In the News
The energy factor
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Mr Brian Prentice: When you have a business where a significant cost component is highly volatile … then you do what the airlines have done – take that cost component out and price it as a surcharge or levy. |
Pay an energy surcharge for the use of cloud services? That is where Gartner thinks the industry will be heading, as energy shapes up to be one of the most significant – and volatile – cost components in the delivery of IT services.
The research firm predicts that by 2015, prices for 80 per cent of cloud services will include a global energy surcharge. “When you have a business where a significant cost component is highly volatile and subject to changes, and you cannot keep changing your product prices, then you do what the airlines have done – take that cost component out and price it as a surcharge or levy,” said Mr Brian Prentice, Gartner’s Research Vice President focusing on Emerging Technologies and Trends. “That is a sound general business strategy if you are in this market.”
Enterprises can therefore expect to see energy costs included as a variable element in future cloud service contracts, and they will have to factor the increased risk and volatility into the decision to move towards externally-sourced cloud services, said Gartner.
At the Gartner Predicts 2012 event in February, the cloud continued to put its stamp on other business technology projections for the year. According to Mr Prentice, it is one of the forces that are fundamentally changing IT as an industry and the decisions that are being made in the enterprise IT space.
One of Gartner predictions is that by 2015, 35 per cent of IT expenditure will be managed outside the IT department’s budget. A significant part of this has to do with the fact that cloud computing will garner a greater share of the IT budget that is set aside for the day-to-day running of an organisation’s IT operations. For example, it is projected to take up 20 per cent of IT budgets by 2015. With this, the nexus of IT decision-making will shift as well. “Finance, marketing and human resource management will be key stakeholders in 25-30 per cent of cloud sourcing decisions, directly funding those cloud projects,” said Mr Prentice.
The growing presence of the cloud is such that by the end of 2016, Gartner predicts that more than 50 per cent of Global 1000 companies will be storing sensitive customer data in the public cloud. “With the public cloud, there is an economy of scale that is impossible to replicate unless you are a massive global-class enterprise,” said Mr Prentice.
To take advantage of this economy of scale, organisations will have to balance risk against agility – investigate jurisdiction issues and thoroughly evaluate compliance and security procedures, said Gartner.
From the security standpoint, the growth in cloud services will present a significant new attack vector, alongside the growth in employee-owned devices. In Gartner’s view, the financial impact of cybercrime will grow 10 per cent a year through 2016, due to the continuing discovery of new vulnerabilities. “As we go through major shifts in technology, there is always a new set of vulnerabilities to deal with,” said Mr Prentice.
Going forward, Gartner expects that a growing number of enterprises – an estimated 40 per cent by 2016 – will make proof of independent security testing a precondition of using any cloud service. They will demand assurances that cloud systems have been independently tested for vulnerabilities and seek cloud service brokerages that demonstrate proficiency in security inspection, auditing and certification.