CIOs need to act on cloud to achieve results: Ovum

By Freya Purnell

A recent CIO survey revealed that cloud services adoption, though expected to grow, remains at micro-niche levels in many Australian organisations, according to analyst firm Ovum.

Ovum asked CIOs about sourcing approaches for 50 IT activities, with the survey finding that 76 per cent were sourced in-house, with only 3 per cent currently sourced as cloud services.

Steve Hodgkinson, global chief analyst for public sector research and advisory services and author of the report, said, “Adoption of cloud services is projected to increase to 12{db8ca4bbfe57dc8f9b6df9233a3a6c04f4968125edf9bb330d4f787c3a87cd09} within a few years. A similar group of CIOs, however, had a similar sourcing profile at this same CIO Strategy Summit last year, and made similar predictions.”

Hodgkinson said that while cloud-sourcing can deliver better, faster, less costly and less risky IT, achieving these results requires more than just good intentions.

Around one-third of the CIOs cited pain points including delivering “more for less” while providing and securing mobile devices and supporting business demands for business intelligence and analytics.

While CIOs named analytics and mobility as red-hot topics, they were ambivalent about social and not interested in Big Data, with 37 per cent of CIOs regarding this topic as low or below-average priority.

“These results suggest that Big Data is perceived as being at an early stage of maturity, technology-driven and over hyped. Clearly CIOs believe in the importance of analytics more generally, so the value of business insights derived from data is not in question,” said Hodgkinson.

The survey also revealed that in-house IT sourcing is still the dominant sourcing model in 2014. Managing traditional people, process and technology issues of the IT department is still “core business” for this group of CIOs.

Hodgkinson said, “Internal shared services are a niche sourcing approach, adoption of which is projected to remain at current levels. Outsourcing adoption is rising, but not rapidly. Overall outsourcing currently accounts for 13 per cent of IT activities, and this is expected to rise to 16 per cent within the next few years.”

While overall cloud services adoption is slow, some categories are seeing much stronger adoption than others – for example, software-as-a-service (SaaS) CRM is currently implemented by 23 per cent of the CIOs surveyed, and this is expected to rise to 50 per cent over the next few years.

“Cloud services adoption is certainly growing – most particularly in storage and compute infrastructure-as-a-service (IaaS), and in a handful of categories of SaaS applications. There is still, however, plenty of scope for broadening the use of cloud services within a wider range of data centre, network, applications, information management and end-user services activities,” said Hodgkinson.


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