UK public bodies spending £300m on 'unexpected' cloud costs, study finds

Out-Law News | 24 Sep 2015 | 5:37 pm | 1 min. read

Public bodies in the UK are collectively spending £300 million extra on cloud computing than they anticipated having to outlay, according to new research from an IT service provider.

Sungard Availability Services (AS) said 82% of UK public sector organisations have "encountered some form of unplanned cloud spend", according to its research. It commissioned interviews with 45 UK public sector decision makers in February on cloud computing issues.

The majority of respondents (60%) admitted to having "spent more on managing their cloud implementations than originally predicted", Sungard AS said. Other "unforeseen costs" being run up by public sector organisations that have adopted cloud-based IT systems were also identified.

"Sungard AS’ research revealed that one of the biggest issues associated with the management side is staying in control of IT costs when adopting cloud services (60% ranked this as a top issue)," it said. "Alongside costs, integrating cloud with legacy systems (62%) is also a key challenge. Though this is true for all organisations, the issue is probably more prevalent in the public sector, which is faced with integrating cloud solutions into a legacy infrastructure, much of which still supports business critical applications that cannot simply be migrated quickly to a cloud environment – if at all."

"From a cost perspective, more than three quarters of UK public sector organisations (82%) have encountered some form of unplanned cloud spend. Each is paying an average of just under £139,000 per year on maintaining cloud services and an additional figure of almost £258,000 over the last five years thanks to unforeseen costs such as external maintenance costs for hardware (41%) and systems integration costs to ensure applications can share data (30%)," Sungard AS said in a new report.

According to the research, 44% of public sector organisations view the task of achieving "interoperability between hybrid IT environments" as "their biggest problem" when adopting cloud-based solutions. Sungard AS said 42% of the people they interviewed "admit to having struggled with their cloud implementation" and 55% of respondents said they think adopting cloud services has "increased the complexity of their IT environment".

Half of public sector organisations that moved applications back from cloud-based systems to the "physical environment" do so "due to the complexity of operating a cloud environment", whilst 47% of those organisations cited cost reasons for migrating applications away from the cloud.

"In many cases, cloud computing was presented as a silver bullet for the CIO, a way to cut down on administrative processes and allow public sector IT departments to invest their time and resource in innovation and demonstrating technology’s role as an enabler of change," Sungard AS said. "Instead we can see that IT departments have as much admin work as ever before, if not more. The cloud hasn’t eliminated this maintenance work, and in fact, could even be said to have added more pressures for staff when ensuring that the system remains available."