Cloud computing a ‘viable option’ for Aussie businesses but still doubts about adoption: research

Staff Writers
Tuesday, 24 February 2009 08:00

IT Industry - Market

Australian businesses are still hedging their bets and unsure about taking up cloud computing as a viable technology option for cutting costs and improving business flexibility, despite the fact that many companies are under severe cost pressures due to the economic downturn.

At least that seems to be the conclusion to be drawn from a global survey testing the attitudes and concerns around cloud computing of more than 500 C-level and IT executives in 17 countries, including Australia.

According to the survey, commissioned by global IT consultancy Avanade, the vast majority of Australian business and IT executives believe that cloud computing is a viable technology option to cut costs and improve business flexibility but, despite this, 70 percent have no plans to adopt it within the next 12 months.

The survey reveals that, despite the majority having resisted the new technology, of the 20 percent of companies surveyed that were using cloud-based systems, nearly half (44 percent) had increased their usage as a result of today’s economic downturn after seeing the significant benefits it can bring.

Craig Dower, Managing Director, Avanade Australia, said today that although there was widespread recognition that cloud computing was a real technology option (69 percent) rather than ‘hype’, and despite growing evidence that cloud-based systems have the potential to lower costs, the study revealed that most companies were reluctant to move away from their internally owned and managed IT systems.

Dower said the survey found that the vast majority of Australian companies (80 percent) were not using cloud computing systems at this time. Furthermore, it confirmed that the large majority (70 percent) of those that currently depend on internal IT systems had no plans to switch to cloud-based technologies in the next 12 months.
 
“Our experience is that most enterprises are contemplating cloud computing in a strategic sense, but are not yet ready to implement. The survey results confirmed this, highlighting fears about security and loss of control over systems and data.”

Dower said this echoed the adoption of many fundamental technologies that have become widely used in the enterprise, including the Internet, email and instant messaging. “In each of those cases security and loss of control threatened adoption. Cloud computing is no different.”

According to Dower, in this economic environment, costs were not a high barrier to change. The majority of Australian executives who took part in the survey (73 percent) indicated that they were turning to new technologies to cut costs and remain competitive, rather than cutting back on their technology uptake to save money. 

“By turning to cloud computing for certain technology needs, instead of owning and managing all IT systems, companies can gain the ability to free up resources to focus on strategic business initiatives - helping them serve customers better, improve business performance and win market share,” Dower maintained.

Dower also said that while companies were concerned with security and data protection with cloud-based systems, the study also revealed that business and IT leaders recognised the benefits of cloud computing for saving money and building a flexible IT infrastructure. Respondents recognised that cloud computing allowed companies to focus on the core business (51 percent); improve their ability to be flexible (58 percent) and to decrease upfront IT costs (capital expenditures) (51 percent).

Dower predicted that cloud computing would be part of the next wave of IT evolution and that “ignoring the cloud won’t make it go away. Companies need to continually consider and embrace new technologies in order to remain competitive in this global market.”

In the survey, conducted for Avanade by Kelton Research, executives and IT decision makers interviewed were in the major regional markets of North America, Europe and Asia Pacific.