Clouds combat computing costs

Beverley Head
Wednesday, 25 August 2010 18:29

Business IT - Technology

Australian organisations moving to a private cloud are expecting return on investment in less than two years, while those enterprises plumping for public clouds expect 20 per cent annual savings on their IT bills. While it’s business agility that large organisations claim they want from the cloud – the hip pocket benefits aren’t being sneezed at.

Linus Lai, IDC associate director, said that the difference in anticipated benefits arose because of the different funding models for private and public clouds. The ROI figure of 1.8 years referred to the return on capital expenses required to build an internal cloud, while the 20 per cent savings figure referred to the drop in operating expenses associated with running IT when an organisation used public clouds.

The IDC survey which was sponsored and released today by VMware found that 72 per cent of Australian organisations now use or plan to use cloud infrastructures. Just 3 per cent of organisations consider cloud a passing fad.

VMware Australia vice president Paul Harapin said that over the last year there had been a fundamental shift in opinion about cloud computing. “A year ago we did a focus group and people pretty much took the mickey out of the whole concept.

“Within a year cloud has gone from being a bit of a joke to the number two priority for CIOs today.” (He claimed virtualisation has been the number one priority for some time.)

Mr Harapin acknowledged that the advent of the global financial crisis, which forced organisations to look for ways to tighten their belts had accelerated the push. However he said that the range of service offerings had also improved.

The research found that while 30 per cent of organisations were keen to use public clouds, a much greater number – 70 per cent were considering private clouds. Of the private cloud adopters, a half of these were also using or looking at public clouds.