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Underused cloud services are costing European enterprises £8.8m a year, or £24,000 a day, as organisations struggle to decide which workloads to run where.
According to the 2019 European insight intelligent technology index report, enterprise cloud users are running into difficulties when it comes to making the most of their off-premise deployments, as they grapple with trying to keep tabs on who is using what and where in their organisations.
The report is compiled from the responses of 1,000 IT decision makers from across Europe, including 200 from the UK, who were quizzed on their use of cloud and how it fits in with their company’s wider digital transformation plans.
It is compiled on Insight’s behalf by research house Coleman Parkes, and estimates that European enterprises spent a total of £29.48m on cloud services in 2018, but its findings suggest around 30% of this investment (£8.8m) went to waste through underuse.
Nearly half of respondents (44%) said some of this under-utilisation is being caused by the problems they face when trying to determine if the public, private or hybrid cloud is the best place to host their applications and workloads.
Additionally, 39% blamed the issues they face when trying to plan and allocate budgets for cloud consumption in their organisations, while around a third said their under-utilisation stems from having a lack of visibility about how off-premise services are being used within their walls.
“Combined, these findings suggest that organisations need guidance when it comes to monitoring cloud consumption, controlling their cloud spend and optimising their cloud investments,” the report said.
Given the foundational role that cloud is increasingly playing within enterprise digital transformation strategies, these are important areas to address and get right, the report continues, as organisations set about making better use of their data through the deployment of analytics, machine learning and artificial intelligence tools.
Indeed, 46% of respondents flagged AI, big data, machine learning and deep learning tools as being “critical” to their digital transformation initiatives over the past two years.
“When analysed, shared, and leveraged intelligently, [data] can facilitate more informed decision-making, improve the quality of offerings, and enhance the customer experience,” the report said.
“IT professionals express confidence in AI, big data and machine learning because these technologies enable organisations to transform data into business intelligence.”
But this confidence could prove to be misplaced unless organisations have a robust cloud strategy in place to underpin their plans, the report added.
“A solid cloud strategy is integral to navigating and building a high-performing data environment. Cloud promotes greater flexibility, agility, scalability of infrastructure and services, plus real-time decision-making, among other benefits,” it said.
Wolfgang Ebermann, Europe, Middle East and Africa president for Insight, said cloud continues to be a “mission-critical enabler for agile and digital business”, but only when it is put to use correctly within enterprises.
“Under-utilised technology has been a problem for decades, so it’s not surprising to see the problem spread to the cloud. However, by putting the right controls in place, organisations can optimise cloud consumption and ensure they only pay for services they are using,” said Ebermann.
Read more about cloud use and adoption trends
- The financial services community has gone from being one of the least likely sectors to adopt cloud to becoming one of its keenest users, as regulator attitudes to using the technology have become more accommodating.
- While Amazon, Google and Microsoft all claim to be picking up customers in every conceivable vertical market, it is the retail sector where the competition between the big three cloud giants is really starting to get interesting.