June 23, 2017

Survey: businesses ramp up spending on cloud computing

Security fears ease, but cloud costs can climb fast with increased usage.

By DC Velocity Staff

Businesses are spending more on cloud computing as improved technology eases concerns about security, but users must guard against overspending, according to an IT industry survey released Wednesday.

Nearly 70 percent of U.S. businesses surveyed by Clutch, a Washington-based business-to-business (B2B) ratings and reviews firm, said they plan to increase spending on cloud computing in 2017. One in five of those businesses report their cloud computing spending this year will likely increase by more than 30 percent, according to the study, "How Businesses Use Cloud Computing: 2017 Survey."

Companies are migrating their software applications and databases from on-premise servers to cloud platforms in large part because they are gaining confidence in cloud security, the survey showed. The top five benefits of using the cloud, ranked according to how often they were cited by respondents, were:

1. Security (mentioned by 45 percent of respondents)
2. Increased efficiency (41 percent)
3. Data space (40 percent)
4. Flexibility (33 percent)
5. Scalability (28 percent)

This attitude is a shift from past years.

"Early on, there was a lot of concern from people with respect to moving workloads to the cloud because of security reasons," Jeremy Przygode, CEO of California-based managed service provider (MSP) Stratalux Inc., said in a statement. "Only the most basic of security features were built into the cloud. It really didn't have a lot of the feature sets and functionality that you can find today."

In today's world, however, the cloud is often considered a more secure option than on-premise deployments, whether measured by physical security (protecting physical assets at a geographic location), infrastructure security (ensuring security patches are updated as soon as possible), or data and access security (such as encrypting data and controlling user privileges), the report found.

The only caveat is that end users must follow the same practices that they apply for on-premise software use, the report said. These include maintaining office security strategies such as encrypting data and databases; ensuring that users' privileges are correct; and deploying features such as cybersecurity scanners that monitor for threat scenarios, Clutch found.

"Cloud is the new normal," Przygode said. "When businesses need to evaluate new solutions, or need to do a hardware refresh on existing solutions... [c]loud is the go-to solution to figure out how to do that."

As users become more comfortable with cloud security, however, they are finding a new concern—higher costs. The survey found that the largest percentage of businesses listed "increased cost" as a challenge they had encountered with their cloud provider in the past year, suggesting the increased spending may not always be intentional or wanted in some cases, Clutch said.

Those spikes in cloud computing costs are triggered when businesses buy space on cloud platforms at initial costs that can be as low as fractions of a cent per hour for a given amount of storage. If usage surges, those prices can jump up dramatically, Clutch warns.

"Cloud computing is a dual-edged sword," Przygode said. "It's great because you can quickly provision equipment or resources in the cloud by simply pushing a button. That's the agility. However, the other edge of that sword is, because it's so easy, people tend to fire stuff up and forget about it."

The best solution to control cloud computing price fluctuations and stay within budget is to exercise strict monitoring over usage time, and use proper governance over contract rates, the survey found.

The Clutch survey included 283 IT professionals at businesses across the U.S. that use a cloud computing service. Of those businesses, 58 percent had 11 to 1,000 employees, while 42 percent had more than 1,001 employees. The majority (65 percent) of respondents were male, and three-quarters of the respondent pool were 25 to 44 years old.

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