infoTECH Feature

July 18, 2013

Study: CIOs Concerned About Hidden Costs of Cloud Computing

Given the increase in cloud adoption in the past year, it may come as a surprise that the majority of CIOs are concerned about the hidden costs associated with cloud computing.

That’s according to a recent study commissioned by Compuware (News - Alert) and conducted by Research In Action, which found that 79 percent of CIOs have cost-related concerns from a management perspective. The results of the survey of 468 CIOs revealed the top three cloud computing concerns are the following:

    1. Poor end user experience due to performance bottlenecks;
    2. The impact of poor performance on brand perception and customer loyalty; and
    3. Loss of revenue due to poor availability, performance, or troubleshooting cloud services.

Yet cloud still makes a compelling business case. Based on the survey results, CIOs rated cloud computing as their top investment priority in both the short and long term, with integration between public, hybrid and private cloud cited as the most important trend in the cloud computing space over the next five years, according to Bernd Greifeneder, CTO of Compuware’s APM (News - Alert) business unit.


Image via Shutterstock

“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,” Greifeneder said in a statement. “But CIOs are right to carefully consider the impact cloud and third-party services can have on end-user experience. The dynamic and remote characteristics of cloud-based applications require a new, smart and automatic approach for deep, proactive monitoring that not only identifies end-user experience problems but also provides deep diagnostics for problem resolution.”

The study also revealed that companies are increasingly leveraging the cloud to deliver business-critical applications, such as e-commerce, which was the most commonly used cloud service; 81 percent of CIOs are either already using cloud-based ecommerce platforms or are planning to within the next 12 months.

Yet, despite the business critical nature of these cloud applications, 73 percent of companies are still using outdated methods to track and manage application performance. In fact, 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, the study said.

Cost is certainly a legitimate concern – and conversely, one of the most frequently touted benefits of the cloud is enabling cost optimizations. However, scalability comes at a cost, which means the cost per hour for a cloud server can actually be greater than the average hourly cost of a server when it is amortized over its lifespan.




Edited by Alisen Downey
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