I attended a recent webinar by IDC and NetSuite entitled “The Future of Software: Why Cloud Computing Matters to You” and learned some interesting trends about cloud adoption that occurred over the past year, as well as predictions for the future.

On the event, Michael Fauscette Group Vice President, Software Business Solutions, IDC
confirmed a trend, which at NetSuite we’ve been seeing with our customers - that cloud computing is increasingly being adopted by large enterprises. In fact, IDC forecasts that by 2014, 40% of the entire SaaS market will be accounted for by companies with 1,000 or more employees, and by that time, the market will have doubled in size.

Some of the first departments to adopt cloud business applications were for areas outside the finance organization - applications such as sales and HR. However, the IDC data also identifies another key trend: cloud computing has reached the back office. In fact, on the webinar, according to IDC’s North American Cloud Survey (conducted in January 2011), Mike revealed that about 55% of all companies considered ERP financials as the second most suitable area for a public cloud implementation.

At NetSuite, with over 7,000 customers and 10,000 organizations running NetSuite, we’re seeing these trends gather momentum. Some of the world’s largest enterprises are taking their businesses systems to the cloud - enterprises such as Jollibee, Asahei Kasei, RightNow, divisions of Olympus, and others are running on NetSuite. The combination of IDC’s analysis and NetSuite’s momentum in the enterprise is clear vindication that the value of cloud ERP is too big to ignore for even the largest businesses. Cloud ERP enables businesses to reallocate their IT budget from maintenance to innovation by finally getting access to the latest ERP functionality without getting into an upgrade quagmire. As a result, these companies realize the benefits of running their business applications, even mission critical ones such as ERP, in the cloud.