and features online, as well as in print. She has a bachelor of journalism from Ryerson University in Toronto. You can find her on Twitter @NicoleHenderson.
