A Microsoft survey on Cloud investments noted that organizations rely more on digital IT infrastructure than physical.
95 percent of customers intend to renew their contract with their primary cloud and hosting provider, according to a Microsoft-commissioned study conducted by 451 Research.
57 percent of organizational infrastructure will be digital, compared with physical in two years, up from 51 percent today.
Over 80 percent of customers have an annual or longer term contract with their primary cloud and hosting provider, with 43 percent having a contract of two or more years.
38 percent of customers indicate they will increase spending with their primary cloud and hosting service provider upon contract renewal, further emphasizing the importance of solidifying customer relationships.
Aziz Benmalek, vice president, Hosting and Cloud Service Provider Business, Microsoft, said: “By adapting and servicing customers through their entire cloud life cycle and keeping turnover low, cloud service providers will avoid costs associated with churn and new customer acquisition, while benefiting from increased stability and more projectable revenue streams.”
71 percent of customers’ cloud and hosting budgets are allocated to managed services, application hosting and security services.
This aligns with the trend of customers increasingly investing in the cloud to help achieve proactive business goals, with growing revenue, improving the quality of offerings and reducing costs cited as top priorities.
“Cloud adoption is a key driver in the digital transformation for organizations of all sizes, and service providers can benefit from adopting a more complete approach to the customer life cycle to help them throughout this process,” said Michelle Bailey, senior vice president, Digital Infrastructure and Data Strategy, 451 Research.
Odus Wittenburg, senior vice president, Rackspace, said: “We absolutely see the value of creating long-term relationships with our customers who are transforming their IT by migrating critical workloads to cloud models.”
Cloud service providers can tap into infrastructure solutions such as Windows Server, Microsoft System Center, Microsoft SQL Server and Microsoft Azure, as well as applications such as CRM Online, Skype for Business, SharePoint, Office and Office 365 to provide lifetime value.
451 Research surveyed more than 1,700 IT decision-makers across small, midsize and large organizations in mature and emerging markets including Australia, Brazil, Germany,India, Japan, Netherlands, Singapore, Turkey, the U.K. and the U.S.