If You Think You'll Save Money With Cloud Computing, Think Again

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More than half of organizational users saved little or no money after transitioning to cloud computing, according to a new study, and only 14 percent actually downsized their information technology departments after moving to the cloud.

The findings could concern federal IT officials who have said they would save roughly $5 billion annually by 2015 by transitioning about a quarter of the government's $80 billion annual IT budget to private, public and hybrid clouds.

About one-fourth of 3,500 public and private organizations recently surveyed reported no savings with cloud computing and about 35 percent saved less than $20,000, according to the study funded by CSC, a major government IT vendor, and conducted by TNS, a market research firm.

Respondents were in the United States, Australia, Brazil, England, France, Germany,  Japan, and Singapore.

U.S. officials said the federal government's use of cloud computing wouldn't cost IT jobs because those staffers would be moved to jobs that supported other agency missions. Most savings, they said, would come from reduced spending on hardware, energy, and real estate.

Computer clouds are essentially large banks of off-site computer servers that can pack data more tightly than traditional servers and can move that data more nimbly as one customer surges in use and another declines. Cloud customers can access their data using any device, a major selling point.

According to the CSC study, accessing data and programs on multiple devices was the most popular reason for corporate and public-sector users to move to the cloud, accounting for about one-third of all transitions. Only 17 percent of those surveyed said they moved to the cloud to save money.

Nearly 95 percent of surveyed users said that cloud computing improved the way they managed data; 80 percent said they saw improvements within six months of moving.

Surveys have routinely shown that concern about security in cloud computing is a major barrier for both federal and corporate IT workers.

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