The hidden costs were explored in a new survey of 468 CIOs, conducted by Research In Action and underwritten by Compuware Corporation. There’s no question a lot of money is going into cloud projects — two-thirds of the respondents say that cloud is their top investment area for 2013. Many have crunched the numbers for the up-front costs of cloud computing, which typically include subscription fees, combined with some level of staff time required for set-up, user training and integration.
The study found that the majority of CIOs (79 percent) actually think a lot about potential hidden costs, and what they may mean to the business.
From a management perspective, the top cloud computing concerns are:
- Poor end user experience due to performance bottlenecks (64 percent). This goes right to the customer end-user experience as well, since e-commerce is the leading cloud application area, the survey finds – 78 percent of respondents are already using cloud resources to support e-commerce.
- The impact of poor performance on brand perception and customer loyalty (51 percent).
- Loss of revenue due to poor availability, performance, or troubleshooting cloud services (44 percent).
- Increased costs of resolving problems in a more complex environment (35 percent).
- Increased effort required to manage vendors and service level agreements (23 percent).
Of course, these costs are difficult to quantify and measure. An outright outage or system failure is easy to quantify, and can be relatively simple to address. But a slowdown or partial glitch somewhere in the process is more challenging; and can eventually add up to real money lost.
The survey also finds that 73 percent of companies are still using outdated, or even manual, methods to track and manage cloud application performance. The most common metric used to track application performance in the cloud is simple availability or uptime, rather than more granular end-user metrics such as response time, page rendering time and user interactivity time.
But despite fears of using cloud-based services, the CIOs rated cloud computing as their top investment priority in both the short and long term. They also cited integration between public, hybrid and private cloud as the most important trend in the cloud space over the next five years.
“With cloud adoption topping the list of priorities for CIOs, companies are clearly seeing a benefit to the agility, flexibility and time-to-value that cloud services can deliver,” said Bernd Greifeneder, chief technology officer in Compuware’s APM business unit.
But the research showed that with the integration of public, hybrid and private clouds, managing and monitoring the IT environment is a growing challenge. No longer is the IT department in sole control of the services being delivered to users, since a variety of cloud services and providers are being used to deliver user applications. This in turn is presenting a management challenge.
“CIOs are right to carefully consider the impact that cloud and third-party services can have on user experience,” said Greifeneder.
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