Cloud Infrastructure-as-a-Service (IaaS) offerings have transformed how enterprises develop and deploy custom applications for their employees and customers. Development teams and entire companies can deploy an application in the cloud without the overhead of a managing a datacenter. The rise of cloud coincides with the move across industries to digital business models – from mobile commerce to online healthcare services. In this issue of CIO Corner, we look at how cloud helps companies in traditional industries transition to their new role as software providers and whether security and governance have kept up.

Financial services organizations face fierce competition for consumer and business banking customers, and technology can make all the difference. Wells Fargo embraces cutting-edge technology at the highest level: CEO Tim Sloan espouses the importance of APIs and the cloud to develop better solutions for customers faster than ever before. The message for CIOs is that the highest levels of leadership want to know how the company plans to take advantage of technology trends previously only discussed in internal IT meetings. The cloud powers trends like artificial intelligence and mobile applications, and companies in all industries have plans to replace datacenters with cloud environments.

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The economy, agility, and interconnectedness of cloud open up new business model opportunities. A healthcare startup has turned Medicaid’s patient database from a “digital vault” to a flexible source of real-time learning for researchers. Healthcare is one of the industries experiencing an information revolution with cloud at the forefront. While rogue cloud use in healthcare can lead to expensive HIPAA violations, a policy-based cloud strategy can reduce overall risk and harness the cloud’s benefits.

In many regards, cloud solutions provide a leg up for enterprises in their arms race against hackers. Traditional software requires periodic updates from the customer to prevent hackers from exploiting vulnerabilities. Software patching marks an essential if pesky task for IT teams. Gartner predicts 99% of vulnerabilities exploited will be known by security for at least one year. In other words, IT security teams will unnecessarily leave doors open to hackers because of the difficulty of executing known software patches. Cloud software, on the other hand, automatically receives security updates from the provider without any effort on the customer’s part. Given the prevalence of software vulnerabilities, this capability alone will make cloud a superior security choice for many companies.

Startups were early adopters of IaaS platforms, and to date, the vast majority of SaaS providers rely on IaaS services like Amazon Web Services, Google Cloud Platform, or Microsoft Azure to power their applications. Demand for IaaS was estimated to grow 42.8% in 2016, twice the rate of SaaS. An even bigger wave of IaaS adoption may be yet to come. The enterprise IaaS market represents an enormous opportunity still in its early days. Cloud providers like Amazon have started to tailor their offerings to meet the needs of enterprise clients, adding features to help companies move on-premises data to the cloud.

What has held enterprises back from embracing IaaS? Companies have not avoided IaaS by any means; public-facing websites and testing and development environments have been the first workloads to move to the cloud. Yet companies are still reluctant to move workloads with sensitive data to the cloud due to security and compliance concerns. Despite the integrity of cloud providers’ infrastructure security, IT teams fear a lack of control when applications leave the corporate network. Policy enforcement, in particular, poses a challenge to organizations who have internal and industry requirements that must remain consistent across different applications and environments. IaaS is growing at breakneck speed, but security and control barriers may be holding back the floodgates for an even larger wave of growth.