While enterprise CIOs anticipate making a significant investment in private and public cloud technologies over the next twelve months, the majority of IT decision makers don't have the necessary metrics to build an intelligent business case for moving applications and infrastructure components to the cloud, a survey of CIOs has found.
Moreover, the vast majority of those surveyed indicated that they neither possess the ability to track utilization nor are they able to recover these costs via "chargeback" or "showback" methods, further complicating their ability to calculate ROI for the business.
Key findings of the survey:
-- 80 percent of respondents get some amount of their current server infrastructure delivered through a private cloud, however, nearly 90 percent report they are not charging end-users based on their private cloud consumption, representing a significant gap in financial transparency and accountability of IT service costs.
-- While a majority of IT executives (64 percent) believe that tracking utilization levels of virtualized and cloud infrastructures will be "important" or "very important" during the next 12 months, nearly 40 percent said they are not currently tracking utilization levels of virtualized and cloud infrastructure.
-- Almost 90 percent of IT leaders surveyed believe it will be either "important" or "very critical" to improve IT services tracking in virtualized and cloud environments in the coming year.
-- 80 percent of IT executives surveyed believe metrics related to cloud would grow in importance over the next 12 months and almost 75 percent believe there is very high value in being able to accurately measure the COGS for their cloud-based operations.
-- Nearly one-half of executives surveyed (48 percent) report the cost of cloud services to their business units as a lump sum of all IT costs, while more than 20 percent do not provide any reporting back to their business units.
Comment from Keith Muma, vice president of the Worldwide Executive Council: Our research shows that while enterprise CIOs remain enchanted by the cloud and the promise of instant scalability and automated provisioning, they're still struggling to understand the economic drivers behind the cloud decision. Like a traditional supply chain manager, CIOs must be able to calculate their Cost of Goods Sold (COGS) to build a strong business case for the cloud. This survey demonstrates that fundamental metrics like tracking, utilization, and the ability to present a 'bill of IT' back to the business will become essential to CIOs as their cloud strategies mature.
Comment from Chris Pick, chief marketing officer at Apptio: Everyone is talking about how the cloud is transforming IT but too little is being said about the economic drivers that ultimately support the cloud decision. As this survey demonstrates, most CIOs do not have the ability to precisely calculate what it costs to deliver IT services to the business. Without a solid understanding of their fully loaded baseline costs, they're unable to benchmark their own services to third-party cloud providers and consequently, they're incapable of delivering IT services at market rates. Technology Business Management solutions such as those provided by Apptio empower CIOs with the intelligence they need to fully understand when it does -- and does not -- make sense to move application and infrastructure components to internal or external cloud.
About the survey: The Worldwide Executive Council (WEC) interviewed 100 U.S. CIOs from firms representing a broad range of vertical industries, including financial services, communications, business services, retail, manufacturing, healthcare, technology, media, engineering/construction, aerospace, oil and gas, wholesale/distribution, utilities, government and entertainment. All CIOs interviewed work at firms with at least $50 million in annual revenues and indicated that their IT organization employ a shared services model, supporting multiple business units, functions, or departments with shared IT resources.The survey is titled "IT Survey on Cloud Computing, Virtualization, and IT Financial Services."
Contact: http://www.apptio.com
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