Cloud applications are still in the nascent stage of all applications in companies (19% of the average large U.S. company’s applications, 12% in Europe, 28% in Asia-Pacific, and a healthy 39% in Latin American companies). The trend is to work towards the ratio of cloud to on-premises applications to increase greatly by 2014.
The clear majority of applications in 2011 – 81% in the U.S. companies and 88% in European companies – were resident on computers located on their premises.
In Asia-Pacific, on-premises applications were 72% of all applications in 2011, while 28% were based in the cloud. In Latin America, 61% of all corporate applications software were on-premises vs. 39% that were in the cloud.

American companies project cloud applications to increase from 19% of all applications (cloud + on-premises) to 34% by then. The European companies surveyed expected that cloud applications as a percent of total applications would double, from 12% in 2011 to 24% by 2014.

In Asia-Pacific and Latin America, cloud applications are expected to be at least half of total corporate applications by 2014 – 50% for Asia-Pacific companies and 56% for Latin American firms.

The comparisons of the above regions reflect a mix of company sizes, both large and mid-sized. For example, 88% of the European respondents had revenue of at least $1 billion, while 75% of the Asia-Pacific and 49% of the Latin American respondents were $1 billion+. Even if we look only at companies with at least $1 billion in annual revenue in all four regions of the world, cloud applications as a percent of total corporation applications show a trend similar to the overall results.

In the U.S., $1B-$10B Companies Have the Greatest Percentage of Cloud Apps

In each region, we looked at cloud apps as a percent of total apps by company size and saw some interesting patterns. One was that in American companies the “mid-sized” large firms ($1 billion to $10 billion in revenue) were the heaviest users of cloud applications. In these companies, cloud applications represented 27%-28% of total applications.  And by 2014, U.S. companies with revenue of between $1B $5B said they expected cloud applications to be 52% of all applications – more than twice the percentage (23%) expected by companies of more than $50B in revenue. (See Exhibit II-3.).

In contrast, cloud applications were only 14%-17% of total applications in companies with revenue of more than $10 billion. In Europe, there was much less variation in cloud applications as a percent of total applications by company size (for 2011, and projected for 2014). (See Exhibit II-4 below.)

Cloud Adoption: Reaching Critical Mass

The numbers showing future cloud usage by 2014 are striking – ranging from one-quarter of all corporate applications being in the cloud in Europe, to one-third in U.S. companies to about half in Asia-Pacific and Latin American companies. Yet even though these numbers are projections of future adoption trends, we nonetheless believe that large corporations have passed the inflection point, or critical mass, in adopting cloud applications – at the very least, in private clouds that a company owns (or are run for them by a third party).
In the last two years, the company has moved all its financial systems for its general ledger, payables and fixed assets to the cloud. However, by the end of this year the company expects 80% of its applications to be in its private clouds.

And the bank continues to identify which of its more than 3,500 applications that it has amassed over the last 30 years can (and can’t) be shifted to the cloud.