Manufacturers Invest in Cloud Computing

Oct. 1, 2011
Spending on cloud computing is set to grow significantly over the next two years in efforts to increase capabilities and decrease budget allocations for IT hardware and software.
Despite all the headlines made in the last year related to cloud computing crashes, the technology remains poised to be the next big thing for IT. After all, with its vastly increased computing power and reduced maintenance and infrastructure costs, the pros of cloud computing far outweigh the cons. For most manufacturers, however, the question is: How relevant is it for us at this stage?Turns out that a number of manufacturers are doing more than dipping their toes in the cloud computing pool and are preparing for a major shift to greater use of the technology.According to the latest research from IDC Manufacturing Insights, in its report “Cloud Computing in Manufacturing,” 44 percent of responding manufacturing firms are either implementing or currently evaluating cloud deployments. Nearly 23 percent have already implemented cloud computing services. The primary interest in cloud computing for manufacturers is, not surprisingly, cloud computing’s potential to significantly reduce IT hardware and software costs.Externally hosted private clouds are of greatest interest to manufacturers based on allocated budgets – growing from 9.4 percent to 14.6 percent over the next two years. The increase in budgets for spending on private clouds corresponds with an increase in IT outsourcing spend (mostly for monitoring and service level assurance services). IDC Manufacturing Insights claims that the correlated increase in private cloud computing and IT outsourcing spend shows that the industry wants to move infrastructure costs out of IT but maintain some control in terms of sharing that infrastructure with other companies. Private clouds, though preferred by manufacturers responding to the survey, are not the only play for manufacturers involved in this space. Public clouds are also expected to gain share among manufacturers, growing from 9.5 percent today to 12.7 percent in two years. When asked what impact the increase in IT spend toward cloud computing may have on IT’s intersection with automation, Bob Parker, group vice president of research at IDC Manufacturing Insights and author of the report, said, “Automation technologies will be definitely be a ‘last mile’ proposition for cloud adoption.”Any immediate impact cloud computing may have on automation will most likely be in specific-purpose appliances for factory and warehouse automation.  “Think about the electric grid,” says Parker, “the delivery of electricity isn't nearly as interesting as the appliances we plug into it.  For automation, the analog would be an analytic appliance that evaluates the data stream coming from the equipment with the ability to go out to the cloud to provision computing power when needed.”To see the complete report, visit the IDC Manufacturing Insights Website.