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Cloud spending will skyrocket in 2012: KPMG

The vast majority of senior executives say their organizations have already moved at least some business activities to the cloud and expect 2012 investment to skyrocket, with some companies planning to spend more than a fifth of their IT budget on cloud next year, according to a report by KPMG International.

“Clearly, these findings proclaim, ‘the cloud is now,’” said Lynne Doughtie, US vice chair - Advisory at KPMG LLP. “As cloud adoption begins to accelerate among organizations around the world, clearly cloud is transcending IT and widely impacting business operations, as a full third of survey respondents said it would fundamentally change their business, which is significant considering many organizations are still developing their cloud strategies.”

In a KPMG survey of organizations that will use the cloud, as well as companies that will provide cloud services, economic factors were cited by 76 percent of both groups as an important driver for cloud adoption. However, a number of other considerations were equally or more important: 80 percent said the switch to cloud was driven by efforts to improve processes, offering more agility across the enterprise; 79 percent of users and 76 percent of providers said they saw it as having technical benefits, in some cases improvements that they otherwise could not gain from their own data centers; and, 76 percent said the use of cloud would have strategic benefits, possibly including transforming their business models to gain a competitive advantage.

Most user respondents to the KPMG survey (81 percent) said they were either evaluating cloud, planned a cloud implementation, or had already adopted a cloud strategy and timeline for their organization, with almost one-quarter of them saying their organization already runs all core IT services on the cloud (10 percent) or is in transition to do so (13 percent). Fewer than one in 10 executives say their company has no immediate plans to enter the cloud environment.

IT-business executives differ moderately on cloud expectations

Executives whose companies would use a cloud strategy agree that spending will rise significantly in 2012.

According to the KPMG survey, 17 percent of corporate executives said cloud spending would exceed 20 percent of the total IT budget in 2012.

Half of the IT executives at companies where cloud is or will be adopted say security is the most important challenge or concern, compared with 42 percent of the business unit executives, while 51 percent of the cloud provider community said security topped their list. Business unit executives (29 percent) shared equal concerns about performance with their IT counterparts (30 percent). In addition:

  • IT governance was a top challenge among 22 percent of the IT leaders, but cited by just 17 percent of the business users;
  • Nearly a fifth (19 percent) of IT executives said loss of control over customer data was a perceived top challenge, compared with 14 percent of respondents among their operations counterparts; and,
  • Regulatory compliance was a top challenge among 16 percent of the business executives, compared with just 10 percent of the IT leaders.

•Date: 11th October 2011 • Region: World •Type: Article • Topic: Cloud computing

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