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Cloud computing advantages accelerated in 2014

Companies discovered new cloud computing advantages in 2014, but analysts say there is still plenty of room for growth.

The cloud, mobile and analytics were the major technology trends having an impact on software for financials and...

human resources in 2014.

Cloud computing advantages have been a focus for at least five years, but in 2014, more and more companies stopped using software on-premises and shifted to software as a service (SaaS).

Companies discovered cloud computing advantages in managing and improving business processes, customer relations and employees.

Paul Hamerman, vice president and principal analyst at Forrester Research, based in Cambridge, Mass., said he is seeing a pickup in adoption of software categories that had been laggards in the past.

"For example, finance systems are starting to gain some momentum now, whereas they had been lagging a bit behind," Hamerman said. "CRM systems and HR systems and procurement systems -- we are seeing those areas pick up. We are seeing ERP pick up. A lot of industry-specific areas are moving to the cloud."

While cloud use grew, Hamerman said the cloud is not for everybody, which means there is still plenty of room for growth. "The adoption levels are still relatively low in that the majority of the software still in place today is the traditional licensed applications," Hamerman said. "It's going to take some time before the majority of it migrates to the cloud."

Hamerman said the largest SaaS acquisition he has seen to date occurred in 2014. That deal closed in early December after SAP, the German maker of business software, announced in September that it would buy Concur Technologies, a vendor of cloud travel and expense management software, in a transaction valued at $8.3 billion.

Another giant, Oracle, heralded its advances in the cloud. Founder Larry Ellison emphasized the company's growth in cloud business when he helped unveil the company's fiscal second quarter earnings in early December.

A growing number of companies bought cloud-based software for budgeting, financial planning and forecasting. Business leaders increasingly phased out Excel and turned to cloud software from companies such as Anaplan, Adaptive Insights, Host Analytics and Tidemark.

Cloud computing advantages for analytics

Other users gravitated to cloud analytics.

SAP and New York-based Infor both unveiled in-memory financial suites designed to be more unified, user-friendly and accessible from mobile devices. Meanwhile, SAP's HANA in-memory platform for processing high volumes of data in real time continued to gain traction.

Russell Rothstein, station master and CEO of IT Central Station, a product review site for enterprise software, said cloud adoption continued to accelerate in 2014.

"Over 90% of our community members that are in the buying process for enterprise software are evaluating SaaS-based solutions to replace existing on-premises applications," Rothstein wrote in an email. (He said SearchFinancialApplications' parent company, TechTarget Inc., made an investment in IT Central Station and is a strategic partner.)

Security remains a major issue with the cloud and could be one worry of those seeking cloud computing advantages. Rothstein said information privacy is the No. 1 concern members have about moving to cloud-based applications.

Traditional platforms such as Microsoft's SharePoint collaboration software faced criticisms.

"Presently, over 80% of Fortune 100 companies use SharePoint, often as the basis for the enterprise intranet," Rothstein wrote. "However, we see increasing criticisms regarding its high cost and flexibility, especially given the growth of new SaaS-based alternatives."

In human resources, predictive analytics and mobile were big trends.

For example, Workday, based in Pleasanton, Calif., introduced new software designed to predict the odds of highly skilled employees leaving a company and whether a promotion might help retain them.

Workday also scored with a mobile platform that allowed employees to manage their benefits or perform certain tasks while outside the office. The city of Orlando, for example, went live in 2014 with Workday financial and human capital management, including a mobile service that allows employees to complete forms for direct deposits or tax withholding without visiting the payroll office.

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