Cloud Computing takes over from outsourcing as default cost cutting option?

Cloud Computing could hold the key to economic recovery and counter the ravages of the global economic downturn.

 

That was the conclusion of some 68% of decision makers at organisations in the UK, US and Singapore who were polled by research firm Vanson Bourne on behalf of Cloud infrastructure firm Savvis.

 

With doing more with less budget cited as the main concern of 54% of respondents, Cloud Computing's ability to deliver cost cuts is highly appealing. Both public sector and commercial sector respondents predicted Cloud use can decrease IT spend by an average of 15%, with some enthusiasts expecting savings of more than 40%.

 

The report noted: “Generally, businesses are still feeling the effects of the recession, with budgetary constraints and cost- saving prevalent; however, this is being met by an understanding that external cost-saving solutions do exist and such services must deliver the increased return on investment that is being demanded by organisations.”

 

The study brought out three main agenda items for organisations: more cost-effective IT solutions (48%); focusing IT resources on developing business-critical applications (43%) ; and examining collaboration as a method to gain operational efficiencies (32%). Overall there's a pursuit of agile IT service delivery models that don't increase costs.

 

“Last year was a challenging year as the economic recession took hold and IT leaders were forced to tighten-up their belts and rise to the challenge of delivering 'more for less',” noted Bryan Doerr, CTO at Savvis. “Although it was a year of IT infrastructure consolidation and cost reduction initiatives, it was also an opportunistic time where organisations sought to adopt new technologies in an effort to become more efficient. One of my key takeaways from 2009 was that the economic downturn motivated IT departments to challenge the status quo and explore ways to improve operational efficiencies.”

 

A lack of access to IT capacity is clearly identified as a barrier to business progress, with 76% of business decision makers reporting they have been prevented from developing or piloting projects due to the cost or constraints within IT. For 55% of respondents, this remains an issue.

 

While in the past, organisations might have turned to conventional outsourcing to meet such immediate needs, now there is a trend towards Cloud Computing instead. The report observes: “Recent economic times have demanded a drastic trimming of corporate IT budgets. With companies focusing on driving a competitive advantage, the need to deliver technology solutions that are robust, reliable, flexible and ubiquitous is of paramount importance to IT leaders this year. Key areas of IT infrastructure will be outsourced, but the respondent companies now recognise that one technology solution can potentially deliver all of this without drastically increasing costs. Cloud Computing.”

 

Additional highlights of the report include the following:

The research surveyed 450 CIOs, IT Directors and Heads of IT in the UK, US and Singapore from medium to large private sector enterprises and public sector organisations.