NRI Papers
No. 205 September 1, 2015
  Increased Adoption of Cloud Services and Its Impact on the ICT Market  
Kotaro KUWAZU

As of 2014, the size of the Japanese cloud services market is predicted to reach 180 billion yen, even if limited to public clouds. If the extent to which cloud services are used is not taken into consideration, nearly 60 percent of Japanese companies have adopted cloud services. Even if usage is limited to "mission-critical or daily operations," more than 30 percent of Japanese companies are using cloud services. Whether companies should use cloud services is no longer a matter of deliberation. Companies are approaching the stage where they should examine the "extent to which they can use cloud services" and the "areas in which cloud services should not be used."

With the increased use of cloud services, the focus of IT spending by users has been shifting from equipment to services. In North America, as of 2010, server shipments to data centers already exceeded those to end-user companies. The idea of end-user companies individually introducing servers has now become marginal. Accelerating trends have been seen in making servers "white boxes" without a manufacturer's brand name as well as in "designating optimal specifications (applying market prices to MPU and memory and designating performance)." As such, rather than being office equipment, servers have now become similar to manufacturing equipment aimed at factories, dramatically changing the production and distribution of servers. Major communications providers are planning to place large volume orders directly with electronic manufacturing services (EMS) by bypassing server manufacturers. Because of this trend, the presence of equipment manufacturers has been rapidly shrinking.

While it has become common for companies to adopt and utilize cloud services, they are also looking for ways to adopt cloud computing or related technologies in the areas of systems. Even though companies are aware of the security and reliability problems presented by public clouds, they have been stepping up moves to transform system infrastructure to cloud-based environments. Specifically, companies are creating cloud portfolios depending on the required quality and price level such as those consisting of a cloud farm for each data center or highly reliable private cloud infrastructure.

Contents
I Current Status of and Future Trends in the Adoption of Cloud Services
II The Shift to Cloud Services and Its Impact on Current IT Spending and Business Models
III Reappraisal of Private Clouds and Trends toward Adopting Hybrid Clouds

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