Less than half of Euro enterprises are ready for cloud

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10 September 2014 | 0

According to new research from IDC, European IT departments still need to make significant improvements before they have fully embraced cloud architectures and transformed themselves into internal, or cloud, service providers.

The analyst said that when asked to evaluate their current readiness to execute on their cloud strategy, European respondents admitted to unexpectedly low levels of confidence. More than half (56%) said that their IT departments cannot find qualified staff to effectively support cloud projects. Almost two thirds (61%) are struggling to upskill their employees to effectively evaluate, negotiate contracts with, and manage relationships with cloud service providers. Nearly three quarters (70%) of European enterprises still need to learn how to make effective use of automation, self-service, and orchestration tools.

Significantly more than half (59%) of European organisations reported being unable to take cloud projects beyond the level of IT infrastructure projects, to provide direct value to the business.

The research came from a survey entitled “CloudTrack”, which interviewed IT and non-IT staff at director level or above in 1,109 organisations globally, including 304 in Europe. The survey confirmed, said IDC, what anecdotal evidence already suggested, that the vast majority of European IT departments still require a great deal of transformation and need to invest further in people, process, and technology to mature their cloud architecture.

The effective use of automation, self-service, and orchestration tools remains the biggest challenge for IT organisations, while accurately defining costs and implementing chargeback models is a struggle in the business and IT relationship

“The use of cloud computing as an increasingly business-critical technology is quickly changing how companies and institutions evaluate, procure, and deploy IT assets,” said Carla Arend, programme director of IDC’s Cloud Practice. “However, the effective use of automation, self-service, and orchestration tools remains the biggest challenge for IT organisations, while accurately defining costs and implementing chargeback models is a struggle in the business and IT relationship. The transition to cloud computing requires change throughout the organisation — in people, process, and technology.”

“Spending on cloud services and building blocks for cloud environments has seen strong 25% growth in Europe over the past 12 months, but the push from service providers might start running out of steam in the coming years if IT buyers and line-of-business owners are not assessed in their cloud maturity level and then helped to systematically tackle hurdles to adoption,” said Giorgio Nebuloni, research manager, IDC’s Cloud Practice.

Further findings from the survey showed that IT organisations see themselves as service providers focused on business priorities. Almost half of the respondents have achieved this change in mindset, where IT departments have embraced the IT-as-a-service approach and are ready to negotiate service levels and serve their business users like a service provider. Only 5% of respondents do not have this major transformation as an area of focus.

Despite several years of implementation around cloud, the research also showed that return on investment (ROI) remains difficult to prove. Only around a third of European organisations are able to build a comprehensive business case for their cloud projects, reports IDC. Understanding all the implications, costs, and benefits of a transformational process like implementing cloud computing is tough, but without creating solid business cases it is hard to demonstrate the ultimate success of cloud projects.

The research did say that cloud can drive business innovation and competitive advantage. Some 41% of respondents use cloud to gain a business advantage, leaving 59% of European organisations not able to take cloud projects beyond the level of IT infrastructure projects. The real benefits of cloud projects, says IDC, will only be realised if they are used to drive business innovation and competitive advantage.

 

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