Monday, May 9, 2011

Open Group cloud survey shows a lack of IT preparedness, especially on measuring cloud's true costs and benefits

While more than 90 percent of companies are using -- or plan to use -- cloud computing, the cloud model is raising some concerns, as well as some paradoxes.

Unsurprisingly, security is the leading concern, while integration and governance issues are close behind. The paradox arises because industry executives know that cloud computing will impact their business, but are not yet prepared to handle that impact and, in many cases, don't yet know how to measure it.

These are some of the results from a recent survey by The Open Group, which polled 307 IT professionals who had purchasing or decision-making influence over cloud computing. The study earlier this year found that cloud computing required C-level approval at 55 percent of the companies, while 22 percent left it to IT directors and 8 percent to enterprise architects. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]

Among the take-aways from the results: "You need to take the metrics and find out what your IT finances are to make a true business decision about cloud," said Dr. Chris Harding, Forum Director for The Open Group Cloud Computing Work Group. "And you need to track that as your move forward."

Among other findings from the survey:
  • An impressive 92 percent of respondents said they are either currently using some cloud (49 percent) or had it on their IT road map (43 percent). The remaining 8 percent said they had no cloud plans.

  • Only 17 percent of those polled said they use or would use public cloud, while the remainder were divided between private (29 percent) and hybrid (45 percent). Another 9 percent were unsure what they would use.

    The paradox arises because industry executives know that cloud computing will impact their business, but are not yet prepared to handle that impact and, in many cases, don't know how to measure it.



  • The main drivers behind cloud adoption were cost (21 percent), timeliness and agility (19 percent), and resource optimization (17 percent).

  • Data security is the biggest concern for companies (18 percent), followed by integration issues (15 percent), and governance (14 percent).

  • A majority of participants (55 percent) said that cloud return on investment (ROI) would be easy to justify. However, only 35 percent of respondents said they had mechanisms in place to effectively measure ROI.

  • An overwhelming 82 percent said they expected cloud to significantly impact one or more business processes, but only 28 percent are actually prepared for these changes.

  • When asked if they were satisfied with cloud education and training available, 51 percent percent said they were satisfied or very satisfied, 34 percent said they were somewhat satisfied, and 15 percent said they were dissatisfied.
This survey builds on the ongoing work being orchestrated by The Open Group Cloud Computing Work Group, and the results will help guide its future development on the financial and business impact of cloud computing.

The results indicate that these enterprise architects and planners are primarily focused on private and hybrid computing, and not so much on so-called public cloud options, said Harding. The respondents expect that cloud will impact their business processes, but are not sure how.

Enterprises should start right away with measurement of shared services use and costs, said Harding. That will allow for any move to cloud with assurances that risks and rewards can be managed. Only by learning the internal costs can the right decision be made as to how external services affect the balance, he said.

If you are interested in getting involved with The Open Group Cloud Computing Work Group, visit http://www.opengroup.org/cloudcomputing/. For Cloud Computing resources published by The Open Group, visit: http://www.opengroup.org/cloud/whitepapers/.

Due out in mid-2011, The Open Group currently writing a book tentatively titled Cloud Computing for Business: The Open Group Guide, which will demonstrate a model for measuring costs, and for how to begin managing governance around costs and service-level agreements, said Harding.

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