Cloud computing has become an overnight sensation in capital markets that has been a decade in the making, according to the authors of a white paper published by Celent.

“I think its title, The Coming of Age in the Capital Markets, says it all,” said Brad Bailey, research director securities & investments at Celent and co-author of the paper.

The capital market’s investment in cloud computing has grown to 7% of the IT budget from 1% over the last five years, according to the authors.

Whether if it’s cost pressures, the advancement of cloud-enabling technology, or the realization of the ease in which you can get things done, Bailey foresees adoption only ramping up.

After polling a segment of the capital markets regarding their adoption of cloud computing, the authors found that 5% of the respondents are using private clouds while a smaller percentage are investing in public and hybrid cloud models, 0.5% and 2.5% respectively.

By 2021, the authors estimated that the use of a hybrid cloud computing model will rise to 17% while private and public cloud use will increase to 5% and 7% respectively.

Arin Ray, an analyst at Celent and co-author of the white paper, attributed the expected growth to the cloud sitting at the center of the critical issues facing the capital markets.

“Firms across the spectrum are looking to outsource everything that is non-competitive and non-differentiating as well as creating utilities, industry councils, and other initiatives,” he said.

However, cloud computing isn’t a panacea for the capital markets, acknowledged Ralph Achkar, director, strategic alliances development & marketing, capital markets at telecom provider Colt and whose firm sponsored the research.

“What surprising for us was the economics of the cloud,” said Achkar, referring to the research. “Whereas most people think moving to the cloud you will recognize economic benefits immediately; the research shows that these economic benefits will be realized over time as you start mutualizing your know how and start connecting to multiple clouds. I think this was something we were not expecting to see.”