Updated: Cloud Spending Speeds Up

The 451 Group reports that cloud spending has helped drive the overall increase in IT spending

Information Management Online, June 14, 2010

June 14, 2010 - Cloud computing is set to grow across public, private, hybrid and community/partner deployments, according to new research from The 451 Group.

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More than one-third of 120 users surveyed will increase spending by more than 20 percent next year. Cloud spending has helped drive the overall increase in IT spending, and The 451 Group predicts it will have an even more substantial effect going forward.

More than half of users surveyed report that they are piloting projects to experiment with and test clouds. Nearly 40 percent of users are employing clouds for noncritical applications, and a little less than one-third are using clouds for critical applications. Test and development and Web application hosting remain the key workloads being run on clouds; workplace environments and recovery on-demand are next.

While economic advantages still drive customers to clouds, The 451 Group finds that clouds are about flexibility more than cost. Operational benefits such as quicker time to market and capital expenditure savings are the next sets of adoption drivers. Workload priorities are grouped in the following order of importance: Web applications and test and development, collaboration and disaster recovery on-demand.

Cloud delivery and consumptions models offer dynamic pricing and scalability, says Dan Kusnetzky, VP Research Operations, The 451 Group. "As with other forms of computing, an organization must have a clear understanding of their requirements before embarking on the journey to use cloud computing as part of its overall IT plan. Although the industry is the the middle of an active cloud computing hype cycle at the moment, it clearly isn't the panacea some suppliers are describing," he says.

The 451 Group notes that small to midsized organizations as well as local and regional governments rapidly adopt a cloud approach due to extreme needs to cut IT costs. "Large organizations are holding back and waiting for better security; standards to emerge for management and development; and simpler, easy to understand pricing models," says Kusnetzky.

Cloud computing is a delivery and consumption model that offers the promise of a dynamic pricing and scalability. As with other forms of computing, an organization must have a clear understanding of their requirements before embarking on the journey to use cloud computing as part of its overall IT plan. Although the industry is the the middle of an active cloud computing hype cycle at the moment, it clearly isn't the panacea some suppliers are describing. The 451 Group is seeing small to medium size organizations as well as local and regional governments rapidly adopting this approach because their extreme need to cut their IT costs. Large organizations are holding back and waiting for better security; standards to emerge for management and development; and simpler, easy to understand pricing models.

You can visit the451group.com to purchase the report, “IT is Cloud – To Infrastructure and Beyond.”

Valerie Valentine is senior editor for Information Management.

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