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Organisations falling short when it comes to cloud computing

10/05/2016 by Sharon Shahzad


New research has shown that many companies underestimate private cloud costs when budgeting new projects. In addition, a lot of firms lack any form of coherent cloud strategy, leaving them open to operational, rollout and budget woes as a result. Going forwards, firms must develop a watertight plan for cloud use, including ways to optimise services.

The latest findings were published in the State of Multi-Cloud Architecture report, commissioned by VMTurbo. Despite discovering that many companies already use cloud services, many executives don’t have a well-planned strategy. Of the 1,368 organisations questioned, 57 per cent don’t have any multi-cloud strategy at all, whilst 35 per cent lack plans for using the private cloud. Meanwhile, 28 per cent have no strategy for using the public cloud.

VMTurbo Chief Technology Officer Charles Crouchman said: “A lack of cloud strategy doesn't mean an organisation has studied and rejected the idea of the cloud; it means it has given adoption little or no thought at all.” He added that this makes it hard for organisations to correctly budget or understand the potential challenges they’ll face. “Without a strategy, organisations will condemn themselves to higher-than-expected costs, and a cloud that never performs to its full potential.”

The survey also found a number of other interesting results, one being that private cloud deployment costs are often significantly underestimated. Small and mid-sized firms are most likely to get these expenses wrong – a worrying discovery since poorly managed budgets will affect smaller companies more than their larger competitors, potentially leading to the risk of bankruptcy. On average, those wanting to build a private cloud set aside $148,605 in estimated funding to complete the project. However, businesses that have already completed such a task reported, on average, that such an undertaking costs $898,508, a figure that’s six times higher and could have longstanding ramifications for firms getting the costs wrong.

For the majority of organisations, experts continue to suggest that a hybrid strategy is probably the best solution, particularly for the immediate future. However, there is still an essential need for firms to develop a strategy outlining how they’ll optimise their use of cloud services. In addition, realistic expenses must be drawn up.

“An organisation using the cloud should be able to adapt its workloads dynamically so that they always meet the business's priorities at that precise time. Without this change in outlook, organisations will soon find themselves squandering the potential the cloud provides,” Crouchman explained.

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