Cloud Computing: Blocked by Investments in Legacy Software

More than a third of C-level executives say that the major reason why they are not considering cloud computing is because of their existing substantial investment in traditional on-premise software.  That’s one of the findings of the newly issued fourth report called Global Status Report on the Governance of Enterprise IT (GEIT)—2011, which was created and prepared by the nonprofit research group IT Governance Institute (ITGI), a research affiliate of the ISACA.

The reasons cited by the executives for not adopting Cloud Computing were:

• 49.6 percent – Data Privacy
• 47.2 percent – Security
• 41.7 percent – Reliability
• 34.6 percent – Legacy Infrastructure Investment
• 16.7 percent – Compliance

Ken Vander Wal, CISA, CPA, international vice president of ISACA, said that “Emerging technologies such as cloud computing and outsourcing can be managed effectively by integrating good governance over IT. Organizations need to adopt new service delivery models to stay competitive, and this is fueling a strong commitment to enterprise IT governance across the C-suite.  Assessing the value of current investments, building consensus among stakeholders and mitigating risk with third-party providers all require a comprehensive governance framework for organizations to be sure they are doing the right things and doing things right.”

One statistic is that as many as 93 percent of organizations outsource at least fully or partially some of their IT activities.  The report then drills down to find how much of that outsourcing activity is currently being outsourced and accessed via the cloud, and attempts to see whether executives are interested in future cloud-based outsourcing.   There is clearly a difference between mission-critical and non-mission critical operations.  Executives feel much more comfortable using the cloud for non-mission critical deployments than for mission-critical ones.

But the gap between mission-critical and non-mission-critical cloud deployments two may not be as big as you’d expect.  Right now 19.35 percent of companies were using non-mission-critical cloud applications while 18.35 percent were for mission critical.  The gap is larger among those executives considering how they will use the cloud:  41.35 percent are considering the cloud for non-mission-critical applications versus only 27.27 percent who are considering the cloud for mission-critical applications.