“Cloud or Fog?” report from NTT Europe Online finds while cloud computing is not high priority, demand remains strong for online software and service delivery among UK enterprises. Released today (June 5), it says 67% of CIOs and CFOs are either not planning to adopt cloud computing (35%) or are unsure (32%) of whether their company will adopt it during the next two years.
At a time when leading tech vendors are taking significant strides in the cloud computing market, this report may prove to be a dampener. Companies such as Verizon, AT&T, EDS, Microsoft, IBM, Google, and others are offering various cloud-based solutions to enterprises.
In January, My Techbox Online had predicted that a few big players like IBM, Microsoft, and Google will keep experimenting with their cloud offerings with a few big user organizations. (Read: Future of 10 Global Tech Markets in 2009)
NTT’s ‘Cloud or Fog?’ report, which polled 200 CIOs and CFOs at large UK businesses, found that decision makers placed cloud computing at the bottom of their top ten strategic investment priorities for the next 12 months. Many were still grappling with the concept – 46% of respondents felt definitions of cloud computing remained unclear.
Despite this, 60% said their organisation was more likely to invest in software and services delivered online as a result of the recession. And 85% of CIOs and CFOs are looking for more flexibility in their software licensing agreements and 68% said they will avoid long term IT contracts – benefits widely acknowledged to be delivered by the cloud computing model.
“Decision makers at large UK companies clearly see the benefits of investing in online delivery of software and services however many are unconvinced about taking the plunge with a cloud computing model in the next two years,” said Rob Steggles, marketing director Europe at NTT Europe Online.
The report points out that 77% of respondents said their organisation was not using cloud computing, citing security, concept immaturity, and uncertain reliability as the primary reasons for not adopting it. To consider a move to a cloud computing model, 40% of CIOs and CFOs would demand between 10–20% cost savings to justify the investment.
Also, 45% said they believed cloud computing was not just hype, and 44% of those businesses using or planning to use cloud computing said they expected to invest between 6–15% of their IT budgets on cloud computing in the next two years.
For those using or considering investing in a cloud computing model, the systems most preferred to place in the cloud were content management systems, sales/CRM applications, and those applications deemed ‘non-business critical’. However, many cloud computing adopters felt financial and accounting systems should never be put into the cloud (55%).
Undertaken by market research company, Vanson Bourne, NTT Europe Online’s Cloud or Fog? report was based on research with 200 Chief Information Officers (CIOs) and Chief Financial Officers (CFOs) from large UK organisations across multiple sectors with over 500 UK employees and turnover ranging from GBP100m to GBP69bn. While individuals who took part in the research were based in the UK, the majority of the companies involved have international / global footprints, says NTT.
NTT Europe Online is part of NTT Communications, which is the global data and IP services arm of Nippon Telegraph & Telephone Corporation (NTT).