1. technology and computing

WHITE P APER
Why Cloud Should Be Part of Your Company's Document
Management Strategy
Sponsored by: Sharp
Keith Kmetz
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA
P.508.872.8200
F.508.935.4015
www.idc.com
October 2012
IDC OPINION
The cloud represents a new and evolving computing platform for the online delivery of
many different products and services. IDC's market forecasts demonstrate an
inevitable near-term shift to this platform with literally trillions of smart devices
connected to it, including MFPs and other intelligent business devices such as
interactive whiteboards and displays. While customers may have questions about
cloud implementation, a simple dialogue with their technology supplier should allow
them to determine whether a cloud solution is the right fit for their organization's
business needs. In general, IDC sees the cloud as a win-win opportunity for suppliers
and customers alike.
IN THIS WHITE P APER
IDC views the transition to the cloud as a seismic shift for the future IT market. This
includes defining the cloud and its relevance for business and identifying what topics
and questions small and medium-sized businesses (SMBs) should consider prior to
implementing cloud as part of a comprehensive document management strategy.
SITUATION OVERVIEW
Cloud services continue to grow and evolve at a phenomenal rate, particularly as
companies of all sizes seek to leverage the power of the Internet to reduce
operational costs while increasing access to business information. Not surprisingly,
we see new cloud offerings entering the market regularly and often creating new
product segments and deployment options.
To put some perspective on this growth, IDC's forecast for public IT cloud services
indicates that worldwide revenue will grow from more than $30.45 billion in 2011 to
reach $98.4 billion by 2016. This represents a strong compound annual growth rate
(CAGR) of 26.4%. What is truly impressive about this high growth rate is that it is over
five times the projected growth for the total worldwide IT market.
These market figures demonstrate that it is not a matter of if the cloud will dominate
the future IT market landscape; it's a matter of when the cloud will drive the market.
The answer is obviously sometime in the very near future. This fundamental IT shift is
a call to action. That is, companies of all kinds should already be considering
strategies, services, and devices that leverage the cloud to address two fundamental
business requirements:
1.
An ongoing effort to drive down the business' operational costs
2.
The need to increase the availability of business-related content
Defining Cloud Services
Of course, all the excitement around cloud services requires us to pause and define
exactly what we are talking about. IDC's shorthand for "cloud" is accessing shared IT
resources "on demand" over the Internet from a public cloud or software-as-a-service
(SaaS) provider. Private solutions are another type of cloud service that can be built
locally in a company's datacenter (e.g., enterprise private cloud services). Buyers
generally pay for and use only those assets required and usually order and access
the assets through a self-service portal. In general, the use of the cloud makes
offerings easier and less expensive to access.
Cloud services fall into three broad categories with a common set of criteria and a
variety of deployment models:
 Application services or SaaS (e.g., ERP, collaboration, accounting, document
management, and CRM from vendors such as ADP, Google, Microsoft, and
salesforce.com)
 Platform services or PaaS (e.g., application development/deployment and
middleware delivered via the cloud services model from vendors such as IBM,
Oracle, HP, and Microsoft)
 Servers, storage, and system infrastructure services or IaaS (e.g., servers,
system management, and security services delivered via the cloud from vendors
such as IBM, AT&T, Nirvanix, EMC, and Cisco)
Why Is the Cloud Significant for Your
Business?
The significance of the cloud is wrapped in the expected immediacy of the
technology's adoption. In a recent IDC study, survey respondents demonstrated the
pending swift transition to the cloud across all company sizes (see Figure 1).
According to the results, approximately 37% of all businesses reported that their
companies currently use the cloud. While this percentage rises with company size,
the current percentages are below 50% for all company sizes, with the exception of
large enterprises at 53%. However, the percentages should jump quickly to a solid
majority percentage within a year (nearly 70% for all companies), and then nearly
90% of all businesses will be using the cloud in some manner within three years. It is
clear that cloud will be significant in a very short time frame for all companies.
Competitively, it will be important for such organizations to leverage the cloud to gain
the promised benefits. We get to those benefits shortly.
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FIGURE 1
Time Frame for Cloud Adoption by Company Size
Q.
When do you expect your company to adopt cloud-based services or cloud technology
application for use by your employees?
100
90
(% of respondents)
80
70
60
50
40
30
20
10
0
<100 employees
(n = 215)
100–499 employees
(n = 211)
Currently use
Not using, but will within one to three years
500–999 employees
(n = 141)
1,000+ employees
(n = 255)
Not using, but will within one year
Not using, but will beyond three years
Source: IDC's Cloud and Mobile Print Multiclient Study, 2012
The cloud has a significant impact on organizations leveraging this technology (see
Figure 2). Not only are a number of companies expected to adopt cloud technologies,
but this adoption spans a substantial range of computing applications. Both frontoffice (e.g., email, collaborative, personal productivity) and back-office (e.g., data
backup, IT management, server/storage capacity) applications show high levels of
current or future migration to the cloud, so the impact is significant for the business as
a whole and specifically for the company's internal IT functions.
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FIGURE 2
Solutions/Services Already Deployed to the Cloud
Q.
What solutions/services have already been deployed to the cloud? What solutions/services
will be deployed to the cloud in the future?
Email
Collaboration applications
Data backup/archive/records mgmt
Personal productivity applications (e.g., MS Office)
IT mgmt
Server capacity on demand
Storage capacity on demand
High-performance/technical computing applications
Web site creation/management
Document processing
Print eprocurement
Mobile device management
Data analysis/mining applications
IT help desk/IT service mgmt
Enterprise resource planning (financials)
Enterprise resource planning (HR)
Application development/testing/deployment
Mobile printing
0
10
20
Already
30
40
50
60
(% of respondents)
Future
70
80
90
n = 433
Source: IDC's Cloud and Mobile Print Multiclient Study, 2012
As Figure 2 shows, IT decision makers indicated that only a few document-related
solutions and services have already been deployed to the cloud at any notable level.
Email stands out as the most prominent application deployed to the cloud at present.
However, in the future, IT decision makers expect to deploy a majority percentage of
select solutions and services to the cloud in the categories of collaboration,
storage/backup, data analytics, general IT and mobile device management, document
processing, etc. These results indicate that a fast-moving transition to the cloud is near
across a wide range of applications and technologies. Companies of all types will need
to seriously consider a cloud solution strategy for their business operations in order to
keep up with a transitioning market and maintain a competitive edge.
Companies of all
types will need to
seriously consider a
cloud solution
strategy for their
business operations
in order to keep up
with a transitioning
market and maintain a
competitive edge.
The ongoing challenges of a low-growth economy over the past several years have
forced businesses to operate more efficiently, but often with fewer resources. To
effectively compete in today's business climate, most companies need to rely on a
growing range of technologies (e.g., devices, data, and applications) to meet this
business objective. The emergence of the cloud as a repository for all types of
business-related data and information offers an efficient avenue to maximize access
to such IT technologies while minimizing the costs.
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Recently, IDC asked IT decision makers about the importance of several cloud
characteristics to their companies (see Figure 3). Not surprisingly, factors surrounding
cost efficiencies were rated as important, but other cloud characteristics such as
facilitating collaboration and faster deployment of applications were highly rated. In
addition, all of these factors were almost always given a rating of at least 3 on a scale
of 1–5 (1 = not at all important, 5 = very important). This means there seems to be at
least some understanding from the marketplace that cloud offers obvious benefits
to businesses.
FIGURE 3
Importance Ratings of Cloud Characteristics
Q.
Please evaluate how important the following characteristics of cloud are to your company
(1 or 2 = unimportant; 3 = neutral; 4 or 5 = important).
Cost efficient
Self-service through a portal…faster delivery and reduces IT
workload
Meter usage
Automated and rapid scaling
Flexible migration of workloads between private and public
clouds
Faster deployment of applications
Establish "standard services"
Ability of cloud applications to interact with noncloud
applications
Easier/more cost-effective access to document services
Facilitate collaboration across remote and/or distributed teams
0
20
Important
40
60
(% of respondents)
Neutral
80
100
Unimportant
n = 433
Source: IDC's Cloud and Mobile Print Multiclient Study, 2012
Key Benefits of a Cloud Implementation
The benefits of moving to the cloud appear to be fairly obvious to IDC's respondent
base (see Figure 4). When considering issues such as…
 Reducing total IT spend per employee
 Improving IT staff productivity and service levels to end users
 Reducing total spend on software licensing and maintenance
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 Reducing total spend on custom software development and support
 Reducing total IT and hardcopy hardware spend
 Increasing revenue by enabling the company to deploy new revenue-generating
programs faster
…over 70% of respondents rated each of these benefits as important across all company
sizes. In fact, very few, if any, respondents said that these benefits are unimportant.
FIGURE 4
Importance Ratings of the Anticipated Benefits of Moving to
the Cloud
Q.
Please rate the importance of each statement with respect to what your company’s
anticipated economic benefits of moving to the cloud will be (1 or 2 = unimportant;
3 = neutral; 4 or 5 = important).
Reduce total IT and hardcopy hardware spend
Reduce total spend on software licensing and maintenance
Reduce total spend on custom software development and
support
Improve IT staff productivity and service levels to end users
Reduce total IT spend per employee
Increase revenues by deploying new revenue-generating
programs faster
Reduce our carbon footprint, power, cooling, and related
costs
0
20
Important
40
60
(% of respondents)
Neutral
80
Unimportant
n = 433
Source: IDC's Cloud and Mobile Print Multiclient Study, 2012
Of course, there a number of other inherent benefits of the cloud outside the
productivity and financial gains noted previously. However, these additional benefits
are also part of the cloud's overall value proposition to adopters:
 Scalability. The cloud is scalable so that storage capacity is available for as long
as users need it and for as much as they need. Additionally, the payment model
is scalable in that cloud users pay for only what is used and how much is
needed.
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 Automatic application updates…no intervention required. Applications are
automatically updated so that no IT intervention is needed. This is particularly
important for resource-constrained SMBs.
 On-the-go access to critical business information for the mobile worker. The
cloud allows an increasingly mobile workforce to remotely access important
business information. Users are no longer "tethered" to the network to do their jobs.
Instead, the cloud provides the repository for anytime, anywhere access to
data/documents so that mobile workers can perform work-related tasks "on the go."
The hardware tools leveraged for this access include media tablets and
smartphones. The explosive growth projections for these mobile hardware devices
highlight the crucial requirement for mobile workers to operate at peak efficiency
even while they are moving about during the business day.

IDC forecasts that the worldwide media tablet market will grow from 69.6
million units in 2011 to 222.1 million units by 2016, a 26% CAGR.

IDC forecasts that the worldwide smartphone market will grow from 494 million
devices in 2011 to 1.25 billion devices by 2016, a 20% CAGR.
 Important business information is backed up on the cloud. The cloud
provides backup in case of catastrophic events. Business data is stored in the
cloud within offsite datacenters.
Differences Between SMBs and Large Enterprises with Respect to the
Cloud and Its Benefits
Cloud's benefits are apparent even to SMBs. While some might think that cloud
adoption would be relegated to large companies with deep IT resources, IDC's
research shows that respondents from SMBs with fewer than 500 employees
comprehend the benefits of cloud. However, we observe some important differences
between SMBs and large enterprises:
 Smaller companies rely on their suppliers for technical knowledge. Respondents
from these companies tend to give many more "don't know" responses when
asked about cloud characteristics.
Smaller companies
rely on their suppliers
for technical
knowledge.
 Related to the "don't know" responses in smaller companies, larger companies
often are further along in adopting cloud-based technologies and more aware of
the critical issues around deployment than small companies.
 Related to company size and IT resources, smaller companies place less
importance on metering usage, IT staffing efficiencies, governance, regulatory
requirements, and the need to support numerous U.S. and worldwide locations
than larger companies. This finding is probably a result of smaller companies not
having the size and scope of larger organizations; thus, support for such an
infrastructure is not required. However, it does point to the need for smaller
companies to have some access to outside expertise for IT support and the cloud.
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IDC believes the operational and cost benefits of the cloud make the technology even
more important to cost-conscious SMBs (particularly small offices). Since these
businesses often do not have sophisticated IT departments (or may not have one at all),
the opportunity for suppliers to provide the technical "know-how" to bring SMBs into the
cloud marketplace is compelling. As noted in our research results, there are a lot of
unknowns about the cloud that are causing SMBs to embrace cloud technology more
slowly than their larger brethren. To gain this necessary expertise, smaller companies
should look to suppliers that can help with the inevitable transition to the cloud.
The operational and
cost benefits of the
cloud make the
technology even more
important to costconscious SMBs
…smaller companies
should look to
suppliers that can
help with the
inevitable transition to
the cloud.
To help SMBs that are considering a cloud-based services model for their business,
IDC offers questions and topics to discuss with technology suppliers. While large
enterprises appear to be well on their way to moving forward with a cloud strategy,
SMBs seem understandably less sure about making such a move. To help guide the
discussion, we present some of the top-of-mind concerns expressed by survey
respondents regarding cloud adoption (see Figure 5). Not surprisingly, many of the
issues revolve around the technology's cost benefits, security, and IT governance
requirements, including the impact on current IT infrastructure.
FIGURE 5
Top-of-Mind Concerns About Cloud Adoption
Q.
What concerns are top of mind for you with respect to cloud adoption?
Integration with in-house IT systems and management
Keeping our systems and information outside of our firewall
Internet access or service provider's systems will go down
Will cost more than the traditional license/own model
Degraded network speed or overloaded provider systems
could bog down system performance
Cloud cannot support the operational requirements of
critical applications
Not enough ability to customize to our organization's needs
Network infrastructure (routers/switching) limits on-demand
model
IT governance issues, particularly related to defining
standard services and SLAs
Regulatory requirements won't allow us to put systems
and/or information outside of our direct control
Not enough suppliers offering on-demand model
0
10
20
(% of respondents)
30
n = 433
Source: IDC's Cloud and Mobile Print Multiclient Study, 2012
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Topics and questions related to cloud adoption and implementation to discuss with
your technology supplier include:
 Proof that cloud implementation can work for your business. This may seem
like an obvious point, but it is worth discussing how this new technology will
benefit your customers. In this instance, we see customers as both internal
(employees) and external (buyers of your goods or services) to your
organization. Ask if they use these services in their own current business as well
as in other businesses they may have owned in the past. You may also want to
know the supplier's experience in providing cloud technologies to businesses
similar to yours (e.g., customers within the same industry and/or customers with
a similar number of employees or similar revenue).
 Cost impact. While cloud is touted to cut costs, there are a number of issues to
consider that can impact your business from a bottom-line standpoint.

Creating new business processes versus replacing existing business
processes. Is this implementation a net-new capability for your company, or
does it replace an existing process? If it is new, consider the benefits that
can be gained by improving information access or other business process
efficiencies, in addition to the direct cost of the service. If it is a replacement
for an existing process, you should consider the soft cost savings often
realized, such as reduced support and maintenance costs, software costs,
and related equipment costs.

Demonstration of cost savings. Related to proof that cloud can work for
your business (as noted in the first bullet of this list), have your supplier
detail the cost savings (e.g., hardware, software, maintenance) you can
anticipate as a result of the implementation. Ask your supplier to share the
cost savings experienced by other customers, either within your industry
and/or with a similar number of employees or similar revenue.
 Security and general IT requirements. IDC's research has identified the threat
of security, or lack thereof, as a commonly perceived concern for deploying
solutions to the cloud. Ask your supplier to outline its security implementation
approach in order to alleviate any concerns that you may have.

Identify what you are comfortable with. You may want to implement cloud
for some processes while keeping other processes inside the company. Talk
to your supplier about which document types or business processes you
might want to start to move off-premise and into the cloud. IDC's research
has shown that companies of all sizes appear to be comfortable with moving
email, collaborative, and personal productivity applications to the cloud. On
the other hand, our data shows that companies are less comfortable with the
deployment of traditionally sensitive data such as finance or human
resources to the cloud. As a result, you may want to consider cloud
deployment in phases. Think about which business processes are priorities
for current deployment and which could be deployed later on based on your
company's comfort level.
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
Know where your cloud-based business information is being hosted.
This isn't necessarily a critical issue of needing to know the details, but it's
your business information. You want to know where it is.

Find out what happens when employees leave the organization.
Suppliers should be able to address the issue of how sensitive company
information remains within the company, even as employees come and go.
You need to be assured that company information deployed to the cloud
stays with the company and doesn't leave when employees leave the
company.

New cloud implementations need to integrate within your existing IT
infrastructure. Key questions and issues for suppliers to address include:
 How well will the cloud solution integrate with the existing in-house IT
systems and management?
 Does your network infrastructure (routers/switching) limit the on-demand
(cloud) model, or could adoption result in degraded network
performance (speed or overloaded provider systems)?
 The supplier should also be able to demonstrate that a cloud
implementation will offer the benefit of simplifying future software
deployments and/or upgrades for the company. The supplier should
also articulate the specific impacts of this benefit for your business.

What if the Internet goes down? Can cloud support the operational
requirements of critical applications?
 Compliance. Are there any internal governance issues, particularly related to
defining standard services and service-level agreements (SLAs), as well as
external regulatory requirements for your particular business (e.g., HIPAA for
healthcare) that should be considered before implementing a cloud-based
solution?
FUTURE OUTLOOK
It's important to understand that cloud services are not an isolated IT growth segment
but are part of a broader picture for future IT industry transformation and growth.
Cloud is interconnected and accelerated by a number of IT forces, including mobile
1
devices, wireless networks, "big data," and social networking technologies. Together,
these forces are creating another wave of IT growth. The last similar growth spurt
occurred several years ago when the PC and other technologies such as LANs and
relational databases combined to extend IT's value to many more users and uses.
1
IDC defines big data technologies as hardware and software technologies and architectures
designed to extract value economically from very large volumes of a wide variety of data by enabling
high-velocity capture, discovery, and/or analysis.
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We anticipate that the cloud, along with mobile, wireless, "big data," and social
networking technologies, will literally reach billions of users. According to IDC figures,
approximately 2 billion people are already connected to the Internet (half already
through mobile devices). Just as significant, we expect that we'll also see trillions of
smart devices connected to this platform. This will lead to an expansion of new
applications and services built upon the evolving cloud platform.
We believe that MFPs and other intelligent business devices such as interactive
whiteboards and displays represent a few of the device types that will leverage the
cloud and associated technologies. The MFP is in the midst of transforming from a
"box" that produces hardcopy output to a comprehensive document processing unit
for both paper and digital documents for businesses of all types. Most MFPs
incorporate "smart" document platforms that facilitate both internal and external thirdparty software development to enhance the value of the MFP beyond paper-based
output. The cloud provides another avenue of new capabilities for the MFP by
enabling access to a broader range of content in such a manner. Interactive
whiteboards and digital displays are also part of the business communication
ecosystem that will leverage the cloud in the future.
IDC's wealth of research and market commentary on the cloud reveals the inevitability
of the technology's role in the future computing environment. Customers' recognition
of key cloud benefits revolving around cost, collaboration, increased access to
business information, and overall efficiency gains is evident. While there are ongoing
concerns around working within the current IT infrastructure, security, and costs,
suppliers that can address and alleviate such worries stand to benefit as the market
evolves toward the cloud and mobile platform. Customers who make the move to
carefully begin implementing this new platform should expect to benefit from greater
operational efficiencies and lower operational costs. Ultimately, this can be a win-win
scenario for suppliers and customers alike.
Customers who make
the move to carefully
begin implementing
this new platform
should expect to
benefit from greater
operational
efficiencies and lower
operational costs.
Ultimately, this can be
a win-win scenario for
suppliers and
customers alike.
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Copyright 2012 IDC. Reproduction without written permission is completely forbidden.
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