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The Middle Market’s Cloud Computing Conundrum

Hal Conick

Cloud computing technology has been growing in prominence, hype and cash flow over the last few years, but is the middle market ready for the change it brings?

Cloud computing has gone from a swelling buzz phrase to a near-inescapable reality. Just look at some recent stats: Amazon Web Services, perhaps the most well-known cloud service, generated nearly $8 billion in revenue in 2015. Morgan Stanley predicted Microsoft’s cloud products will generate 30% of its revenue by 2018. Worldwide spending on cloud services is expected to reach $141 billion in 2019, up more than 100% from 2015.

Midsize organizations, which contribute 33% of the U.S. private sector GDP and 60% of all new jobs created, according to data from Cisco, usually work with smaller budgets than large companies. Cloud services, known for cutting costs when compared with on-premise IT services, may seem like the logical fit, but the industry still has something of a cloud computing conundrum on its hands. 

A 2015 report from Deloitte found that 42.4% of middle market companies were in the deployment phase of cloud computing in 2015, up from 26% in 2013. Approximately 21.2% of midmarket companies had a successful, mature deployment of a cloud solution in 2015, up from 9.2% in 2013.

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Hal Conick is a staff writer for the AMA’s magazines and e-newsletters. He can be reached at hconick@ama.org or on Twitter at @HalConick.