What type of organizations are increasing their use of cloud computing?

ESG 2010 IT Spending Data Results May Surprise You

As an analyst, everyone and his brother has sent me their research claiming that large and small organizations are embracing and investing in cloud computing.

Nope. According to ESG's 2010 IT Spending Data, only 12% of SME (i.e. less than 1,000 employees) and enterprise (i.e. more than 1,000 employees) organizations claim that "increased spending on cloud computing" is one of their top ten initiatives for 2010. Obviously, most firms have other priorities.

Okay, 12% isn't a large population but common wisdom (and industry hype) would suggest that these cloud computing pioneers must be on the cutting edge of IT.

Wrong again. Actually, those investing in cloud computing fit a completely different model. It turns out that cloud adoption has a lot to do with:

1. IT effectiveness. Of those firms that rate their IT organization as "highly effective," 18% will increase their investment in cloud computing. Alternatively, 29% of companies that said that their IT organization "needs improvement" are investing in cloud services.

2. Cost cutting. Twenty-eight percent of organizations in "major cost cutting mode," and 21% of organizations in "moderate cost cutting mode" are investing in cloud computing. On the other hand, just 12% of firms claiming to be in "cost containment mode" are investing in the cloud.

Forget about burstable processing or massive Hadoop-based apps -- most companies look at cloud computing (and its many definitions) to cut costs or handoff difficult IT tasks to an expert. As such, cloud computing is a perfect fit for industries like State/Local government, manufacturing, and transportation that are cutting IT spending.

• cloud computing
• local government
• Manufacturing
• state government
• transportation