Hidden costs and increased complexity in Irish cloud experience
30 March 2015 | 0
Irish businesses are spending more than €122 million each year on the hidden costs and teething problems associated with cloud computing projects.
According to a survey by Sungard Availability Services among 50 senior IT decision makers in Irish businesses with over 250 employees, with an average cloud spend of more than €1 million last year, more than half of businesses (54%) have encountered some form of unplanned cloud spend. The survey reports that while each organisation is paying an average of €202,000 per year to ensure cloud services run effectively, there is also an additional €200,000 bill over the last five years due to unforeseen costs, such internal software maintenance (33%), upgrade costs (37%) and systems integration (37%).
Nearly half (44%) of organisations have been experienced unplanned spend for external maintenance of cloud software such as patching, recovery and data compliance. While more than half of businesses (54%) cited reduced IT costs as an expected return-on-investment in adopting cloud services, nearly half (44%) believe this has not been achieved.
IT decision-makers from Ireland reported the lowest unplanned cloud spend of all respondents, citing just €200,000 compared with Sweden at €315,000, the UK at €372,000 and France at €599,000.
“This gap seems to point to the level of market adoption within the regions,” said Keith Tilley, executive vice president, Global Sales and Customer Services Management, Sungard Availability Services, “with the UK and France rushing into cloud investment earlier on, while Ireland has taken a more sensible approach, joining the cloud movement a little later, where some key learnings have already been shared more widely across the industry.”
Despite being described as a means of reducing IT complexity, 40% of respondents said that cloud had in fact increased the complexity of their IT infrastructure. The majority of respondents (80%) claimed that cloud computing added a new set of IT challenges, with interoperability between existing the IT estate and cloud platforms was cited by more than a quarter (26%) as the biggest issue.
“When it first emerged, cloud was promised as a cure-all for any and every IT headache. However, as the market has matured, it has become clear that some organisations are now left with what we might call a ‘cloud hangover’,” said Tilley.
“By getting caught up in the hype, some organisations were quick to adopt the cloud without linking it back to their wider business goals and failed to see the additional considerations such as interoperability, availability and the operational expenditure linked to cloud. Whilst organisations can indeed see incredible benefits from cloud computing including agility, flexibility and cost savings, the cloud needs to be deployed on a case-by-case basis in line with business goals and the nature of the application or the workload.”
The full report is available to download here.