Return on investment (ROI) and lower total cost of ownership are not the main drivers for the majority of organisations adopting public cloud services.
So said Terry White, research director at CXO Advisor, during the Kinetic Cloud & Virtualisation Summit, in Sandton yesterday. In reference to a recent study conducted by Ovum, White said cost tends to be the fourth driver of cloud adoption.
"Public cloud services are typically not chosen to save costs; enterprise adoption of public cloud services is mainly about realistic trade-offs," he said. "Return on investment is seldom an issue when organisations consider public cloud services.
"The biggest reason why organisations adopt public cloud services is that they offer better functionality and faster implementations than the alternatives."
These services also address user frustrations with the slow cycle of innovation of past ICT solutions, as well as user expectations, he explained. Discussions about cloud, he added, should be based around frank assessments of the adequacy of an organisation's existing ICT capabilities.
Typically, he said, organisations mostly spend on IT to run the IT engine, followed by fixing the IT engine, servicing the engine, improving the business, and lastly, transforming the business.
White also pointed out that public cloud is preferred by organisations that have experienced repeated failures with implementation or the roll out of on-premise application projects.
He added that public cloud offers a more efficient and effective way to source ICT-enabled business processes, applications and infrastructure.
"It also offers a new way to accelerate participation in the rapidly evolving social networking and mobile solution ecosystems in the Internet age."
According to White, traditional ICT approaches are focused on owning and controlling resources, assets and contracts for specified services. The public cloud enables the focus to shift to accessing iteratively evolving services and participating in dynamic Internet ecosystems, he explained.
However, he also noted that those who see more risk than opportunity in cloud computing tend to be sceptical, or even critical, of the new model.
He is also of the view that though concerns about security and regulatory compliance are taken seriously, they are not viewed as "showstoppers" as long as careful thought is given to the categories of data that will be stored in the cloud.
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