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Cloud Still a C-Suite Decision

May 9, 2011
By

CIOUpdate Contributor






Cloud has been at the forefront of every IT discussion in 2011 and will continue to be due to the potential system optimization and cost savings that are associated with it. However, industry-wide motivation and business impact behind cloud implementation remains unclear.

To better understand the top end-user business requirements for cloud computing and determine how companies are measuring ROI, The Open Group surveyed cloud specialists at global organizations ranging in size from fewer than 200 to more than 5,000 employees. The survey was carried out online between February and March, 2011. The Open Group today announced the results of its inaugural Cloud Computing Survey. The study, which surveyed 307 IT professionals with purchasing or decision making influence related to cloud computing, examines the business impact of cloud computing on organizations.

“The ability to transform business is the most exciting feature of the cloud phenomenon,” said Chris Harding, SOA Work Group and Cloud Work Group forum director at The Open Group, in a statement. “The survey shows that users recognize that cloud computing will impact their business processes, but that they are not yet prepared to handle that impact or, in many cases, even to measure it.”


The survey identified the following key findings:

C-level executives control cloud buying decisions - Over half of buying decisions required CEO and CIO level approval; 23 percent and 32 percent, respectively. IT directors accounted for 22 percent, while enterprise architects held just seven percent of buying power.

The main drivers behind cloud usage include cost, resource optimization and timeliness, and agility of new services - Cost was the biggest reason behind cloud implementation, with 21 percent of participants citing this option. Timeliness and agility of new services and resource optimization rounded out the most popular responses with 19 percent and 17 percent respectively.

ROI remains difficult to measure, but a majority of organizations do not have ROI mechanisms in place - When asked if cloud ROI would be easy to evaluate and justify, 55 percent of participants responded that it would be easy to justify, while 45 percent stated that it would be difficult. However, only 35 percent of participants admitted to having ROI mechanisms in place.

"That could be a negative impact on cloud take up, although, I suspect, it's not going to prevent people from using cloud; they will just not be using it as efficiently as they could be," added Harding.

Cost and quality of delivered result are the most useful ROI measurements - Organizations want to be able to measure cost savings and how effective cloud was at delivering a specified result at 29 percent and 21 percent respectively.

Cloud will significantly impact at least one business process, yet organizations are not prepared for these changes - Most participants expect cloud to significantly impact one or more business processes, but only 28 percent are prepared for these changes. "Cloud is much more than a machine replacement," said Harding, surprised by the response. "It has the potential to impact on the way people do business."

Data security is the biggest concern surrounding cloud - Security in the cloud remains the biggest concern for organizations as they implement private, public and hybrid cloud solutions at 18 percent. Integration issues and governance were also major concerns at 15 and 14 percent, respectively.

"In all, it's not a detailed survey ... and it's probably not something where you can do a detailed analysis and get massive detail at a low level, but, overall, it does give clear picture about how people ... are thinking about cloud computing," Harding concluded.

This survey builds on the ongoing work being orchestrated by The Open Group’s cloud Work Group, and the results will help guide its future development on the financial and business impact of cloud computing. If you are interested in getting involved with the cloud Work Group, please visit: http://www.opengroup.org/cloudcomputing. For cloud computing resources published by the Work Group, please visit: http://www.opengroup.org/cloud/whitepapers.


Tags: Cloud, IT architecture, Open Group, IT value, IT/Business Alignment,
 

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