How Cloud Services are Impacting Corporate IT Budgets


Over the years, cloud computing services has seen tremendous growth. Initially used as a file storage software, cloud computing has transformed into a multi-use platform, computing everything from file sharing, to high-end graphics manipulation, and even full application hosting. Cloud computing has played a role in the innovation of virtual reality and has helped augment the technology into not only a gaming feature, but also a tool to be used in advanced research.

Due to fast network speeds and the ability to house extremely powerful systems in a data center, this type of technology is changing the way corporations handle IT. While most people agree that cloud computing solutions will continue to grow (and quite possibly set a new industry standard) the industry isn’t quite ready for a massive overhaul to cloud services quite yet. Because of this, many corporations are faced with a difficult decision.

What to Move to the Cloud – And When

Businesses are constantly having to evaluate what they want to move to cloud solutions and what they want to keep in-house. The fact that many of these in-house systems cost thousands (sometimes even millions) of dollars, it can be a difficult decision to make.  In some cases, like with mainframes or other specific hardware, there aren’t serious options available in cloud services. Companies that still use these systems may be hesitant to invest money in a system that could be moved to a cloud solution within the next several years.

Another potential concern is that while the security and stability of cloud services have come a long way, it can still be difficult to turn over control of the physical and network pieces of a corporate IT system. Many IT managers recognize that cloud solutions have a lot of advantages but are still reluctant to allow a third party to step in and take control.

Budget Impact

Rather than immediately approving the expenses associated with keeping IT systems up to date, companies may take ‘wait and see’ approach to see how the cloud technology advances.

David Wagner, the VP of research for Computer Economics released a statement on this subject saying, “Typically, before the cloud transition, companies would grow IT budgets roughly to match the expected revenue growth. This is no longer true in regions of higher cloud adoption, such as the U.S. and Canada, where IT budgets are not keeping pace with revenue growth.”

Staff Impact

Reduced budgets and transitions to cloud computing are making a big impact on staff, especially at large corporations. Businesses that are in the process of transitioning systems to the cloud, or are considering it for the future, are much less likely to hire on new employees to work in IT. Large companies have seen a slight drop in the number of IT staff being hired on.

Small businesses, however, are still hiring people to work in their tech departments. This is likely because they aren’t transitioning to the cloud nearly as quickly. Small businesses can usually operate their computer systems out of a small computer closet, avoiding the huge expenses associated with operating a full data center.

Impact for Years to Come

There is little doubt that cloud technologies will continue to be one of the most prominent technologies in the upcoming years. As technology continues to advance, so will Cloud services. Corporations and IT managers should take great consideration when planning future IT budgets.

How Cloud Services are Impacting Corporate IT Budgets
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How Cloud Services are Impacting Corporate IT Budgets
Businesses are constantly having to evaluate what they want to move to cloud solutions and what they want to keep in-house.
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