Cloud Savings No Longer a Hot Ticket, Says New Survey

By | Aug 21, 2012

Midsize admins and executives have heard the siren call of cloud computing time and time again. "Come to the cloud," it says. "We have savings!" For the better part of the last decade this has been the main selling point for clouds, both public and private, even more than their agility or redundancy. But despite the obvious benefits to spending less and getting the same (or more), a new survey has found cloud savings slipping from the number-one spot on a company's list of must-haves, even as the cloud becomes a more ubiquitous and trusted technology.

A New Outlook

Forbes has a recent article detailing the joint Everest Group and Cloud Computing survey of 346 executives, which found that over half (57 percent) of respondents were already using a software-as-a-service (SaaS) solution and 38 percent had already adopted other solutions, such as platform-as-a-service (Paas). In other words, the cloud has matured past being a simple fad technology and is, instead, starting to find its virtual feet. This means that companies are less concerned about cost analysis as feature analysis; they are willing to pay a little more to get what they want.

Cloud savings can stack up over time, but so too do its ongoing costs. Midsize IT admin and their managers need to weigh the larger, up-front investment of in-house technology against the smaller, ongoing costs of cloud computing to determine which one better fits a budget. IT professionals now have enough experience dealing with cloud infrastructure that they want solutions that can help clean up and automate existing systems, though as Mike Hammer has been heard to remark, "automate a mess, get an automated mess." In other words, clouds won't solve problems on their own; it takes skillful management to parlay technical solutions into practical applications.

Public and Private Trends

Take the banking industry as an example—specifically, the Korean banking industry, as discussed in an August 19 Korea Times article. Despite being one of the last bastions of anti-cloud sentiment, many financial institutions are now coming around to the idea of cloud computing because of the functionalilty it offers, not its cost savings. According to the Korea Times pieces, this cloud adoption is taking several forms in different aspects of the Korean banking world.

Private clouds will likely come to dominate what are known as core banking applications, those that are essential for an institution to operate but that companies are reticent to move to a public solution for fear of security breaches. Public clouds, meanwhile, will allow banks to push certain non-critical activities off shore, increase their automation, and—of course—lower costs. In the future, the cloud could also let companies process credit card data, clear checks, or perform high-level analytics on their data.

And that's the key for midsize business IT: looking past the numbers and convincing managers to do the same. The Everest Group and Cloud Connect survey shows that this is already starting to happen as cloud options diversify, but it will be up to frontline IT admins to show how a cloud solution can adapt to a business's needs in addition to how much it can help lower costs.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.

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