Funny thing about the never-ending discussions of cloud, virtualization, and containers out here in pundit-land… Most writers blithely ignore the one truth that all of us need to be reminded of on occasion.

Your cloud is built on hardware.

Yes indeed, I did say that out loud. Talk about fifteen layers of server/network virtualization all you like, SDX your way into the 22nd century, but never forget that someone somewhere is racking and stacking to make it happen.

Why does that matter? Well for a lot of reasons, though they can be broken into the usual categories – public and private. On-premises and off.
Virtualization, cloud, and containers share one simple premise – make it easier for folks to get machines that do what they need, when they need it. Which is cool, but easier (and/or cheaper) always results in more. And more means that underlying hardware has to grow. It also means the complexity of the infrastructure grows.

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A report from enterprise mobile collaboration provider harmon.ie argues Microsoft is making progress in moving its customers’ productivity software to the mobile cloud, yet on premise remains important.

The company, which offers a tool which puts all Microsoft productivity tools within a single screen, notes Microsoft has a stronghold on productivity suites. 97% of respondents polled said they expect their clients’ use of Office 365 to increase in the coming 12 months, with harmon.ie reporting, “Office 365 is the company’s fastest growing commercial product and it shows no signs of slowing down.”

Not surprisingly, cost savings (68%) were cited as the primary driver for moving to the cloud. However, while companies are happy to make their email cloud-based, they are unwilling to move beyond individual productivity tools into a more comprehensive, integrated cloud collaboration environment.

In previous reports the company had argued Microsoft was the “undisputed” leader in enterprise collaboration, but is rarely used as an all-in-one solution. The latest research figures back this up; only 12% of respondents use Lync – or, rather, Skype for Business – frequently, and a pitiful 3% only use enterprise social network Yammer on a regular basis.

One of the bigger barriers to cloud adoption is SharePoint; the collaboration tool is important to companies, but predominantly not in the cloud, with 72% admitting they use it either on premise or hybrid. Almost half (47%) of respondents called out hybrid integration services as an area of potential revenue growth.

This hybrid play is one harmon.ie imagines will be continuing for the near future at least, despite the general trend of companies becoming more acquainted with the mobile cloud. “We are at a tipping point as an industry,” said harmon.ie CEO Yaacov Cohen in a statement. “There is no doubt that businesses are moving to Microsoft Office 365, but on premises is certainly not going away.”

He added: “Although the mobile-first, cloud-first era is still in its infancy, now is the time for partners to craft services and solutions to ease their customers’ migration concerns while driving immediate business agility and CAPEX savings.”

You can read the full report here (email required).