The jury maybe out on if going to the cloud is getting cheaper, but a new study found that sticking with on-premise infrastructure will cost you more.
Three in five IT and business decision makers agree that owning and operating in-house IT infrastructure drives costs higher and wastes resources, according to an annual study from Savvis, a global cloud infrastructure and hosted IT solutions vendor.
This view marks a sharp increase from 2010, when just 38 per cent of IT decision makers attributed IT ownership to waste in resources and higher costs, and comes as nearly 60 per cent of respondents now believe organizations must place the priority on outsourced infrastructure over traditional in-house services.
Bill Fathers, president of Savvis, said the study reveals a significant shift in the way organizations analyze and approach IT services. IT departments are now looking to strengthen collaboration, efficiency and competitive agility – and they’re turning to secure, outsourced environments and cloud computing to help meet their objectives.
Savvis commissioned international research firm Vanson Bourne to conduct the survey among 550 IT and business decision makers in the United States, the United Kingdom, Germany, Japan, Hong Kong and Singapore. Savvis interviewed IT decision makers from these countries to offer global insight from key industries, including finance, media and entertainment, retail, healthcare, software and automotive, on trends in IT outsourcing (ITO), adoption of cloud solutions and the costs of owning infrastructure.
The report shows growing interest in outsourced infrastructure and cloud computing as means for freeing up budgets, fostering collaboration and operational efficiencies, and building competitive advantage.
There are six key takeaways from the 2012 annual report:
1. Globally, organizations are now outsourcing just over 25 per cent of their IT infrastructure. In five years, organizations expect to expand outsourcing to more than 40 per cent of their IT services.
2. More than half of all organizations admit to having IT equipment they now regret purchasing. The attitude is highest among U.S. respondents (66 per cent), compared to 34 per cent of respondents in Hong Kong and Singapore.
3. 56 per cent of surveyed IT executives keep most of their infrastructure in-house, with the practice more prevalent in Japan where 78 per cent of respondents indicated reliance on in-house services.
4. Forty-two per cent of organizations that do not currently outsource all of their IT are most likely to name contractual obligations as the main reason for not outsourcing, indicating a major shift in thinking. In 2010 and 2011, company culture was the most common inhibitor.
5. Momentum for cloud computing continues, as 85 per cent of organizations today use private and public cloud for storage, big-data analytics and other applications. In 2010, just 39 per cent of respondents said that their organizations were using cloud computing.
6. The need for increased agility is leading half or more of the decision makers in the United States, Japan and the United Kingdom to boost the amount of infrastructure they outsource.
Fathers added that he continues to see changing views on why organizations make the move to outsourced managed services. “As the business focus moves from IT budgets to enriching core competencies, we expect strategic ITO solutions to move to the forefront of decision-maker priorities.”