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Cloud Adoption Curves

By Guy Currier  |  Posted 05-05-2011 Print

So, what will happen to all these individual private clouds as we move along the adoption curve? We do anticipate ongoing centralization. For example, today's ERP cloud will become tomorrow's ERP-human resource management cloud, and the day after tomorrow's corporate private cloud for general company use. The biggest share of dedicated private cloud budgets today comes from hardware investment. (See Finding 1.2.) Nearly all organizations have hardware as part of their private cloud budget. (See Finding 1.3.)

In private cloud environments, average spending per employee on necessary hardware is $871, much higher than the average $510 they need to spend per-employee on IT staff to operate their private cloud. (See Finding 1.4.) It's important to keep in mind, though, that these systems, network devices, appliances and other needed private cloud equipment shouldn't have to be deployed anew for every new private cloud application. So eventually, as usage goes up, the overall costs are likely to ease.

The spending scenario is far different in public cloud spending. Hardware investment--in the form of upgraded Internet services and new client systems--is a smaller share of budget, accounting for an average of $597 per employee. But that's not the only factor to consider. There's an extremely low barrier to adding new public cloud applications when you need them, independently of any others. And there's no particular economy to be found by adding an application to an existing public cloud setup.

This easy proliferation of public cloud applications explains the relatively high level of staffing costs as part of public cloud budgets (an average of $792 per employee).

The result? Organization and management become critical issues. And this need for staffing is an ongoing cost, not something you can write off after startup. This is a further reason to expect public cloud budgets to remain stable and not decline at the levels of their private cloud counterparts.

Much of cloud spending is drawn--and will continue to be drawn--out of non-cloud budgets. This is a perfect example of how cloud computing functions as a framework for building corporate service strategies, rather than serving as a technology unto itself.


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