February 2014 from computer economics – “…The study finds that organizations fully utilizing cloud computing save on average more than 15% in IT spending, whether measured as a percentage of revenue or on a per-user basis, as shown in Figure 2 from the full study. Detailed analysis of respondents’ IT spending mix shows that the savings come not only from a reduction in data center spending but also in IT personnel costs.
As a result of these economic efficiencies, cloud users are able to devote a higher percentage of their IT spending to new initiatives and less to ongoing support. The cost savings, combined with strategic benefits in speed, scalability, and agility, argue in favor of organizations moving aggressively to the cloud…”
180 View – You can bet that an on premise vendor will be able to show you statistics with the exact opposite findings. In our opinion, there is currently a high price tag to get on the cloud for ERP systems but as the price comes down, more organizations will go up.
1 thought on “Cloud Users Spend Less, Spend Smarter on IT”
As the author of the report, let me make a short comment. First, thank you very much for highlighting our report.
Second, one of the reasons we did this research was because there were arguments on both sides. But to our knowledge, no one had actually benchmarked the IT spending of companies that had gone totally to the cloud in order to see how this decision affected their total IT spending. Not the spending for one particular system–but the spending overall.
We expected that the results would show that companies in the cloud spent about the same as organizations in general but that they spend it in “smarter ways.” Our research showed, however, that there were two benefits. Not only do they spend smarter–they also save money.
Finally, our research is totally unbiased. We do not sell either cloud or on-premise solutions. We have no vested interest in the findings. We only report what we find.
Thanks again for the coverage!
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