January 27, 2011 – The existing cloud is underused, according to a new study on private and public cloud use and adoption by Osterman Research with Electric Cloud, a private development cloud company.

The survey of 100 senior-level IT professionals, including CIOs, directors and VPs, revealed that despite widespread adoption of cloud computing, many organizations are not fully leveraging the cloud infrastructure they have implemented. Of the companies using private or public cloud computing, 52 percent have cloud infrastructure resources that are rarely or never used and 47 percent report some or lots of excess capacity.

Forty-eight percent of organizations report using or are planning to use private cloud computing. One in five organizations (20 percent) are currently using public cloud computing, and another 34 percent are investigating with the intent to implement a public cloud, according to this survey.

Among organizations that have implemented cloud computing, spending on cloud-based infrastructure averaged $6,335, or $23.31 per employee, in 2010. That spend is expected to rise to $6,920, or $26.63 per employee, in 2011.

Average ROI for cloud infrastructure was reported at 46 percent; however, 57 percent of respondents either did not know or could not quantify their ROI on cloud computing.

Among companies that use a private cloud, 86 percent of respondents said having more visibility into the development team's resource utilization would be somewhat to extremely desirable. When asked about the barriers to using the private cloud, 50 percent of respondents reported they feel the need to manage their own processes and environment.

"Our research finds that many IT managers are very concerned about, and resistant to, the cloud in a number of areas, most notably the cost of cloud-based services relative to on-premise systems, the security of data when held by a cloud provider, and the flexibility of cloud services,” said Michael Osterman, founder of Osterman Research. “These concerns are unfounded.”

Osterman explains, “Cloud services are typically less expensive per user than on-premise services, largely because the labor costs associated with on-premise systems – typically 40 to 70 percent of the total cost – is almost entirely eliminated when cloud services are used.”

Regarding security and flexibility, Osterman says, “Cloud providers are probably more secure than most on-premise systems and about as flexible in terms of provisioning, new service additions and services changes.”

Osterman advises a dual approach. “The cloud and on-premise are not necessarily mutually exclusive – decision-makers should consider using hybrid approaches that will incorporate the best of both worlds, such as on-premise for a corporate headquarters and cloud for remote offices that do not have dedicated IT staff available,” he says.

Complete survey findings can be found at Osterman's website.

Read Information Management’s recent cloud coverage here.

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