The Tech Herald

Study: Poor cloud performance costing businesses

by Steve Ragan - Sep 14 2010, 18:05

Research from Compuware, an application performance management company in Michigan, says that European companies are losing nearly a million dollars per year due to poor performance in the cloud.

Compuware spoke to 300 European IT directors in large enterprise organisations with over 1,000 employees. The result of those talks concluded that annually they're losing €608,000 EUR (roughly $781,000 USD) due to performance-related problems with e-commerce sites and Web-based business applications.

Until the performance issues are resolved, 57 percent of those polled said they'll slow or stop further adoption of cloud-based services. The study also showed that 72 percent of respondents said performance issues, and the nature of the hosted services themselves, restricted them from fully guaranteeing services to customers.

“Although organisations understand the flexibility and cost benefits of the cloud model, this research indicated that further adoption will be severely hampered unless cloud performance management is tackled,” said Richard Stone, cloud computing solutions manager at Compuware, in a statement.

While the research looks bad for cloud-computing providers, it isn’t. Most of those who talked to Compuware understand that they need to demand more in their SLAs and stay on top of vendors when it comes to performance and security.

An interesting note in the press release from Compuware said that the IT managers surveyed trusted that their IT teams have the skill needed to “negotiate the more end-user oriented SLAs needed for cloud services.”

If this is the case, then the overall point of the data released is simple: if you don’t want to risk losing money due to operational concerns, get to know your vendor. Moving to a cloud-based offering does nothing for a business if the service supplier can’t keep up.

Sadly, cost is still king in business. It’s the budget, not the SLA or IT team recommendation, which will determine vendor selection for hosted services.

In this case, the experts The Tech Herald has spoken to maintain that using IT as a business function alone, and not including it into the business model overall, is a bad idea.

The $700,000 USD hit to the bottom-line makes the point loud and clear.

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