66% of CIOs admit cloud is not delivering

A cloud with a circle filled with an X on it.

Posted on Tuesday, January 31, 2017

A new study carried out by Trustmarque has discovered that just one-third of CIOs believe that the cloud is living up to its hype. 16 percent reported seeing little or no benefit at all from their cloud investments.

Obviously this is quite worrying – in a profit-driven marketplace any saving is important. But when just 50 percent of CIOs are reporting some benefit, there is clearly something wrong.

A budgetary problem

The Trustmarque report concludes that there are two key factors when trying to reduce the failure rate. First, cloud pricing is notoriously complex, making it incredibly difficult to accurately budget for how services are used. And the complexity only increases when multiple services are in play.

The second challenge is in the way that IT departments are funded. With annual, or multi-year funding, CIOs find it incredibly hard to budget for a computing service that generates constantly changing bills. Even with an annual subscription, increasing demand, and service “add-ons”, budgets can be exceeded easily.

Is there really a need for change?

According to Trustmarque, the problem revolves around the way IT departments are funded. If money is allocated on a capital spend basis, CIOs will forced to spend it accordingly – completely at odds with the OPEX model encouraged by cloud services.

Trustmarque’s solution is to restructure IT budgets so that they become completely OPEX focused. However this change also requires a significant change in the way the department is run, taking advantage of skills that are currently rare and very expensive.

The reality is that CIO dissatisfaction with cloud services is not always financially motivated – sometimes they really do not (and cannot) deliver. And restructuring finances and organisational structure will never resolve these problems.

In the short to medium term, businesses may find that they can achieve the required cost and efficiency savings by maintaining their existing in-house systems beyond the OEM’s warranty period. Whether keeping the infrastructure as-is, or redeploying post-warranty hardware in a new, cloud-like software-defined set-up, the CIO regains control of IT systems and spend.

And if additional, seasonal elasticity is required, the CIO still has the option to offload processing and storage to the cloud. Taking a piecemeal approach allows for greater control of spend – and of the services used.

Whatever the exact cause, the fact is that for some clients cloud services may not be consistently delivering on promises. The time has come for CIOs to reconsider their operations – and how their existing infrastructure can deliver more in the immediate future.

Next steps

To learn more about extracting a greater return on your hardware investments in the age of cloud, please get in touch.