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Surveys Clearly Define Drivers and Obstacles for Cloud, SaaS

by Dave Hannon

October 4, 2011

By Dave Hannon

@Daveatwispubs

Cloud computing and software-as-a-service are not only here to stay, but are growing both in terms of total spend and in terms of IT priority. While the benefits of these models continue to win over converts, the checklist for a successful implementation is getting a bit clearer, indicating there's still plenty of work for the IT organization to do during a cloud or SaaS project.

How big of a priority is cloud right now? Eighty-one percent of user respondents to a recent KPMG survey said they were either evaluating cloud, planned a cloud implementation, or had already adopted a cloud strategy and timeline for their organization. And 17% of corporate executives in the survey said cloud spending would exceed 20% of the total IT budget in 2012.

"Cloud adoption is quickly shifting from a competitive advantage to an operational necessity, enabling innovation that can create new business models and opportunities," said Steve Hill, U.S. vice chair - Strategic Investments at KPMG. 

According to the KPMG survey, IT organizations say the there are still obstacles to successful cloud implementations which the IT organization needs to be on top of. The most pressing include:

  • Security concerns
  • Loss of control over customer data
  • Regulatory compliance
  • Tax implications

Ta x implications are a relatively new concern for cloud implementations as well. The KPMG survey found that approximately 45% of the respondents had not evaluated the tax implications of cloud or don't know if these factors are being evaluated

On the SaaS side, a recent survey from Gartner found that SaaS is moving from a complementary technology (to on-premise solutions) to a replacement technology. More than 95% of organizations plan to maintain or increase their investments in SaaS and more than one-third have migration projects under way from on-premises to SaaS.

"Respondents cited ease and speed of deployment and cost-effectiveness as the top two reasons for adoption," said Sharon Mertz, research director at Gartner. "Leading uses of SaaS were either replacements for on-premises applications or net-new SaaS solutions. This represents a shift from previous Gartner surveys where more respondents indicated SaaS was being used as an extension to an existing on-premises application.

The biggest obstacles to a successful SaaS deployment, according to the Gartner survey, are:

  • Limited integration with existing systems
  • Network instability
  • Longer-than-anticipated implementation cycles
  • Lack of internal governance policy for the evaluation and use of SaaS

Certainly, cost benefits remain a top driver for both cloud and SaaS, even more so as business executives become more involved in the IT evaluation and selection process. But these two surveys are a reminder that all of those cost benefits can be eradicated by a flawed implementation. Cloud and SaaS offerings continue to become more turnkey, but never you worry -- there is still plenty of work for the IT organization to do to ensure a successful im plementation.

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