Cloud Spending: The Hidden Truth

Cloud computing isn’t a technology, or even a set of technologies. It is a newly understood paradigm for approaching application delivery. This is why every vendor you can think of has been saying for the past two years that it has cloud products: It does. The timeshares of the 1970s were cloud products. We just didn’t put them in the wider context of the global communications network. Now we do.

This is a pretty useful insight when it comes to assessing how we budget and spend on cloud solutions, the topic of a study fielded by CIO Insight in March and April 2011. The survey received responses from 270 individuals involved in spending on both public and private cloud computing in organizations with at least 50 employees; 95 in organizations with 50 to 249 employees; 85 in organizations with 250 to 2,499; and 90 in organizations with 2,500 or more. Most, but not all, respondents had IT titles (82 percent). To view our complete report, “The Hidden Truth About Cloud Spending,” including charts and graphics, click here.

Recognizing that cloud computing is really a framework for understanding application delivery helps us interpret and adjust our strategies. We can look at where the spending is taking place–not in terms of use case or business unit, but by budget area. As with our survey on security spending (“Enterprise Security Spending Trends,” CIO Insight, January/February 2011), much of our focus in this report is on “hidden” spending–that is., spending drawn from areas other than a dedicated, or even centralized, budget.

Taking cloud computing as a framework, not a technology, helps even when you consider private cloud computing, for which only 42 percent of our survey respondents have dedicated budgets, compared with the 47 percent of respondents that have dedicated public cloud computing budgets. (See Finding 1.1)

Partly, this is just indicative of where we are in the private cloud adoption curve.

More so than for public clouds, private cloud deployments are being driven at the application level–one of the more interesting aspects of the current cloud computing market. Individual departments or lines of business that most need the private option are the ones allocating the spending, and for one particular use. (For public clouds, many applications, even when departmentally driven, can be easily offered as a service to the entire organization, creating opportunity for centralized spending.)

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