Weblogic Authors: Yeshim Deniz, Elizabeth White, Michael Meiner, Michael Bushong, Avi Rosenthal

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Global Study: Cloud Computing Provides Real Business Benefits, but Fear of Security and Control is Slowing Adoption

Senior Management and IT Executives Report that Cloud is 'Not Hype' and Delivers Real Cost Savings; Nearly 40 Percent of Canadia

Contrary to conventional wisdom, the vast majority of business and IT executives report that cloud computing is a viable technology option that can improve a company's bottom-line results according to a new global survey conducted by an independent market research firm. Proof positive of the growth in cloud are findings that show 37 per cent of Canadian companies currently use a combination of cloud computing and internally owned IT systems compared to only one-third of companies worldwide. However, despite growing evidence that cloud-based systems have the potential to lower costs, the majority of companies report no plans to integrate cloud computing in the next 12 months.

The study, commissioned by Avanade, a global IT consultancy, surveying more than 500 global C-level executives and IT managers in 17 countries, comes at a crucial time for the technology industry as IT budgets are shrinking and new technology options are becoming available. Key findings include:


--  By a 5-to-1 ratio, executives report that they trust existing internal
    systems over cloud-based systems due to fear about security threats and
    loss of control of data and systems.
--  At the same time, the majority of respondents reported that their
    current internal systems are too expensive.
--  Meanwhile, early adopters of cloud computing report they are
    increasing their investments in this technology after seeing reduced up-
    front IT costs and improved agility to respond quickly to market


The following data shows how companies are struggling with change and how to increase productivity with fewer resources:


--  More than 50 per cent of companies surveyed use technologies to cut
    costs. And, half of all respondents say they adopt new technologies to save
--  C-level executives and IT decision makers overwhelmingly agree that
    cloud computing is a real technology option (71 per cent worldwide).
--  Furthermore, nearly two in three IT executives worldwide (65 per cent)
    and four of five in Canada (80 per cent) believe cloud computing reduces up-
    front costs.
--  Four out of five respondents report that existing internal IT systems
    are too expensive.
--  While nearly half of companies consider themselves early adopters of
    new technologies, the majority of companies (61 per cent worldwide) are not
    using cloud computing systems at this time.
--  More than 80 per cent of those who use only internally owned IT
    systems do not plan on integrating any form of cloud computing in the next
    12 months.


Kaytek Przybylski, Capability Director with Avanade Canada, said: "This global study reveals that business and IT leaders recognize the business benefits of cloud computing for making a meaningful difference in their organizations and it's very encouraging to see that Canadian firms are ahead of the curve when it comes to cloud familiarity and usage. Nevertheless, international concerns about security and control of data are limiting its broad adoption. One of the pressing issues that lies before our industry is addressing these perceived barriers and helping businesses in Canada and abroad to develop a strategy for deploying cloud-based services today and build a long-term roadmap to capitalize on the business value of cloud computing in the future."

Canadian Findings

Despite concerns over security and control, companies based in Canada are exploring cloud computing technologies.


--  Eighty per cent of respondents in Canada report that the uncertain
    economy will likely lead them to adopt new technologies to save money or
    remain competitive.
--  Nearly half (49 per cent) of Canadian respondents claim to be early
    adopters of new technologies, often trying them before anyone else (in line
    with the 47 per cent of global respondents that claim to be early
--  A majority of respondents in Canada (71 per cent) were familiar with
    cloud computing compared to 61 per cent worldwide.
--  Thirty-seven per cent of Canadian companies surveyed report they are
    currently utilizing a combination of cloud computing and internally owned
    IT systems compared to only one-third of companies worldwide.


The Business Benefits of Cloud

The results of this survey echo the adoption of many fundamental technologies that have become widely used in the workplace, including the Internet, e-mail and social media. In each case, fear of loss of control and security threatened adoption of those technologies. While companies recognize that there are inherent security concerns, cloud computing represents a new model for enterprise computing. Data that supports the business value of cloud-based systems includes:


--  Respondents recognize that cloud computing allows companies to:
    --  Focus on the core business (65 per cent).
    --  React more quickly to market conditions (62 per cent).
    --  Gain access to the latest technologies (51 per cent).
    --  Improve ability to be flexible (70 per cent).
--  Nearly one-third of companies currently using cloud-based systems have
    increased their use of cloud computing in today's economy after seeing
    the benefits it can bring.
--  Not only do companies agree that cloud computing has lower up-front IT
    costs, but respondents also indicated that cloud computing is the best
    option for ensuring lower ongoing costs (operational expenses).


"Companies need to continually embrace best practices and consider new technologies in order to remain competitive in this global market. This research shows cloud computing may be the next wave of IT evolution," says Przybylski. "Avanade's mission is helping companies navigate change and realize the benefits of new technology options."

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