Senior executives around the globe say their organizations have already moved at least some business activities to the cloud, with some companies planning to spend more than a fifth of their IT budget on cloud software and services in 2012, according to a report by KPMG International. 

KPMG found that economic factors were cited by 76 percent of the companies surveyed as their reason for cloud adoption; however, a number of other considerations were equally or more important. Specifically, 80 percent said the switch to the cloud was driven by efforts to improve processes, and 76 percent said the use of the cloud would have strategic benefits.

The research also found that 81 percent of participants said they were either evaluating cloud applications, planned a cloud implementation, or had already adopted a cloud strategy and timeline for their organization, with almost one-quarter of them saying their organization already runs all of its core IT services on the cloud or is in transition to do so. However, nearly one in 10 executives surveyed said their company has no immediate plans to enter the cloud environment.

“Cloud adoption is quickly shifting from a competitive advantage to an operational necessity, enabling innovation that can create new business models and opportunities,” said Steve Hill, U.S. vice chairman of strategic investments at KPMG.  “As this rapid adoption curve continues to gain momentum amid a struggling economy, it is important for corporate leadership, directors and boards to be informed and engaged in strategic discussions about cloud’s impact on their long-term growth opportunities and competitiveness.”

The survey also found that approximately 45 percent of the respondents had not evaluated the tax implications of cloud computing or don’t know if these factors are being evaluated.

“Ignoring tax issues has never changed the responsibility of the payer, which makes taxation a critical issue for those wishing to evaluate all implications of the cloud environment,” said Hill.

Additional survey findings revealed that 75 percent of total respondents globally said they need to show a cost savings to justify a move into the cloud.

The KPMG survey was conducted in 15 countries from February to April 2011, and canvassed 806 senior executives—nearly 50 percent of them from the C-level—in companies that use or plan to use the cloud, as well as 123 executives from cloud service providers.

 

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