Research argues hidden costs contribute to a ‘cloud hangover’ for businesses
It’s the morning after the night before. You’ve had a bit too much, your head’s pounding, and you’re frantically searching your brain for anything you might have said or did that you’ll be paying for later.
We’ve all been there. Yet according to new research from Sungard Availability Services, it’s a similar effect at work when the IT department buys cloud solutions. 87% of the 150 UK-based senior IT decision makers polled say they have encountered some form of unplanned cloud spend.
All this improved productivity and efficiency is great, but there are plenty of hidden costs and issues lurking around the corner – and it’s not going to be solved by an aspirin and a glass of water before you go to bed. On average, each organisation polled was spending £200,000 a year to ensure their cloud services run effectively. Yet this isn’t the full story.
Anyone who has ever tried to piece together the remnants of the night before always has a first port of call; the receipts. All manner of weird and wonderful items can appear on these pieces of paper. The Sungard AS research showed organisations spent an extra £270,000 on unforeseen costs over the last five years, including adding resources to manage deployment (44%), internal software maintenance (42%) and systems integration (40%). Suffice to say it was a bit more than a takeaway and a taxi.
This wasn’t the case elsewhere in Europe however. Only 54% of respondents in Ireland had encountered unplanned spend on cloud, with £150,000 spent on extra resources. IT decision makers in France had a whopping £430,000 of unexpected spend.
Almost half (45%) of UK-based respondents said cloud had increased the complexity of their IT infrastructure, while 70% admitted cloud had added a bunch of new challenges to the IT department. 28% of those polled said their IT costs had not gone down overall, as an expected return on investment in adopting cloud services.
Keith Tilley, executive vice president at Sungard AS, noted how, like the barfly who goes back for just one more, it’s more often than not the customer’s fault for getting into that state in the first place.
“By getting caught up in the hype, some organisations were quick to adopt the cloud without linking it back to their wider business goals and failed to see the additional considerations such as interoperability, availability and the operational expenditure linked to cloud,” he said.
“Whilst organisations can indeed see incredible benefits from cloud computing including agility, flexibility and cost savings, the cloud needs to be deployed on a case-by-case basis in line with business goals and the nature of the application or the workload,” Tilley added.
As this publication has examined before, cloud computing is not a magic cure all and due diligence has to be applied. Questions over data residency and data sovereignty have to be asked. The benefits are clear to see, and organisations continue to adopt aggressively, but this research shows how hidden costs remain an issue.
You can take a look at the effects of the ‘cloud hangover’ in the full report here.
Updated March 31: A previous version of this report referred to Sungard Availability Services as Sungard, which is a separate company. CloudTech is happy to correct the record.
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