From the budget perspective, enterprise IT organizations are increasingly focusing on the transformation to cloud computing in one form or another as being the IT delivery model of the future. In our most recent survey completed in August 2014, 37% of respondents had separate budgets for cloud computing, almost identical to the figure from a year earlier, and 12 percentage points higher than the number in the survey completed at the end of 2013. For the group with separate cloud budgets, spending has continued to show a trend to a more regular distribution of budget levels, with a minimum budget of $5,000 and a maximum of $30m. Median and mean levels of spending are $725,000 and $3.15m respectively, slightly down from the prior survey.
Cloud is still a small percentage of overall IT budgets
Of the remaining 63% of respondents who did not have separate cloud computing budgets, two-thirds were able to estimate the percentage of their overall 2013 IT budget spent on cloud-related projects in comparison to traditional non-cloud IT spending, with 57% spending 5% or less on cloud. Of the remainder, 25% spent 6-20%, with 8% spending more than 50% of their 2013 IT budget on cloud-related projects.
In line with the previous two surveys, 81% saw an increase in cloud spending from 2013 levels, and 82% expected 2015 spending to be higher than 2014 levels. Twenty-seven percent (27%) of respondents expected 2015 spending to increase by up to 10%, 36% by 11-50%, and 19% expected increases of over 50%. As indicated by median budget levels, the top five sectors were telecom/technology, public sector, energy/utilities, healthcare/pharmaceuticals and financial services.
Anecdotal commentary illustrates the slow and steady pace of cloud adoption by TheInfoPro’s respondent community:
- “Small dollars ($100k) for now as we test and build comfort with technology/process. We are trying to redirect $100k working with partners to build the case for a private cloud.” – LE, Consumer Goods/Retail
- “The 5% of cloud spending above would be 25-30% if you include … exchanges around the world, reference data providers. Externally provided data capabilities. Growth, it won’t spike. It’s a steady thing. We have to change some legal stuff as an organization to enable stuff to happen. We’re hamstrung by what data we can put where. 2016, 2017 more interesting things can happen.” – LE, Financial Services
- “Challenge on separating spending – we have so many businesses. I cannot give you any figures as to what we’re spending. I can give you relatives. It’s impossible to separate the cloud computing budget because of how many different players there are. I can tell you this – it’s all opex. We cannot capitalize software or infrastructure as a service.” – LE, Energy/Utilities
- “The way the DoD works, there is money assigned for large capacity machines, then commodity-type machines with no cloud capabilities. Agencies must then provide funding for software, developed code, and any cloud-based features/functionality. Our HPC lab has total spending of $2-3m. One to 2% is for internal cloud-related spending. We have no plans for external cloud spending. We want spending on internal cloud to grow, but it will stay flat or decline due to budget pressures, but will increase in 2016. We have a large machine coming in this year which has taken much of our resources for this year. Disk-based archive will grow, however, in 2014.” – LE, Public Sector
- “Difficult for us to justify getting funding right now. For FY 2015, trying to put in about a hundred to two or 300 thousand in the budget for OpenStack or cloud-related initiative. Currently less than 5% of our budget. If the new ERP goes into cloud, 15-20%.” – MSE, Healthcare/Pharmaceuticals
- “Guestimate 10% cloud to 90% traditional.” – LE, Industrial/Manufacturing