According to Gartner, the typical IT organization invests two-thirds of its budget to daily operations. Moving to the cloud will fee up between 35 percent to a whopping 50 percent of operational and infrastructure resources for reallocation elsewhere.
"Over the next five years, CIOs expect dramatic changes in IT as they adopt new technologies and raise their contribution to competitive advantage," Mark McDonald, a Gartner research vice president said in a statement. "Leaders will implement new infrastructure technologies to achieve increased efficiency and to redirect IT resources to create greater business impact." Resulting changes will range from "re-imaging IT's role in their organization to the creative destruction necessary to break old practices and redeploy resources to new initiatives."
More than 2,000 CIOs -- from 50 countries and 38 industries, responded to Gartner's survey. Three percent said that the majority of their IT infrastructure ran in the cloud or software-as-a-service (SaaS) technologies. While a seemingly small number, Gartner called cloud adoption as progressing faster than expected. Based on CIO responses, Gartner expects the number to rise to 43 percent within four years.
Cloud computing offers several important advantages to IT organizations:
1. Provide employees access to their files and data anytime, anywhere and on anything. This is true whether the organization self hosts or outsources cloud services to Microsoft, Saleforce.com or another vendor.
2. Better secure data from loss or theft. Too much valuable data leaves organizations via laptops and smartphones, creating security and privacy risks. A properly-run cloud service can keep more files and data behind the firewall, rather than roaming the planet on employees' corporate-issued--or even personal--equipment.
3. Diminish maintenance hassles and overhead. If Microsoft releases a new version of CRM or Exchange, the average IT organization might take years rolling it out to employees. Hosted SaaS makes the newest version immediately available to everyone, without requiring time-consuming and costly testing, certification and deployment.
4. Reduce hardware upgrade costs. Many organizations can use existing client hardware longer and dramatically reduce server infrastructure when adopting cloud services, particularly those that are outsourced.
5. Reduce software upgrades and maintenance costs. For example, Microsoft's "Software Assurance" program requires subscription-like fees for the promise but not guarantee of future software versions. IT organizations can pay for exactly the number of hosted seats they need on real subscription basis and with assured upgrade benefits.
The aforementioned cost benefits are one of the key factors driving more IT organizations to the cloud. According to Gartner's CIO survey, most IT organizations will spend about the same in 2011 as the previous year, but well below pre-recession levels. Gartner doesn't expect IT budgets to return to 2008 levels for at least another three years.
"CIOs and IT have been boxed in between modest budget growth and growing legacy requirements," McDonald, said in the statement. Cloud computing, including SaaS and social networks enables "the CIO to redefine IT, giving it a greater focus on growth and strategic impact. These are two things that are missing from many organizations." Besides cloud computing, CIOs ranked virtualization as a priority, citing similar cost-savings and infrastructure-changing benefits. The two technologies are "well-suited for this budget reality, as they offer similar service levels at lower budget costs," McDonald said.
The entire list of priorities in order of importance:
- cloud computing;
- mobile technologies;
- IT management;
- business intelligence;
- voice and data communications;
- enterprise applications;
- collaboration technologies;
- infrastructure; and
- Web 2.0.
Gartner: Most CIOs have their heads in the clouds