Cloud Apps is Pushing IT Spending to a Tipping Point

    As businesses increase their adoption of cloud apps and Software as a Service, they’re shifting their IT spending away from capital investments and also cutting back on IT staff.  The reason is evident in a simple statistic: More than half of IT organizations – a net of 56% – plan to increase their spending on cloud applications, according to Consumer Economics.

    The rapid acceleration of this trend is leading IT to a tipping point. It won’t be long before businesses spend more on cloud-based infrastructure than on capital outlays for their own data centers.

    As companies move to deploy more cloud applications and outsource more of their IT infrastructure, CIOs will oversee a restructuring – and disruption - of their departments. Smaller data centers will require less staff to handle IT operations. However, there’ll be a greater demand for service managers, business analysts and IT financial managers, the study says. CIOs will also need to ensure that team members have the right skills to support cloud delivery of a range of services, making training an imperative.

    But even as the transition presents challenges, the benefits of moving to a cloud-based infrastructure are clear. Chief among them: lower cost. In fact, early adopters stand to benefit the most.

    “Our research indicates that companies that have moved aggressively into the cloud spend less on IT than organizations with more traditional IT,” John Longwell, Vice President of Research at Computer Economics, told Enterprise Apps Today.

    It’s easy to see why that is. By moving business systems – like their telephone systems -- to the cloud, organizations lower their costs for both data infrastructure and IT services. With outsourced solutions, the vendor takes responsibility for owning, configuring, and managing secure data centers. This eliminates the need for capital expenditures and frees up a company’s IT resources for more strategic initiatives.

    Additionally, an investment in a cloud phone system can extend IT savings as end-users manage their own voicemail, address book and personalized call handling settings via simple Web portals. And many vendors (Yes, ShoreTel is one) provide end-user support, thus eliminating the need for an in-house help desk.

    Finally, a cloud-based IT infrastructure offers early adopters a compelling advantage that can’t be ignored: competitive advantage. As more systems the shift to the cloud, the IT organization of the future will be cost-effective, lean and focused. Those that get there first will have a distinct edge.