Cloud Computing Yields Perceived Benefits, But Might Not Save Much Money, Global Survey Finds

About 82 percent of 3,645  cloud computing users surveyed by TNS in eight countries say they saved money on their most recent cloud project. But savings have been relatively small, with
35 percent of U.S. organizations, for example, reporting payback of less than $20,000. Cloud computing ROI

The issue is not whether respondents believe they have seen improvements. The survey indicates that nearly all organizations boost improvements in IT performance following cloud adoption, with 93 percent of all organizations reporting at least one area of IT improvement.

Among the most common improvements, 52 percent of users report increased data center efficiency and utilization, while 47 percent witness lower operating costs post cloud adoption.

And these benefits arrive quickly as 48 percent of organizations see benefits within six months. Overall, more than 80 percent of respondents see gains within six months.

Some 23 percent of all U.S. organizations and 45 percent of U.S. organizations with fewer than 50 employees report no savings, says CSC, which funded the study.

Some 88 percent of Australian organizations see improvement in their IT departments since adoption of cloud, and 82 percent see benefits in six months. However, the cost savings of cloud are not as high as expected. Some 64 percent of organizations say they save under $20,000 or nothing at all after their last cloud adoption project. In particular, cloud computing is not helping Australian small businesses save money, as 95 percent save less than $20,000 or nothing at all. In fact, 48 percent of small businesses say they saved no money.

Eighty-two percent of UK organizations see benefits from the cloud in under six months; 38 percent see benefits immediately. Almost half (49 percent) cite increased data center efficiency and utilization as the number one benefit from adopting cloud.

However, 63 percent of small businesses say their total cost of delivering enterprise services stayed the same after implementing cloud services.

Some 90 percent of U.S. respondents said their organizations experienced IT improvement post cloud. However, cost savings were not as extensively realized. In fact, nearly a quarter of U.S. organizations don’t find any cloud savings.

For the purposes of this survey, cloud computing was defined as “a general term for anything that involves delivering hosted services over the Internet.” The survey further specified five essential characteristics, including that cloud computing was an on-demand self-service with broad network access; involved  resource pooling, rapid elasticity and measured service.

Interviews were conducted between October 2011 and November 2011. Organizations in the United States, the United Kingdom, France, Germany, Brazil, Australia, Japan and Singapore were part of the survey.

None of those results should be surprising. We are early in the process of cloud computing adoption. Some would argue significant changes take time to show clear productivity gains because it takes time for human beings to adapt, and for entire processes to be redesigned around the new technology.

Gartner Says Cloud Banking Can Drive 'Creative Destruction' in the Banking Industry

A rapid shift in attitude towards cloud banking is happening within the financial services industry, according to Gartner. 


A Gartner survey found that cloud is the top priority for global financial services CIOs and that 39 percent of those surveyed expect that more than half of all their transactions will be supported via cloud infrastructure and software as a service (SaaS) by 2015.


In Europe, the Middle East and Africa (EMEA), 44 percent of FS CIOs expect that more than half of all their institutions' transactions will be supported via cloud infrastructure by 2015 and 33 percent of them expect that the majority of transactions will be processed via SaaS by 2015. Gartner Says Cloud Banking Can Drive 'Creative Destruction' in the Banking Industry:


“Early cloud adoption, especially in the FS sectors, may have been limited to non-core areas and proofs of concept, but it is set to go mainstream, moving the heart of the business, transaction origination and processing, into the cloud,” said Peter Redshaw, managing vice president at Gartner. “Cloud banking should be innovative, dedicated to this industry and transformative.”



As with most cloud initiatives, cloud banking might be disruptive. It can provide the ability for attackers or defenders to try completely new services and processes, such as reverse auctions and third-party core banking systems, for example. 


Successful new cloud services can displace the existing and dominant process for design, distribution or transacting in a disruptive way, rather than just incrementally improving them, says Redshaw. 

As banks progressively replace people in the value chain with algorithmic operations (AOs) to run processes and make decisions, their intellectual property increasingly resides in these algorithms. The value of people is not in running operations but in improving the AOs, Redshaw argues. 


At a more prosaic level, cloud banking should lessen investment in bank data centers. Data center investments affected

IaaS Will Count for a Third of IT Resources in 2014

About 77 percent of enterprises respondents surveyed by PwC have a plan to adopt some form of cloud computing, and 64 percent said some type of cloud, including private and public, would be the best way to manage IT infrastructure in three years.


Precisely what that means for would-be providers is not quite so clear, though. 


PwC surveyed 489 business executives in an effort to understand the real state of data center management, and the results suggest both increases in traditional data center operations, "private" cloud operations and some increase in public cloud activities. But there will be a huge decline in use of traditional data center services managed by service providers. 


Traditional IT outsourcing service providers are about to see their business models and customer value propositions disrupted. 


But the essence of cloud computing is a move towards highly standardized racks of commodity servers and a software environment that together make for a highly efficient use of resources. Who needs to outsource to a third party when such capabilities are available?

"We have seen major technology shifts in the data center in the past," says David Stuckey, PwC's US leader of its data center infrastructure practice. "These shifts in reality have just added to the mix in the data center, increasing complexity and cost."

Cloud computing, when done right, has the potential to actually replace, and not just augment, legacy environments while adding value by reducing costs and increasing agility," says Stuckey. 

Private cloud is infrastructure operated solely for a single organization, whether managed internally or by a third-party and hosted internally or externally.^[43]

They have attracted criticism because users "still have to buy, build, and manage them" and thus do not benefit from lower up-front capital costs and less hands-on management,^[44] essentially "[lacking] the economic model that makes cloud computing such an intriguing concept".

IaaS Will Count for a Third of IT Resources in 2014