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The cloud’s money-saving potential questioned [survey]

By | December 8, 2011, 5:48am PST

Summary: Approximately 45 percent of U.S. small businesses using the cloud reported that the cost reductions were non-existent but there were other operational benefits.

A new poll by IT services integrator CSC suggests that small companies seeking to save large amounts of money on IT infrastructure by embracing cloud services could be in for a surprise.

The research, which surveyed approximately 3,645 IT decision makers from companies of all sizes that HAVE adopted cloud services in some form, found that while a large majority of businesses (82 percent) did save some money by choosing to deploy technology through the cloud model, that savings was pretty small.

That was especially true among small businesses based in the United States. In fact, 45 percent of U.S. small businesses with fewer than 50 employees responding to the poll said they saved no money at all. That compares with 23 percent of U.S. businesses of all sizes. Almost one-third of the businesses saved less than $20,000 by shifting IT infrastructure into the cloud.

Still, that doesn’t mean small businesses didn’t see benefits. Consider the following:

  • 74 percent of small businesses said no one in their company resisted the move
  • 80 percent of all companies reported process improvements within six months of moving into the cloud
  • 33 percent said their need to accommodate access to computing resources from multiple sorts of devices was a major factor for moving to the cloud

That last point, in particular, is a theme I think you’ll hear far more often in coming months. In July 2011, research firm Yankee Group reported that almost half of large companies (48 percent) view mobile technologies as a major motivator of cloud adoption. That was a 92 percent increase over the response to the same question in 2010.

Yes, that is a big company response but in my experience small companies tend to lead when it comes to mobile technology innovation.

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Heather Clancy is an award-winning business journalist with a passion for green technology and corporate sustainability issues.

Disclosure

Heather Clancy

Writing publicly about what the high-tech industry is actually doing to help itself and the world get greener or more sustainable is one way I figure I can contribute more meaningfully to said effort. I am also a big OMG-kind-of-fan of smart leadership, which is why the goodly folks who publish this blog let me go on about this topic and why I am always on the hunt for forward-looking business management ideas.

My daily writing is focused on looking for topics for my blogs, GreenTech Pastures and Business Brains. I also write often about emerging technology trends such as mobile computing, unified communications and cloud computing. Occasionally, I will pop up at an industry conference in some sort of speaking capacity. In cases where a speaking engagement involves a sponsor that may be covered in this blog, that fact will be disclosed in coverage as appropriate.

My corporate writing work usually consists of crafting research white papers about some aspect of technology. In the event that my commentary (in written, audio or video form) mentions a company for which I have provided consulting advice, I will disclose that fact. However, there is no connection between these projects and the topics that I'm covering in my blog.

Biography

Heather Clancy

Heather Clancy is an award-winning business journalist with a passion for green technology and corporate sustainability issues. Her articles have appeared in Entrepreneur, Fortune Small Business, The International Herald Tribune and The New York Times. In a past corporate life, Heather was editor of Computer Reseller News, where she was a featured speaker about everything from software as a service to IT security to mobile computing.

Heather started her journalism life as a business writer with United Press International in New York. She holds a B.A. in English literature from McGill University in Montreal, Quebec, and has a thing for Lewis Carroll.

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RE: The cloud's money-saving potential questioned [survey]
adamfamularo Updated - 9th Dec
Interesting post, Heather. While cost or expense reduction should be a factor in decisions around cloud services, small businesses and enterprises alike should also keep in mind that failing to consider factors beyond cost may result in lost opportunities. Take, for example, a hypothetical situation: a company upgrades its website features and sees a 20% increase in online orders. If that drove revenue up by $1 million, would it be worth the $20K or even $100K cost to make it happen? Your last point about mobile devices driving cloud adoption further supports this idea. It should be as much about what cloud can do for the business in terms of agility, scalability, and responsiveness as it is about benefiting the bottom line.

Adam Famularo
General Manager, Enterprise & Cloud Solutions
CA Technologies
I thinking the most crucial stat here is that 80 percent see process improvements. May not directly tie to immediate cost savings, but it frees up the CIO to become increasingly strategic.
0 Votes
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People are more and more . . .
crcgraphix 9th Dec
turnin to the cloud as a solution for all of their server and computer roles and needs. There is much to say about how new forms of TCO derived cloud computing methods are revolutionizing the cost efficient and energy efficient atmosphere in IT.
0 Votes
+ -
Interesting post, Heather. While cost or expense reduction should be a factor in decisions around cloud services, small businesses and enterprises alike should also keep in mind that failing to consider factors beyond cost may result in lost opportunities. Take, for example, a hypothetical situation: a company upgrades its website features and sees a 20% increase in online orders. If that drove revenue up by $1 million, would it be worth the $20K or even $100K cost to make it happen? Your last point about mobile devices driving cloud adoption further supports this idea. It should be as much about what cloud can do for the business in terms of agility, scalability, and responsiveness as it is about benefiting the bottom line.

Adam Famularo
General Manager, Enterprise & Cloud Solutions
CA Technologies

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