Where does Cloud Computing Investment come from?

One of the most fundamental, but overlooked consideration around cloud computing for public, private and hybrid cloud investments is the simple one of “Where do Clouds Come From”.
To the point, investment by organisations has to come from somewhere. There are clearly a range of sources depending upon the nature of the investment from apps to infrastructure. Potential sources of cloud investment include transferal from the following traditional IT investments by organisations:

  • Custom Application Development
  • Integration
  • Managed Services
  • Outsourcing
  • Private Cloud
  • Internal IT budgets
  • New Business Investment

What this also highlights is that there is significant cross-pollination in the cloud. Investment comes from a range of sources and does change the dynamic. Whilst the change from a managed services or outsourcing delivery model to a pure cloud model may be small for some, it does involve significant changes in terms of governance, vendor management and change management.

Shifts from private to public cloud (or vice versa) will increase as the overall adoption of cloud computing increases.

In order to get a full view of the market, capioIT has conducted significant numbers of qual and quant discussions with providers and buyers of cloud services. It is early for this type of analysis but the results are clear and will only focus when adoption of cloud increases.

In order to highlight them, the following looks at the Australian Public Cloud market in 2012.

Proportion of Service Type – Australia Public Cloud 2012
Custom Application Development 8%
Integration 7%
Managed Services 7%
Outsourcing 8%
Private Cloud 1%
Internal IT budgets 26%
New Business Investment 43%
Total  100%

What this highlights is that there is a shift from all different parts of an organisation budget. IT is clearly an important source of investment, but it is important to consider that CapioIT believes almost half of spend will come from outside the IT department.

The implications for this are very significant for both providers and buyers. I look forward to your feedback on this and for vendors to understand how they will need to manage go-to-market requirements.

About capioIT - Phil Hassey

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world. phil@capioit.com +61422231793
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