Cost savings driving cloud computing adoption

By eddieadams | September 10, 2010

Research recently conducted at the Cloud Word Forum in London found companies turning to hosted software and cloud computing do so to drive down or limit spending while still implementing innovative new technology. The low start-up costs of cloud computing have been proven to benefit organizations financially, while boosting agility and reducing other costs such as utility bills. The appeal of reduced spending and improved technology has enticed a number of companies – of all sizes and in several industries – to implement or consider cloud computing. Similar trends have developed in the past with agile development and other IT processes.

Fifty-nine percent of the participants believe the cloud to be a "pivotal" decision in enterprise IT. For companies that successfully implement and deploy the cloud, the benefits extend far beyond the most commonly discussed. For example, implementing the cloud can free IT staff from managing servers or software installations. With the added time, they can participate in new projects and use their skills to innovate in others ways. In general, the consistent quest for efficiency is benefited by moving to the cloud – in terms of spending, human resources and technology.

However, organizations that move to the cloud must understand that their security must be a primary concern. Enterprise IT security has been an issue since computers became an integral aspect of operations, but the cloud poses issues that most companies haven’t faced before. For example, failing to secure networks and encrypt data on the cloud can result in targeted attacks or other breaches that often result in fines from regulatory authorities and other organizations.

"In many ways, the business benefits of the cloud are obvious. The high-risk strategy in the current economic downturn is to batten down the hatches and do nothing. The lower risk strategy is to exploit the new cloud capabilities to break the inflexibility of legacy, gaining process change, flexibility and agility and the ability to take out operational costs – all vital in managing a business through very challenging times," Peter Karsten, vice president of UK sales for Cordys, said.

SAP analyst Warren Small, speaking at another cloud computing conference, said companies of all sizes appear to be ready to move the cloud. For a while, it appeared as though smaller organizations were the only companies making the move, with hosted software as the preferred form. However, medium-sized and large companies have followed suit in 2010 by adopting SaaS as well as services such as online backup and cloud-based disaster recovery solutions. Both of these services help organizations achieve business continuity after issues such as natural disasters that severely impact operations.