Private Clouds? Business Execs Miss The Point - InformationWeek
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Charles Babcock
Charles Babcock
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Private Clouds? Business Execs Miss The Point

Business executives are more interested in building private clouds than taking advantage of the benefits of public clouds, according to an Avanade survey.

Business executives believe their firms should be investing in cloud technologies, according to a survey released by Avanade, an IT consulting group. But most are thinking in terms of private cloud adoption, a move that stalls or diminishes their returns.

It's a conundrum I've seen before. During a panel at CA World in Las Vegas last year, I was impressed with how the financial services representatives were eager to talk cloud, but they meant "private cloud." I've no objection to the private cloud. In effect, the next phase of the enterprise data center will be to build out its cloud-like properties for internal use.

But focusing on private clouds at the start of your transition to cloud computing would be like the Wright Brothers focusing on the bicycle sprocket when they wanted to get to the airplane. They didn't do that, and maybe your CEO, CIO, and CFO should rethink what they're doing if they believe their IT staffs should be focused on private clouds.

First of all, let's take a look at what the Avanade survey shows. Remember, Avanade is an IT consulting firm established by an alliance of Accenture and Microsoft. If anything, responders to its survey may have some prior commitment to Microsoft technologies or perhaps even Microsoft's Azure cloud. Avanade spokesmen, however, point out that the survey was conducted by a third party, Kelton Research of New York, not themselves, and it surveyed 573 C-level executives, business unit executives, and IT managers in 18 countries.

The first thing that stood out to me was that interest in the cloud is picking up rapidly. They survey found that 74% of enterprises are using some form of cloud services. This represents a 25% growth since Avanade's previous survey on cloud computing 20 months ago, said Larry Beck, senior director of cloud strategy at Avanade, in an interview.

The phrase, "some form of cloud services," could refer to a host of half measures and dilatory server virtualization efforts. That's why the second figure that stood out to me from the survey was the amount of the IT budget reportedly being spent on cloud computing. Fifty-five percent of the respondents said their IT budgets had started to grow again and they were no longer being asked to do more with less. Instead, they were being asked to "do more with more," Beck noted.

As they do so, they have three priorities over the next 12 months: cloud computing is number one, closely followed by stronger security, with IT consolidation a somewhat distant third at this point. The way cloud computing (a top priority to 60%) and security (a top priority to 58%) track each other in the survey makes me think that the parties concerned about one are also concerned with the other. Another place this shows up is in where priorities have changed the most since the 2009 survey: as mentioned earlier, interest in cloud is up 25%; interest in security is up 28%.

Furthermore, elsewhere in the survey nearly 25% of responders reported they've had a security breach in connection with cloud services, and 20% say they have turned off a cloud service and moved back to traditional computing behind the firewall.

Nevertheless, IT spending is tending to follow the larger trend in these responses. IT managers have been told to do more with a bigger budget, and one of the chief ways they intend to do so is through increased use of cloud computing.

Seventy-four percent of the respondents said they have allocated "up to 30% (of the IT budget) to cloud computing." Kelton Research collected basic data from responders on the size of their IT budgets, and found 10% of the companies in the survey are spending $2 million or more on cloud computing a year. That includes retraining their employees and providing them with cloud services, an investment that was ranked at $100 to $499 per user, Beck said in the interview.

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