Technology Business Research Inc.’s (TBR) 2H14 cloud customer research reports found end users globally are engaging cloud professional services vendors at twice the rate of private and public cloud vendors, indicating cloud professional services are typically the entry point as enterprises make the decision to migrate to cloud and consultants provide guidance and education to prospective cloud customers.

Public, private and hybrid cloud integration will follow cloud professional services growth in coming years, as adoption rates have increased. TBR expects the private cloud adoption rate to reach 85% by 2018.

TBR’s 2H14 Private Cloud Customer Research report shows a shift in the type of private clouds adopted, with a 65% to 35% split of third-party-delivered private clouds to self-built private clouds. It's a minor but telling shift from the 70% to 30% split in 2013 and 1H14 that indicates enterprises are more comfortable with and educated on cloud and are growing their cloud-related skill sets.

TBR (www.tbri.com) estimates the 2014 private cloud market opportunity is $41 billion and is expected to grow at a 15% CAGR to $72 billion in 2018. Private cloud budgets, however, declined year-to-year in dollar value and as a percentage of cloud spend in 2H14 as the proliferation of open-source public cloud offerings gained in popularity.

"Expectations around the benefits of private cloud adoption are becoming more realistic as the market matures. Cloud buying behavior has become less collaborative over the past six months, with IT regaining control of cloud decisions, leading to an influx of infrastructure workload adoption," says TBR Cloud Practice Analyst Cassandra Mooshian.

The study found security is the top customer-perceived barrier to private cloud adoption, followed by integration for third-party-delivered private cloud customers and usage monitoring for self-built private cloud customers. Such insights gained from the report help cloud vendors better align their portfolios and messaging to customer needs as the TBR cloud research stream gives vendors a view into their customers’ minds and behaviors, increasing their opportunities to succeed in the market.

TBR’s 2H14 Hybrid Cloud Customer Research report indicates 22% of the large enterprise market has integrated cloud across their IT environments, creating a $7 billion hybrid integration market in 2014. Demand for integration will increase over the next four to five years as the enterprise market purchases cloud, and then integrates it to optimize efficiency, productivity and cost. Infrastructure is where most enterprises begin their hybrid cloud integrations, followed by platform and lower-risk applications.  

Jillian Mirandi, a senior analyst in TBR’s Cloud Practice, says: "Large, multiline vendors like IBM, HP and Microsoft will continue to dominate the hybrid cloud market, as they offer preintegrated solutions across many areas of IT environments. These vendors are opening their environments, enabling interoperability for customers and increasing developer appeal. On the public cloud vendor side, productivity portfolios Microsoft O365 and Google for Work, as well as Salesforce.com on the CRM side are experiencing growing levels of integration. I expect vendors that make it easy to integrate through opening code and APIs as well as through prebuilt connectors will be purchased as part of hybrid IT environments.”

The third piece of TBR’s 2H14 cloud customer research stream, the Cloud Professional Services Customer Research report, surveyed 453 end users and highlighted security as the biggest perceived risk of cloud adoption but also the biggest differentiating factor among vendors for customers in their purchase decisions, making security a critically competitive segment for vendors into 2015. Traditional systems integrators and consultants are facing more pressure from ISVs Microsoft, Oracle and SAP, which use security software expertise and orchestration capabilities to earn their spots on vendor leaderboards.

"Security remains the driving force behind cloud vendor adoption, while the emerging trends of hybrid IT and analytics, and the associated security complications they bring to the table, foreshadow steady and growing demand for cloud professional services over the next few years," Mooshian says.

TBR surveyed over 1,865 enterprises across the U.S., the U.K., Germany, France, China and India to understand the overall cloud market’s adoption rates, buying behaviors and vendor landscape. Of the total survey population, we asked 1,305 cloud purchasers questions to dig into their preferences, planned purchases and desired steps for vendors to make. From the data, TBR produced three reports, Private Cloud Customer Research, Hybrid Cloud Customer Research and Cloud Professional Services Customer Research. TBR will publish the Cloud Brokerage Customer Research report in early 2015.