Datacenters Quit Playing With Cloud; Put it to Work Instead

Production apps make up 60 percent of corporate use of the cloud

A new study examining the ways large companies use computing platforms concludes that the cloud is passing the tipping point between its earlier status as a playground for marketing and dev/ops projects and is becoming a genuine extension of datacenter resources.

During the last 12 months large companies have increased their spending on cloud services by 45 percent and shifted the type of workloads housed on cloud platforms to the point that production applications now account for 60 percent of all corporate cloud usage, according to the 2013 State of the Enterprise Cloud Report, an annual effort from Verizon Terremark – the hosting and cloud-services company acquired by Verizon in 2011.

The report, based on Verizon/Terremark’s own usage data from the past 12 months, shows corporate customers have increased their use of cloud-based storage by 90 percent during the past year and doubled their use of cloud-based memory.

At the same time, the number of virtual machines (VMs) running in the cloud has increased only 35 percent – indicating that the apps running in those VMs are far more resource-intensive than was typical during the previous year, according to Verizon’s analysis.

It also indicates corporate users are consciously avoiding cloud-based virtual-server sprawl by limiting the number of VMs running on public clouds and making better use of the VMs they do launch with more memory and storage capacity, according to analyst Brian Profitt, in a blog at

Enterprises “have moved beyond development and testing and are running external-facing and critical business applications in the cloud,” according to the report.

Sixty percent of the corporate apps housed in the cloud are also web-based or Internet-facing, which makes them simpler to run in a virtual environment and manage through the cloud rather than in a physical datacenter, according to the report.

A very different kind of app – backoffice applications such as manufacturing, resource planning and other core business software – now account for 23 percent of all corporate apps in the cloud. Back-office applications don’t benefit much from the web-centric nature of the cloud, but do require higher levels of security, availability and industry-specific regulatory or interoperability requirements.

That, as much as the 45 percent increase in corporate spending on cloud services, shows corporate IT managers are using the cloud as a way to extend or expand their existing datacenters, not just porting their most web-friendly apps to the cloud to get them out of the datacenter.

The conversion isn’t complete, however. Internet-facing production applications are the most common business apps in the cloud, while internal-facing production software is fourth most common.

Nos. 2, 3 and 4 in the list are still the development, staging and proof-of-concept apps that have made up the biggest proportion of corporate cloud use until recently.

“Many” enterprises are still just moving low-priority or commodity services to the cloud, according to Verizon’s report, which didn’t note the number it considers “many.”

The mix of internal- and external-facing apps and rapid increase in demand for more resource-rich virtual machines to run demanding workloads, however, indicates a genuine shift toward hybrid cloud models in which apps are housed in the datacenter or cloud based on where they’ll run most efficiently.

Even the most virtualized datacenters are still in the early stages of a migration to a hybrid cloud model, the report admits. Increases in usage and type of workloads running on the cloud don’t mean the corporate world has converted to hybrid computing in toto.

It does mean that “IT is done playing around with cloud,” however, and is on the way to turning it into something more useful than a file locker or developer’s sandbox, Proffitt wrote.

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