Cloud Computing and Software-as-a-Service

A recent survey conducted by Gartner reports that companies spend approximately 10 percent of their budget for external IT services on cloud computing research, migrations and implementations.

Gartner conducted the survey from April to July 2010, surveying CIOs across 40 countries, discovering that nearly 40% of respondents allocated IT budget to cloud computing. Almost 45% of the CIOs and other senior IT decision makers questioned about general IT spending trends provided answers pertaining to cloud computing and its increased adoption rates.

Among the questions asked were how organizations’ budgets for cloud computing were distributed. Detailing the results, a Research Director at Gartner noted that, “One-third of the spending on cloud computing is a continuation from the previous budget year, a further third is incremental spending that is new to the budget, and 14 percent is spending that was diverted from a different budget category in the previous year.”

Organizations polled in Europe, Asia, the Middle East, Africa and North America spent between 40 and 50 percent of their cloud budget on cloud services from external providers. The survey also discovered that almost half of respondents with a cloud computing budget planned to ramp up the use of cloud services from external platform providers.

According to Gartner analysts, the survey results demonstrated a “shift towards the ‘utility’ approach for non-core services, and increased investment in core functionality, often closely aligned with competitive differentiation.”

Additionally, more than 40% of respondents anticipated an increase in spending in private cloud implementations designed for internal or restricted use of the enterprise, compared to a third of those polled seeking to implement public clouds.

Gartner called the investment trends for cloud computing as “healthy” as a whole. Said Gartner, “This is yet another trend that indicates a shift in spending from traditional IT assets such as the data-center assets and a move towards assets that are accessed in the cloud. It is bad news for technology providers and IT service firms that are not investing and gearing up to deliver these new services seeing an increased demand by buyers.”

Discussing the findings, Chad Collins, CEO of Nubifer Cloud Computing said, “This survey supports what we are seeing at ground zero when working with our enterprise clients. Company executives are asking themselves why they should continue with business as usual, doling out up-front cap/ex investments while supporting all the risks associated with large scale IT implementations.” Collins elaborates, “Cloud platforms allow these organizations to eliminate risks and upfront investments while gaining greater interoperability and scalability features.”

Collins went on to add, “Forward thinking organizations realize that by using external providers and cloud computing models, they can gain more flexibility in their cost and management of thier application base, while also getting the elasticity and scalability needed for growth.”

To learn more about adopting a cloud platform and how your organization can realize the benefits of cloud computing technologies, contact a Nubifer representative today.