Business looking to the cloud as IT budgets boom

Dan Hatch News
21 Mar, 2011

Businesses are finally looking to spend more on IT this year and many are expected to cash in on the cloud.

Seventy per cent of companies plan to spend some of this year’s IT budget on cloud computing technologies, a new IBM survey has shown.

It also showed most mid-sized enterprises expected to have more cash to splash on IT over the next 12 to 18 months, with almost two-thirds of respondents believing they would have increased IT budgets this year. That’s up from just 11 per cent in last year’s survey. 

Managing director in EMEA for IBM partner Virustream, Andy Rigby, said companies were recognising that cloud computing delivers “many tangible benefits, including eliminating initial capital expenses for IT systems as well as increasing CPU efficiency and reducing energy consumption”.

“[These] benefits [are] particularly important to midmarket customers given tight economic conditions,” he said. “As such, we’ve seen a steady increase in interest from mid-size companies who are looking for trusted technology partners that can address and eliminate many of the obstacles of widespread cloud computing adoption, such as security and availability concerns.”

When IBM surveyed medium-sized firms 18 months ago, most were focused on reducing costs and improving efficiencies, according to IBM UK and Ireland midmarket business leader Lubomir Cheytanov.

Only a fifth of companies expected their IT budget to decrease and a further fifth expected it to stay at about the same level.

“Today the conversation is also about expanding their business, connecting with customers and gaining greater insights,” Lubomir said.

But vendors should not get too excited about the flush of funds, Quocirca analyst Bob Tarzey warned. He claimed many would only be disappointed by weaker sales as the refresh cycle ended and also warned the market should not get too carried away by cloud.

“It is an important area of growth and it’s where a lot of companies are looking, but it’s still only about five to 10 per cent of the overall IT market,” he said.

But Tarzey also noted that growth in cloud services uptake and the revenue that represented was faster than the overall IT market.

The Centre for Economics and Business Research recently released data suggesting cloud computing could boost the European economy to the tune of £650 billion over the next five years.

 

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