Cloud computing increased costs for 31% of companies, study says

Many businesses are turning to cloud computing services in part to help them cut costs. But a recent report says cloud computing savings may not be all they’re cracked up to be. 

Cloud computing has a lot of benefits for businesses — but lower IT costs aren’t necessarily one of them, according to a recent IDG survey.

The 1,358 IT professionals surveyed were asked about the top benefits their organization saw after deploying cloud services — and decreased spending wasn’t among the top four answers given. The benefits most often cited:

  • Easier access to critical business data and applications (56%)
  • Greater IT innovation (56%)
  • More effective employee collaboration (54%), and
  • Greater levels of IT agility (54%).

In comparison, just 32% of survey respondents said they’ve been seeing decreased IT costs.

In fact, almost the same number of organizations (31%) said IT costs have increased since they started using cloud computing services.

What happened to cloud computing savings?

Here are a few of the most common reasons businesses may not save as much as they originally expected after adopting cloud computing services:

1. Demand for new IT skills

Cloud computing can help lessen the need to keep IT employees on staff. However, the type of IT pros companies need once they invest heavily in cloud computing can be harder to find.

Nearly half of the organizations surveyed (49%) said there’s been an increased need for specialized IT skills to manage a cloud-heavy infrastructure.

The problem: There aren’t that many cloud specialists out there, and lot of companies want to hire them. In fact, cloud computing skills are expected to be among the IT skills in the highest demand over the next few years.

What companies can do: Instead of recruiting from outside, many experts recommend companies acquire the skills they need by offering training to current IT staffers.

2. Diminished benefits as scales increase

One of the benefits of cloud computing is that services are scalable. If a company needs, for example, more storage space, it simply pays more to the provider to get a higher allotment.

While that increases the speed of deployment, it also means that the more the company uses, the higher the costs per subscription period. And those costs will add up over time.

That’s one reason many start-up firms are decommissioning their cloud applications and returning to an old-fashioned IT infrastructure, according to a recent article in Wired.

The bottom line: Public cloud services get more expensive over time, and for some operations, keeping everything in house will save money in the long run.

3. Strategies not optimized

Another factor keeping costs high is that organizations are still working on figuring out the optimal ways to take advantage of cloud computing. Most companies (59%) say they’re still trying to figure out which IT operations are the best choices to move to the cloud.

So far, organizations are leaning toward services that hold the least amount of sensitive data, as well as those that take the most advantage of cloud applications’ ability to access information from anywhere. The operations most likely to be in the cloud today are:

  1. Collaboration and conferencing applications (58% are using or planning to use a cloud service)
  2. Email and messaging services (57%)
  3. Data storage (49%)
  4. Customer Relationship Management and Sales Force Automation (47%)
  5. Content Management systems (43%)
  6. Human Resources systems (40%), and
  7. Business analytics (40%).

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