CIOs say 'maybe later' on cloud computing

More than half of respondentssaid  they were using, trialling or considering cloud services.

Cloud computing is the latest term for the model of renting hosted, highly-scalable software applications via the Internet.  

IDC's January study found that 11 percent of Asia-Pacific organisations subscribe to such services, 41 percent are in evaluation and 17 percent will invest once there are enough services available to make cloud computing more compelling.

"That's the reality check," said Linus Lai, associate director of research at IDC Australia.

"There is a surprisingly large amount of organisations investing in the technology, but when we ask executives for their down-to-earth option there is a lot of scepticism around whether cloud computing is just a bunch of vendors renaming ASP or utility computing."

IT executives are able to "reconcile their personal opinion" with commercial reality, Lai said.

"They have their doubts and reservations, but they recognise that cloud computing is something you can't afford to ignore."

Lai said the survey dispels the myth that cloud computing only appeals to SMBs and not to the enterprise.

"There was very little difference in terms of opinions or adoption between large enterprises and small businesses," he said. "Neither was there any distinction around verticals. The surprising result is that enterprises are just as interested in cloud computing as small businesses."

Larger organisations tend to use cloud computing for applications that are not time nor mission critical, Lai said, and keep the rest under their control.

The survey also shows some confusion in the market as to whether cloud computing is indeed a cheaper model than deploying new applications in-house.

Lai said some survey respondents consider cloud computing to be the more expensive option if an application is to be used for several years.

"There is an OpEx cost to pay-per-use, whereas if you buy an application you get the benefits of depreciation," Lai said. "The question is whether it costs more to rent services or bite the bullet and suffer the big upfront capital outlay?"

Larger organisations also have to consider the hidden costs, he said, such as the cost of integrating cloud applications with existing systems or the cost of bringing data and applications back in-house should the contract be terminated down the line.

The survey showed a similar split around the perceived risks associated with a new model. Some 37 percent of respondents said it was difficult to justify a cloud computing project in tight economic times, while 28 percent said cloud computing was even more relevant in these business conditions.

Lai said most IT shops within large organisations are using technologies such as virtualisation to achieve lower costs in-house rather than embarking on cloud computing.

But in the longer term, Lai expects the streamlined "right-click" way to provide systems and resources in virtualised environments will ease administrators into cloud computing.

"These two seemingly disconnected ways to cut costs will merge at some stage in the future," Lai said.

Security and availability remain key concerns, Lai said.

"Only the business knows the true cost to the business if systems go down and services are not available."

IDC will discuss the findings further at its 1^st Annual IDC Cloud Conference at Sydney's Westin Hotel on March 25.