How Unexpected Costs Create a ‘Cloud Hangover’

How Unexpected Costs Create a ‘Cloud Hangover’

How Unexpected Costs Create a ‘Cloud Hangover’How Unexpected Costs Create a ‘Cloud Hangover’

Unanticipated cloud expenses can reach seven figures, and cloud investments often don’t live up to the hype—creating a cocktail of concern for CIOs.

Public-Private PreferencesPublic-Private Preferences

35% of surveyed IT decision-makers said their company has invested in hybrid cloud computing infrastructure over the past three years, while 34% said their organization has invested in private cloud infrastructure. 23% said their business has invested in a public cloud.

Performance AssessmentPerformance Assessment

63% said their organization’s deployed cloud solutions have met expectations.

Biggest Cloud Adoption Business DriversBiggest Cloud Adoption Business Drivers

Increased security: 45%, Need to keep shadow IT under control via cloud service purchases: 39%, Cost savings: 39%, Greater business agility in responding to customer/market demands: 39%, Enhanced competitive advantage: 38%

Prominent PurchaseProminent Purchase

44% expect their company to spend no less than $750,000 on implementing cloud services over the next calendar year, up from 30% whose organization spent this much two years ago.

Unexpected ExpenseUnexpected Expense

79% say their company has encountered no less than $75,000 in unplanned costs over the last three years to make their cloud services as effective as possible, with nearly one of five saying their organization has spent at least $1.5 million on this.

Biggest Sources of Unplanned Cloud CostsBiggest Sources of Unplanned Cloud Costs

Upgrades: 36%, Customizations: 35%, Internal maintenance for software: 35%, Consultancy charges at implementation phase from cloud provider: 34%, Personnel required to manage deployment: 33%

Burdensome BillBurdensome Bill

More than three-quarters of IT decision-makers said their company spends at least $15,000 on maintaining cloud services every month, and more than one-third said this expense amounts to no less than $60,000 a month.

Onerous EffortOnerous Effort

63% said their organization has struggled with cloud implementation, and 74% said they’ve had to bring in additional external support to complete implementation.

It's ComplicatedIt’s Complicated

72% said that investing in cloud services has increased the complexities of their company’s IT environment.

Big BuildupBig Buildup

67% said the cloud has emerged as “broadly positive,” but it hasn’t lived up to its hype.

Dennis McCafferty
Dennis McCafferty is a contributor to CIO Insight. He covers topics such as IT leadership, IT strategy, collaboration, and IT for businesses.

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