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Most firms choose private cloud

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According to a new survey of North American cloud service providers (CSPs) by CA Technologies, more than half reported that their customers are opting for the private cloud services model, while 32% are choosing public cloud services.

In addition, these CSPs expect to grow their businesses by 30% in 2012.

The survey discovered respondents were upbeat about their performance and planned to continue investing in additional resources to increase business throughout the remainder of the year.

Although the cloud market is still considered to be fairly nascent, the average survey respondent has been delivering cloud services since 2009, with 22% reporting having offered cloud-based services before then. Nearly 25% indicate they had been “extremely successful” in their cloud services activities – having met or exceeded their goals – while another 35% noted they had been “moderately successful” in their efforts.

Respondents also offer a diverse set of services cutting across infrastructure as a service, platform as a service, software as a service (SaaS), virtual private data centers and other services, with the highest percentage (two-thirds of respondents) indicating they sell SaaS solutions.

“Cloud service providers are critical players in the cloud computing ecosystem,” says Gary Lawrence, MD of CA Southern Africa. “Third-party providers come from a range of backgrounds – managed services, software development, value-added resellers, even IT consulting and technology outsourcing – and they’re leveraging the cloud to transform their businesses and those of their end customers.”

The survey also explored challenges and areas of investment for CSPs. Not surprisingly, nearly 50% cited dealing with their customers’ security concerns as the top challenge. Issues around billing strategies (39%) and ensuring customer satisfaction (27%) were the next largest concerns, while ensuring regulatory compliance (17%) and managing data center capital costs (12%) appeared much lower on the list.

In terms of their 2012 investments to grow cloud revenue, 55% of the respondents indicated they intend to increase their marketing activities, while 46% planned to create new cloud services to expand their existing offerings. Thirty-one percent will make investments to specialize in vertical markets. These areas of investment suggest that CSPs have recognized the need to differentiate their services in a highly competitive marketplace.

“The survey results mirror many of the conversations we’ve had with our service provider partners,” adds Lawrence. “They are expanding from their earlier roots and finding competitive advantage through delivery of new cloud-based services, and they are looking to see significant growth this year through efforts like vertical specialization and ramped-up marketing initiatives. It’s a fast-paced market with a lot of opportunity, and we’re eager to work with our partners to help our mutual clients accelerate, transform and secure IT.”