Study Finds Cost Savings From Cloud Shift

Nathan Eddy is a contributor to eWeek and TechWeekEurope, covering cloud and BYOD

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The move to the cloud is paying off for organisations who have fully committed to it with a more than 15 percent reduction on IT spending, according to the Computer Economics study

Organisations fully utilising cloud computing save on average more than 15 percent in IT spending, whether measured as a percentage of revenue or on a per-user basis, according to a report from Computer Economics.

A more detailed analysis of respondents’ IT spending mix shows that the savings come not only from a reduction in data centre spending but also in IT personnel costs.

Key technology

The cloud user organisations that participated in the study include two manufacturing companies, a life sciences organisation, a wholesale distributor, a systems integrator and an online content provider.

cloud tool mirantis fuelThe full study provides a description of the survey respondents, including their industries, sizes and cloud system portfolios. The report then outlines the strategic benefits of cloud computing beyond cost savings, including feedback from the respondents.

Recommendations for business and IT leaders in developing a strategic road map for full migration to the cloud are also detailed in the report. Survey respondents use a variety of cloud providers, including Amazon, Autodesk, Box.com, Coupa, Docusign, Insperity (ExpensAble), FinancialForce, Google, Infor, Microsoft Dynamics, NetSuite, Okta, Paylocity, Plex, Rootstock, Salesforce.com, Saleslogix, Ultimate Software, Virtustream, Workday and yieldEx.

The companies included in the report have annual revenues between $50 million (£32m) and $550 million and between 135 and 860 employees.

The study also compares high-level IT spending metrics of the cloud respondents against Computer Economics’ standard industry benchmarks, documents the savings they achieved, analyses their shift in IT spending to activities with higher business value and summarises focus on innovation instead of ongoing support.

Cloud computing is now regarded as a key enabler to corporate innovation, with organisations benefiting from the efficiency, low costs and flexibility presented by cloud use, according to a recent survey by Capita IT Services.

Simplification and flexibility

The survey of 35 chief information officers (CIOs) and IT leaders across 10 markets found that almost two-thirds (61 percent) believe increasing innovation and the business’s commercial agility through IT has gained more importance and is now one of their organisation’s highest priorities.

The majority of respondents have moved, or are in the process of moving, into the cloud, which was cited as being a key to increased innovation for two main reasons.

These include simplification, as the cloud offers an operating simplicity, especially across business divisions, both in terms of functionality and commercial agreements; and flexibility, which comes with commercial contracts with cloud providers evolving and becoming more flexible in terms of prices and services offered.

“The organisations that we work with are increasingly using IT as a route to innovation,” Peter Hands, executive director of Capita IT Services, said in a statement. “Cloud technology is making the process easier, allowing companies to increase productivity by offering trusted applications on the go and on their choice of device.”

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