Average company spends $6,300 on cloud computing, will spend 10% more this year

Survey confirms companies are still in the early stages of cloud computing, and still trying to sort things out.
Written by Joe McKendrick, Contributing Writer

A new survey asked companies about their average spend on cloud computing resources, and the results are surprising, in a low-spend way. That is, the average company spent just over $6,300 in 2010. This spending is expected to ramp up at least 10% during 2011.

Survey confirms companies are still trying to sort out cloud.

The survey of 100 IT executives, conducted by Osterman Research for Electric Cloud finds that among organizations that have implemented cloud computing, spending on cloud-based infrastructure averaged $6,335, or $23.31 per employee, in 2010.  That spend is expected to rise to $6,920, or $26.63 per employee, in 2011. This suggests that the companies with cloud computing tend to be on the smaller side, averaging about 300 employees each. In fact, Osterman reports the median number of employees at the organizations surveyed was 403. (PDF of the report available here.)

A majority of respondents just started adoption of public cloud computing this past year, and about 40% say they just started their private cloud implementation in 2010. For a relatively new initiative, ROI has been sizable -- the average return on investment was reported at 46%. However, ROI is still a mystery; 57% of respondents either did not know or could not quantify their ROI on cloud computing.

However, the survey also finds that many organization are not fully leveraging the cloud infrastructure they have implemented. Of the companies using private or public cloud computing, 52% have cloud infrastructure resources that are rarely or never used and 47% report some or lots of excess capacity.

The survey finds that 48% of organizations report using or are planning to use private cloud computing. In addition, one in five organizations are currently using public cloud computing, and another 34% are investigating with the intent to implement a public cloud.

Software development is one of the biggest uses of private cloud computing, the survey finds. Fifty-six percent of companies report using or considering to use private cloud computing for software development and/or testing. Software development tasks perceived to derive the greatest benefits from private cloud computing were: system testing, 49%, requirements planning and tracking (42%) and static analysis (39%).

Readers, $6,300 a year sounds way too low for the total costs associated with cloud computing, especially for mission-critical applications and infrastructure. Do you pay $23 per employee for cloud? Do these numbers make sense to you?

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