IT Solutions Blog

3 IT Budget Trends in Cloud Computing

It’s no secret that cloud computing is taking the IT world by force, and trends in IT budgets reflect this phenomenon. If you look at just about any company that has an IT budget, from SMBs through the Enterprise and up into larger corporations, you’ll see at a minimum a fresh interest in the cloud. While some companies are more aggressive about adopting cloud computing strategies, you can see it just about anywhere you look.

Here are some of the most common budget trends in IT as they relate to cloud computing:

1.    Variable revenues mean variable IT budgets. The Y2K non-event followed by the dot com bust followed by the recession have put IT budgets on less than a shoestring. While some companies are bouncing back and starting to shift funds back into IT, the lesson of the past ten years has been that IT budgets are going to fluctuate, and they’re going to fluctuate greatly. Accordingly, the IT department needs to be able to expand and contract along with budgets. Cloud computing allows IT departments to do exactly that while maintaining integrity of service.

2.    Wholesale shifts to the cloud are rare. This is especially true for larger companies. However, what we’re seeing with larger companies is that, even though they have dedicated internal resources, they are shifting some functions to the cloud. The cloud offers them scalability, virtualization, fault tolerance and increased availability that is must more expensive to provide in-house than it is to purchase via the cloud.

3.    IT operations and support is getting a smaller share of the pie. Traditionally, IT budgets have assigned around 70% of their budget for infrastructure to cover the costs of ongoing IT operations and maintenance. The balance of IT budgets was set aside for innovation. Today, however, many businesses are trying to get that number for ops and maintenance down to about 50%. Innovation will stay at 30%, opening up a significant portion of the budget to provide capacity that will be able to support the growth of the business.

As internal IT shops come under increasing pressure to reduce size and increase efficiency and services, expect more and more of the IT budget to shift to cloud solutions.

Dispelling the Vapor around Cloud Computing

In recent years, cloud computing environments have been gaining popularity. In the IBM Global CIO Study, when asked about their most important visionary initiatives, cloud computing was cited by more than one-third of CIOs as being among the most important.

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