Cloud Computing Profit Requires Trust Of Technology

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Adopting cloud computing doesn't necessarily improve the bottom line. But cloud computing promotes greater profitability when corporate leaders trust the technology, according to a Google-sponsored report (PDF) from the Economist Intelligence Unit (EIU).

In April, the EIU surveyed 452 senior executives across 10 countries about how their organizations used cloud computing and how they saw cloud technology in terms of security, privacy, reliability, accessibility, scalability, support, cost, and agility.

The survey found that, while 99% of organizations have adopted some level of cloud computing for their IT operations, only 35% of respondents say they have a "very high" level of trust in the technology.

Those reporting high levels of cloud trust also reported an average rise in profits of more than 9% over the past year, compared to 1% among those reporting low levels of trust in the cloud.

In a June 29 blog post, Julien Blanchez, group marketing manager for security and privacy in Google's enterprise group, says the results "show a clear link between an organization’s profitability and [its] trust in the cloud, suggesting cloud adoption alone is not enough to guarantee a positive business impact."

The results are not particularly surprising given that lack of trust in cloud computing represents an obvious barrier to adoption of the technology. When company personnel don't use the cloud technology made available to them, they're not going to see potential benefits.

But there's more to it than that, since utilization of cloud technology alone doesn't assure increased profitability. As the report suggests, trust in cloud computing has some correlation with out-of-the-box thinking -- with a willingness to adopt new processes and business practices.

Enthusiastic cloud adoption can thus be seen as a proxy for willingness to innovate. As might be expected, such operational boldness has a greater chance for business benefits than fear of change.

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"If you trust your tools, you basically use them to the full extent of their capabilities and do things you may not have dared to do," explained Blanchez in a phone interview.

Blanchez said Google backed the study for two reasons.

First, he said, while there's been a lot of research on the potential cost-savings from cloud computing, there has been "no real attention to overall economic performance beyond cost reduction." In addition, he said, while there's plenty of research on the impact of trust at macro-economic levels, which affects states and nations, "We wanted to test if this assumption is true at micro-economic levels, within organizations."

The survey findings underscore that organizations adopting cloud computing need executive commitment to organizational improvement.

"Do not just go to the cloud for cost reductions, or to move from one licensing model to another," said Blanchez. "Go to the cloud with an eye on transformation."