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Friday, 27 January 2017 17:38

More than half of UK CIOs believe that outdated IT budgeting models are slowing down cloud adoption

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Confusion over how to pay for cloud, coupled with the limitations of traditional software licensing agreements remain barriers to cloud

More than half of UK CIOs (55%) believe that outdated capex budgeting models have made it more difficult, or slowed the speed at which they can adopt cloud services, according to research released today by Trustmarque Solutions Limited (part of Capita PLC). Further, almost three quarters (72%) of CIOs said the sheer number of ways an organisation can pay for cloud makes selecting the right solution complicated. While this is a marginal improvement from when the same question was asked in 2016 – where 76% of CIOs admitted confusion over payment models leads to difficulty in choosing cloud services – the research shows that how to pay for cloud is still seen a potential barrier to its adoption.

Existing licensing remains a barrier to cloud

The complexity and the lack of flexibility of existing software licenses is also a concern for many CIOs. This research found that 87% of CIOs believe existing software licensing agreements will delay them moving certain services to the cloud – this finding is actually worse when compared to 2016, when this figure was 80%. In addition, 59% of CIOs state the inflexibility of fixed-term and fixed user/usage on-premise licensing agreements is hindering the speed at which they have been able to move applications to the cloud.

“Cloud is now accepted as an essential part of every IT strategy, but in an era of constrained IT budgets – in both the public and private sectors – value for money is top of the CIOs agenda. Therefore, selecting the right payment model and understanding how to budget for cloud is critical,” said James Butler, CTO at Trustmarque. “Despite this, it is apparent there is widespread confusion over how to pay for cloud, which is hampering the speed at which organisations can adopt cloud solutions. The ‘on-demand’ nature of cloud, means unmanaged cloud can play havoc with long-term financial plans. CIOs must ensure they retain full visibility and control over their IT estate, across SaaS, IaaS and traditionally licensed solutions, to minimise the unplanned spend that poorly managed cloud infrastructure and services can result in.”

CIOs struggling to establish the most suitable cloud services for their organisation

Overall, the research also revealed that more than three quarters of CIOs (77%) are finding it difficult to establish which cloud services are suitable for their organisation, and to implement them. This result is a slight improvement on figures from 2016 – where 81% of CIOs admitted a lack of clarity means choosing cloud services is difficult – but clearly indicates this is still a considerable issue for many organisations. The research also found mixed views among CIOs on whether cloud delivers the promised benefits; half (50%) of CIOs believe cloud is only partly delivering on the promised benefits, and just under a fifth (16%) think cloud ‘barely’ delivers , or does not deliver ‘at all’.

Cloud disrupts IT departments and demands new skills

The era of cloud computing is affecting organisations in a number of ways – disrupting IT delivery and even changing the fundamental role of the IT department. The competencies that IT departments need are being transformed by cloud; with new tasks, such as re-architecting applications, and integrating cloud services from a mixture of public and private environments, challenging IT teams. Overall, just under two thirds (65%) of CIOs believe the emergence of cloud computing has meant the IT skills organisations need have changed over the last five years.

Furthermore, more than a third (37%) of CIOs stated that cloud has resulted in the restructuring of their current IT operations; likewise, 40% of CIOs believe that restructuring of IT operations is likely in the future.

“Transitioning to the cloud, or becoming a ‘cloud-first’ business, is a sizeable task for many organisations. It has taken a short period of time for cloud to become such a disruptive force, and it is likely that effect will continue into the next five years. Cloud computing is an exciting trend, and one which holds much promise for organisations – offering choice, flexibility and agility, that is unmatched by legacy technology. The CIO of 2017 must be capable of embracing cloud while minimising unintended consequences, by succeeding in overcoming the existing barriers to cloud adoption,” added James Butler.  

The research was undertaken by independent market research company, Vanson Bourne; the total sample size was 200 UK CIOs and senior IT decision makers from large enterprises with over 1,000 employees.

The full report, ‘The CIO in 2017: Overcoming Operational and Financial Barriers to Cloud’, can be downloaded here: www.cloudshift.trustmarque.com/financial-operational-cloud-barriers-report

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