Cloud storage hype: Customers not buying it

For all the hype around cloud computing, few business customers are actually storing data on Web-based platforms, according to a new study that casts doubt on the popularity of cloud storage.

Just 3% of companies have implemented cloud storage, and the vast majority of the customers have no plans to put data in the cloud, according to a survey of 1,272 IT decision-makers at enterprises and SMBs in North America and Europe.

Storage vendors and IT professionals both have spent much time discussing the cloud over the past year, because data storage needs are growing at least 30% per year while budgets stay flat, writes Forrester analyst Andrew Reichman in the report “Business Users Are Not Ready For Cloud Storage.”

But so far, “this is just talk,” Reichman states.

“Respondents in all geographies and of all company sizes appear to have little interest in moving their data to the cloud any time soon,” he writes. “There is long-term potential for storage-as-a-service, but Forrester sees issues with guaranteed service levels, security, chain of custody, shared tenancy, and long-term pricing as significant barriers that still need to be addressed before it takes off in any meaningful way.”

The Forrester survey asked IT decision makers if they have any plans to adopt cloud storage services such as Amazon S3, EMC Atmos, Nirvanix, The Planet, or AT&T.

Forty-three percent of respondents said they are not interested in cloud storage, and another 43% said they are interested but have no plans to adopt. Three percent plan to implement a cloud storage platform in the next 12 months, and another 5% plan to do so one year from now or later.

While 3% of respondents have already implemented cloud storage, only 1% are expanding an existing implementation.

In general, enterprises are slightly more interested in cloud storage than small- and medium-sized businesses, and interest in cloud storage for backup is greater than interest in general purpose storage clouds, Reichman says. The market has numerous mature backup services such as Asigra, EMC’s Mozy, i365, IBM Business Continuity and Resilience Services and Iron Mountain, he writes.

“Why the greater interest and adoption of backup-as-a-service? First, it’s a complete service offering, not just CPU or storage capacity,” he writes. “You get the backup software intelligence and storage capacity in a fully managed service. Second, it’s solving a very specific pain point — the pain of bringing a costly and error-prone, but very necessary, IT function under control. This is in contrast to storage-as-a-service offerings where the user has to figure out how to put it all together.”

Overall, though, storage-as-a-service offerings still need time to develop, Reichman says. Before adopting, customers need to consider how cloud storage integrates with existing applications and processes, and analyze the total cost over at least a three-year period.

“The hype is strong around storage-as-a-service, but given the fact that your peers are adopting it very slowly, it makes sense to wait on this,” Reichman writes. “It’s likely to be several years before offerings are mature, so don’t rush into anything here.”