The world may have buckled under a recession the past two years, but technology continued to progress, even though few companies could invest in the latest and greatest IT resources. Now, with the financial hardships easing somewhat, CIOs are finding they’ll have to play some serious catch-up in 2010.
However, funds will remain limited, challenging CIOs to go all out without going broke. The solution, according to a new study backed by BT Global Services, appears to be cloud computing. In fact, 68 percent of businesses see the value in Web technology advancements and 53 percent plan to increasingly invest in Web 2.0 over the next year. The only hiccup is many senior executives aren’t convinced the cloud is for them.
Last year marked the first time in a decade that companies slashed their IT budgets, BT’s Datamonitor-conducted study, “Enterprise Intelligence: The challenge for the CIO in 2010,” found. The subsequent underinvestment then held enterprises back — customers often defected and expansion plans were a no-go. This year, saddled with aging IT resources and inadequate software, CIOs are being forced to update systems and networks, yet without the budgets they’ve seen in the past. The best news there is that 65 percent of CIOs responding to BT said they think their budgets will rise at least as fast as the economy.
“However,” BT noted, “that might not be enough as enterprises cannot afford budgets to stagnate further if they want to lead the field through the economic recovery and beyond.”
The ideal way to shepherd enterprises through these tough times is to take “bold steps” into the cloud, BT said. But convincing CIOs to do that doesn’t look easy, as more than half of the executives surveyed “are not convinced cloud computing can save them money,” BT said in its report. So there’s a disconnect for cloud providers to overcome. Cloud computing eliminates capex while allowing users to access the programs they need on a pay-by-use basis. “In other words,” BT said, “it should enable the CIO to cut costs.”
Yet many of the CIOs who do lean toward adopting cloud computing struggle with security concerns. The majority of CIOs and their senior counterparts think they need to store their virtual data on servers within their own countries’ borders. Many said they were uncomfortable at the thought of keeping their information on servers based in Africa, Latin America, Russia and Central Asia and the Middle East. They fear security and political issues, service quality, distance and time zone interference, and cost.
And there’s perhaps an even bigger hurdle for cloud computing proponents to overcome: Almost half of CIOs said they deal with information so sensitive it could never be stored in the cloud. Cloud computing vendor Appistry said in November 2009 the cloud will indeed attract more hackers as it gains popularity. This will have “a chilling effect,” the company said, but adoption will continue unabated. To be sure, research firm Gartner also says most organizations will turn to cloud computing in 2010 because it re-arranges some costs and reduces others.
