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Value of the cloud overstated, says survey


Privacy and security major concerns, while telecommuting doesn't take off

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Microsoft, Google, Amazon and Cisco, take notice: despite the near-constant hype about cloud computing services, most mid-market companies are still viewing cloud as a complement, not a replacement.

SWC Technology Partners surveyed 210 mid-market IT and business leaders and found that cloud computing, at least for the mid-market and even more so in the enterprise, is still very early in its evolution. The survey also revealed a few surprises about the acceptance of telecommuting in the mid-market.

The news comes just a day after Computerworld UK reported Cisco's CloudWatch 2011 survey, which showed that just 7 percent of British IT services of applications are in the cloud.

The disconnect between the hype of cloud computing and the actual implementation of cloud computing reared its head again in the SWC survey. Only 3.7 percent of respondents said that their company has adopted a cloud computing solution for the entire company. And, over half (54.2 percent) of the respondents indicate that their company is not pursuing a single cloud computing initiative. Privacy and security (20.9 percent) were listed as the biggest concern when considering the cloud, followed by cost (9.8 percent).

"The technology industry can be rife with hype," said Elliott Baretz, vice president of SWC. "Most reasons for eschewing the cloud have nothing to do with technology. Privacy and compliance and legal issues are what are keeping businesses on the sidelines."

Of the cloud services that are in production, Microsoft Exchange and SharePoint hold a comfortable lead, an indication that email, productivity tools and document management are the top candidates to go to the cloud. Almost 65 percent of respondents using a cloud service are using Microsoft Exchange Online and 48 percent are using Microsoft SharePoint Online. Google is also in the running, with 24 percent opting for Google Cloud Services (i.e. Google Apps). Surprisingly, Amazon's EC2 cloud service only captured 7.4 percent.

Baretz says that most cloud adoption is happening at the SMB and start-up level where the cost to benefit ratio favours the cloud. "These are the companies that need to save money on infrastructure costs the most," he says.

The mid-market and enterprise remain cautious about controlling the hardware and software, but have not ruled out the cloud and see it as a complement to on-premise technology, according to the survey.

This comment from one respondent suggests as much:

"I don't foresee the cloud as replacing the traditional use model we have now, but rather augmenting it. The cloud is a way to share data across many devices, enabling a user to work anywhere at any time in the most efficient manner. It doesn't replace the need for high performing, well designed, and low latency local applications and end user support."

As for the immediate future of the cloud, it will evolve as small companies turn into big ones and compliance regulations slowly adapt to the cloud model, says Baretz. "SMBs will grow and bring with them the cloud services that they started out with."

In addition to low cloud adoption numbers, the survey revealed another surprise: the acceptance and practice of telecommuting has remained flat over the past two years.

Only 14 percent of survey respondents indicated that telecommuting is the norm, down 1 percent since the 2009 survey. The number of survey respondents reporting telecommuting as "forbidden" was down since the 2009 survey, but it was only down by 3 percent.

Such little movement is surprising because in this down economy technologies that support telecommuting such as unified messaging and video conferencing have been seen as cost savers.

"Why the telecommuting adoption didn't meet expectations is hard to conclude," says Baretz. "One assumption may be that coming out of the recession business leaders had a desire to have a more concrete or physical interaction with their teams."

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