The increasing budgets extend to many areas, including – infrastructure, software and mobile devices. The survey found that 47 percent of SMBs already use tablet computers, a recent development that could require significant expenditure to integrate.

SMBs have a reputation as eager adopters of Software-as-a-Service deployments such as cloud storage, which could allow companies to get more out of increased IT budgets, or move costs from capital expenditure to operating expenditure columns on the ledger. Cloud systems are also highly compatible with the smartphones and tablets that SMBs favor.

Tech blogger Eric Renner wrote for Vator that small companies are empowering themselves with cloud deployments. He described cloud systems as allowing SMBs to automate certain essential functions and focus on core competencies. A company that cannot afford to maintain a large, on-premise file archive could find more success with cloud archiving on a subscription model.

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"Today's SMBs are in a unique position to embrace new technologies that not only provide a competitive edge, but also allow them to improve their ability to recover from a disaster while protecting the information that their businesses depend on," said Symantec marketer Steve Cullen.

The survey found that the hope for more disaster preparedness motivated many cloud purchases. Among respondents, 34 percent stated that a desire to be protected from data loss disasters motivated moving systems to the public cloud and virtualizing processes. Among early adopters of cloud initiatives, 43 percent stated that the private cloud had made them more prepared for a disaster, and 41 percent said the same of the public cloud.

Cloud desire is turning into a full-blown wave of purchases, according to ZDNet. The source reported that a recent Spiceworks survey of SMB cloud use found 48 percent of SMBs using the cloud. That figure is up from 28 percent in early 2011.

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"It's an interesting dichotomy between people that have the perceived barriers to cloud adoptions in security and privacy and those that actually have taken the plunge and used the cloud," Microsoft's Tim Rains told the source.

The Register found that, among cloud-using companies, the overall running costs of data protection can be significantly lower than at those that have not made the switch. In a recent poll by comScore, companies with cloud security reported 19 man hours a week maintaining the systems, while non-adopters spent 25.

According to News24, a new O+K Research poll found cloud security growing in importance. The source reported that, despite a trend toward virtualizing systems, many companies do not have plans to place their security in the cloud. The perception gap cited by the Register could be responsible.

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Fried stated that the move to the business cloud began with free consumer applications. IT workers accustomed to services such as Skype and Flickr began to see the value that similar technology could produce in the office. One wave of business-specific technology later, Fried sees the cloud as a value-adding technology for small to medium-sized businesses.

According to the Journal, Fried believes the cloud is a technology that will make CIOs reassess their core business needs. The choice between consumer and enterprise style technology, he said, is the difference between customization and economics.

While Fried highlighted the cloud's potential and appeal, a recent Cisco survey cast light on the factors keeping companies wary of the systems. According to the data, cloud security remains an area of concern, with 72 percent of respondents rating data protection a top priority.

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Nielsen sees the end of traditional methods of software coming within the next 5 years. While applications have commonly been sent out on physical media since the beginning of computing, he sees the use of Software-as-a-Service, combined with the digital download of more traditional software, as the death knell for discs.

In addition to the distribution of office software through the cloud, Nielsen observed that the world of backing up data has transformed into a cloud-dominated field. He stated that backup providers that do not account for the cloud are rapidly falling out of consideration.

The companies powering the cloud to maturity include small businesses, according to a new report by software company Spiceworks. The report found small to medium-sized businesses eager to enter the cloud with 17 percent planning to place their backups in the cloud in the next six months and 12 percent planning on general cloud storage.

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"Don't underestimate how far local, state and federal government is behind [in computing]," Newsom told a tech conference audience, according to the source. "We have to wake up to the new reality."

Computerworld reported that federal CIOs have found it prohibitively difficult to add the cloud to their infrastructure. Some of the blame was placed on IT departments needing to convince politicians that the cloud is the way forward before being granted permission to change.

One development that could help the march of cloud systems is government agencies' increasing reliance on mobile applications. Government Computing News reported that several agencies have opted for mobile devices using virtual desktops. Agencies with strong cloud support in place can deploy this technology more easily.

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"This award is a great example of how our IT Transformation initiative is already delivering value to the Department," said Interior Secretary Ken Salazar, according to the source. "Implementing a Department-wide, cloud-based email system that helps modernize the ways we do business while cutting costs is good government, plain and simple."

The Department of the Interior also made sure to add email archiving for personal email accounts. As the federal government's communications are often matters of public record, a reliable cloud archiving solution could make sure no data is lost.

One concern for government agencies adding cloud systems is the specter of cloud security. According to the Washington Post, the FedRAMP cloud project, designed to provide a standardized cloud adoption plan, is expected to help in this regard. Officials hope that the project will make it easier for agencies to find a secure cloud solution that suits their needs.

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"From the CIO standpoint, information technology is becoming more complex and CIOs are under a lot more pressure to do things faster and less expensively," said Whitman, according to the source.

According to Computing, Whitman sees a new type of challenge for IT departments as they automate and monitor their database and security capabilities alongside adopting Software-as-as-Service versions of their basic office productivity software.

CloudPro, however, clarified the role of the cloud at a company. While stating that the cloud is a large transformative force, it should not be the motivator of change. Instead, companies should use cloud applications to meet goals that already existed within the company and that solve specific business cases. The source praised the work of the Sunderland City Council, which used cloud computing to transform the economic state of the city, rather than adding cloud for its own sake.

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The source stated that backing up and disaster recovery were listed as excellent uses for the cloud. As cloud is scalable and connects directly to on-site systems through the internet, cloud backups have several advantages over their tape-based ancestors.

A more everyday use of cloud storage, according to the source, is keeping data that must be accessed from multiple locations. As long as CIOs consider bandwidth needs and the possible drawbacks of latency, placing data in the public cloud is a quick and effective way to make sure the same high-quality data is available in all corners of a widely diffuse organization.

Public and private enterprises with large stores of data can benefit from cloud solutions. According to a recent MeriTalk study of government agencies, 96 percent of federal IT decision makers expect their agency to add more data in the next two years. The average growth projected was 64 percent.

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According to Hankins, the new model of government IT procurement gives an edge to small, agile projects better suited to addressing individual IT needs. The effect of purchasing efficiently is multiplied where cloud systems are concerned. Since cloud applications can be installed quickly, with no new hardware, a fast deployment in the cloud is even faster.

Hawkins stated that the fear of failure has faded from the government IT sector and that decision makers are approving bolder moves than ever before. He said that the cloud has already changed the U.K.'s government and that, in 2012, it may do the same in the U.S.

The private sector appears ready to give the cloud increased attention. A recent Deloitte survey of It priorities for 2012 found the cloud in a rising position, with 40 percent of decision makers placing the cloud and Software-as-a-Service in their top 3 areas of interest. The figure last year was only 29 percent.

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The source conducted research among its readers. Among the survey's respondents, 27 percent work at a company with a private cloud in development. This number reflects the high priority placed on cloud security. Among the same readers, 70 percent placed security in their top three cloud concerns.

The source stated that the economy of scale provided by cloud deployments is the main motivator for a private cloud. The closed nature of the service helps it stay secure while granting its unique benefits. The source stated, however, that companies must be prepared to change the way they manage data, whichever type of cloud they choose.

The private cloud still has some issues with its perception in the IT world. According to Virtualization Review editor Doug Barney, some professionals simply do not know how to define the private cloud. To Barney, it involves scalability security and elasticity.

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"[Cloud technology] facilitates greater levels of collaboration between users, which could be beneficial to multidisciplinary teams, which are very common in our industry, and particularly common when looking to build high-performance buildings as well," said Buildings NY panelist Matt Ostanik, according to the source.

Keeping a team on task and working on strategy from any location were cited as major cloud benefits, according to the source. The panelists spoke about their interest in Sofware-as-a-Service programs, lowering the need for companies to run their own IT hardware and essentially making the firms operable from anywhere.

Writing for Forbes, PricewaterhouseCoopers cloud expert Mike Pearl recently specified how companies derive their value from the cloud. He stated that the cloud would entirely transform the way businesses operate, increasing performance along elastic lines specific to a company's particular market. As cloud capacity can grow slowly, it is always the right size for the company using it.

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"From a policy and procedure perspective, what I think is going to help the most is decreasing budgets," said Microsoft's Susie Adams, according to the source. "I think it's going to be forced on people to have to do this."

The source reported that factors that have thus far kept the cloud from becoming the government's main form of computing include the technology's current unsuitability for deeply classified data. Organizations are also unsure of placing their infrastructure in the cloud, concerned that they can never retrieve it.

A recent Forbes report quantified how much the cloud could save the government. According to the source, federal IT departments estimate that the cloud is saving an annual $5.5 billion. It could be more, however, with the projected goal if adoption continues set at $12 billion in annual savings.

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Hollobaugh stated that the way to deliver these high-performance applications to SMBs is the cloud. He cited recent Microsoft data showing massive spikes of cloud adoption among small companies as proof that some SMBs have tested the waters, and now it is time for others to join.

Among the powerful and scalable "enterprise" systems available to SMBs are cloud archiving and general cloud storage. Through the digital recording of data, even small companies now have access to large, hard-to-store archives. The cloud can represent a safe, scalable storage space place to put it.

Tech consultant Brian Rosenfelt, writing for Smart Business, described the process of deciding whether systems should move into the cloud. In addition to cloud storage, he listed emergency backup systems and email. "Commodity-type" features are the best candidates, in according to Rosenfelt.

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There is trouble with the G-Drive, however, in the Google privacy policy. According to Comms Business, tech industry CTO Simon Bain pointed out that the policy allows Google to modify or distribute files contained on its servers. While consumer users may be willing to work within those constraints, they are unacceptable for most business use.

"Google has followed its competitors in using a clause which shows total disregard for its customers. It is about time that service companies such as Google and Dropbox started to respect their users and not treat them with such a cavalier attitude," said Bain, according to the source.

Storing files in cloud storage is an excellent way for companies to provide anywhere, anytime access to files and increase the size of archives without purchasing hardware. However, the consumer systems on the market are not suited to the task. Fortunately, there are many products designed specifically for the enterprise market.

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Dutt wrote that the cloud is a powerful technology for processes that might have to expand. Its scalability makes it unique, and he specified that low-security workloads that make economic sense on an infinitely-expandable system are a natural fit for the cloud, whether or not the whole business has made the switch.

Dutt specified that the cloud holds a strong allure with companies. He noted a CIO's recent discovery that during the long process to bring new data centers online, impatient employees started using the cloud without approval. Setting up approved cloud storage can be an easier solution.

A recent Computerworld report with IT firm funding stated that the proliferation of odd and creative cloud setups will bring unique security challenges. The source stated that malicious hackers are not the only risk to data – companies should be aware of the legal status of their data depending on where it is hosted and encrypt it at all times.

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Linthicum stated that, to make sure a cloud deployment goes well, the system must be ready for 90 percent productivity directly after deployment. He advocates developing systems before they go live so that the system, whether cloud storage or a business application, can provide benefits to a company immediately.

He also advocated an ongoing enterprise program dedicated to examining prospective cloud solutions. He stated that a cloud plan should be overarching, rather than a "tacked on" piece of a general IT strategy. He warned that few IT departments, as they currently exist, are diving into this type of planning.

Cloud systems vendor Tom Powledge wrote for Network World about the need for CFO involvement in adding the cloud to a business' systems. He stated that the deployment procedure must evolve to involve the CFO at all steps, to determine the cloud's most effective usage cases within a business.

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According to the source, risk lies in the cloud's ability to provide direct links to files. It was sharing files in this way that caused legal trouble for Megaupload. The Megaupload case was so serious that the company's servers have been completely taken down, its users' files in limbo. Using a system that could introduce documents to that type of risk is dangerous for business users.

The consumer applications have been getting mainstream attention. A recent piece in the Chicago Sun-Times ran down the list of Google Drive features and compared the service to the competition, exploring its unique search features and Google connectivity. Despite the consumer attention, the systems' risk could make them inappropriate for an office setting.

There are alternatives to consumer storage. To stop employees depending on free solutions for at-work cloud storage, CIOs can set up dedicated systems with trusted providers. This is important, as stored files may have to comply with stringent legal requirements, depending on the industry in question.

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Pearl stated that businesses are using the cloud to transform their operations. While he cautioned that this requires companies to have strong IT strategies and architecture in place, he found that cloud services can expand a company's process capabilities. Rather than a differently-billed replacement for on-site systems, Pearl sees the cloud as a chance to stretch beyond current IT limitations.

Pearl stated that companies should not see cloud computing as an IT fad and should instead focus on the ways they can change business models. He posited that the cloud can improve engagement for employees and customers.

Gartner, also predicting eager cloud adoption, presented a list of trends expected to affect the technology by 2015. The survey firm stated that companies will begin thinking in cloud-centric terms, taking advantage of the systems' unique capabilities instead of simply migrating functions from the existing hardware. In the case of cloud storage, the cloud's unique, on-demand scalability could help companies.

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"We think the cloud is going to be huge – it already is," Tyler told the source.

The rise of cloud applications such as cloud storage and cloud archiving has potential to change the IT landscape, as companies of all sizes can purchase cloud services on contract. The cloud is widely seen a transformative technology.

According to Computer Business Review, John Abel, head of storage and servers with a major IT firm, is a strong believer that the cloud will be a game-changing technology for "clever" companies, and feared by those that are risk averse and timid. He stated that young employees will soon seek the instant gratification that the cloud presents, and that companies that do not internalize the systems will be undermined.

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Cloud expert David Linthicum of InfoWorld recently stated that cloud storage is inspiring fear among prospective adopters. According to Linthicum, there is a persistent worry that use of cloud storage in regulated industries can lead to legal trouble – or even arrest. He assured users that regulators are aware of the cloud, and that compliance with the rules is quite possible in the cloud.

Linthicum also punctured the myth that vendors can use cloud services to lock businesses into difficult and negative contracts. He countered that cloud infrastructure works largely the same way as traditional systems and that the problem of lock-in is no greater in the cloud than out.

Cloud fear is likely tied to a lack of hard and fast definition. According to the Los Angeles Times, there is still a wide disparity between some popular definitions of the cloud. Clarity could help curb the hysteria.

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Tech researcher Maribel Lopez, writing for InformationWorld, stated that cloud technology is in the process of transforming healthcare. Lopez called the current age of health technology a "renaissance," positing that it was brought on by the gradual aging of current health tech and government subsidies.

Lopez stated that the cloud's power to store medical records, especially in private clouds, allows doctors to make the switch to efficient health records. She also noted that mobile technology has a place in the new age of health IT, a strong match with the cloud.

Tech marketer Geoff Webb, of Healthcare IT News, also believes in the cloud as a healthcare helper. Though he describes the current state of the field as "chaotic," he said that encryption holds promise.

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According to the source, the development of applications is focused on the public cloud. IT managers, even those who initially favored public cloud, have had to bow to the progress that has already been made on software based on public hosting.

An assumption that the source observed in CIOs a year ago – an expectation that the public cloud was an interim state – has been fading. The new strategies that the source has observed include both some public and private cloud features.

InformationWeek outlined the process of adopting a hybrid cloud model, the industry name for placing some systems in a private cloud and using the public cloud for others. The source stated that while most companies begin in the hybrid cloud with a simple division between applications that need security and ones that need scalability. The next step, the source said, is to create a seamlessly blended and integrated environment.

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"The problem that cloud computing has, more generally, is that [the real world] assumes that rights are based geographically," Radcliffe told the source. That assumption is not realistic in the cloud."

Another lawyer, Jeff Folwer, told the Times that the law has not yet caught up to cloud technology. He stated that customers need to be especially careful storing files in the cloud at the moment, and said that fully grasping the cloud situation over the next few years will require "creative thinking."

As opposed to the caution suggested by Fowler, tech CEO Sean McDermott told TechTarget that companies are excited to make the cloud part of their business plans. This is not entirely positive, as Fowler said that the companies are moving so quickly that they are not making detailed plans – a necessity for cloud success.

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"The Obama Administration has made remarkable progress in its efforts to reduce unnecessary IT spending, but we still have more work to do. That's why it's so important that we keep up this momentum and push forward on the Federal government's cloud computing initiative," said Senator Tom Carper.

The main concern regarding the gap between expected and real savings is a persistent problem for cloud adoption – cloud security. In the survey, 85 percent of respondents remained concerned with the security implications of government agencies becoming more cloud-oriented.

Richard Falkenrath of the Chertoff Group told Federal News Radio that Congress can encourage cloud adoption in general by preventing the courts from becoming too involved with cloud decisions. He told the source that the court system is not well-equipped to sort out the inner workings of the cloud.

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In the wake of the Megaupload takedown on media piracy grounds, other file sharing networks have stated repeatedly that they respect copyright law. A recent Hexus report on Rapidshare, however, found that these sites still host a wealth of illegal files. While these files exist, the networks are in constant danger of shutdown – meaning even legitimate data would be lost.

EWeek similarly reported that employees' use of file sharing sites poses problems. The source stated that in addition to Megaupload's precarious legal situation, Dropbox has shown security problems that undermine the credibility of free storage providers.

Palo Alto Networks detected that browser-based file sharing has been used on 92 percent of corporate networks. The use of files sites in the office sector indicates the need to store documents. Companies, however, need to take control of the system and deploy a secure solution.

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"We recognize that each customer will adopt clouds for individual applications, for segments, for geographies and industries. Every customer will be different and every cloud must be able to share information with other clouds" Cisco's Rajesh Rege told the source.

According to the source, Rege's company estimates that the amount of traffic going to cloud systems will grow to 12 times its current size by 2015, for a total of 1.6 zettabytes a year, with each zeattabyte equal to 1 trillion gigabytes.

The adoption process is uneven worldwide. According to a Tata Consulting study, the United States is behind the curve in adding cloud applications. The company found that 19 percent of an average U.S. company's services run in the cloud. This is compared to 28 percent in the Asia/Pacific region and 39 percent in Latin America.

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"The fact that senior decision makers can say that they are saving money as a result of the cloud is a great testament to the potential impact that could be experienced across the wider economy," said Microsoft country manager Paul Rellis, according to Silicon Republic.

While the cloud is a young technology and its benefits still elude decision-makers, it has already contributed to 47 percent of adopters in the Amarach and Microsoft Survey. The systems also functioned as an enabler of small business growth, with 44 percent of cloud-using small companies surveyed, stating that it helped them expand without additional capital.

ITVarNews expounded upon cloud systems' ability to deploy enterprise-level capability while still a small company. Companies with a number of cloud systems can spread their operations over a wide geographic area, adding new employees as needed, scaling technology gradually and never having to make large one-time investments on hardware.

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"Some of the statistics that have been bandied around of 90percent savings – that's not a saving from the cloud, that's a comment on past practices," said UK local government CIO Jos Creese, according to the source. "Behind [the hype] is a genuine opportunity to meet a genuine need to scale up and scale down easily."

Now that cloud systems are better understood, the source stated, their penetration in the U.K. public sector can improve. New regulations are in progress that can make it easier for providers and agencies to reach agreements.

Some cloud hype still remains, according to InfoWorld. The source singled out myths that some IT directors believe when adding new systems. The source stated that companies that take on the cloud to reduce staffing do not realize that the cloud is better for adding capacity and retaining staff, rather than keeping capabilities stagnant and cutting back.

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"The notion of anybody physically owning their data seems like a notion of the past. In fact, you don’t want to take physical ownership of anything. You’d rather it be somewhere else, as long as it's secure and redundant," startup founder Rob Bernshteyn told the source.

The source found that companies are more comfortable in their startup stages with cloud computing. While the building of IT capacity was once a hurdle to competing on a large scale, the cloud model allows firms to build an instant infrastructure and pay for it on a month-to-month basis.

The cloud's central nature to modern companies was recently reflected in the changes to the Microsoft IT pro certification process, according to ZDNet. The system, meant to mark users with a certain level of IT infrastructure proficiency will now be more focused on cloud systems. The source attributed the changes to the differences between cloud systems and traditional IT, such as the lack of delineated software versions.

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