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By | Paul Kunert 10th September 2014 15:54

Cloud? Nah, we're not bothering with that, say HALF of enterprises

IT departments lack the skills and suppliers still 'finding their feet'

As another distributor clambers onto the cloudy bandwagon, some research perhaps explains why the challenging sales progress of the fluffy white stuff has been slower than some tech wholesalers previously forecast.

IDC reckons that fewer than half of European enterprises have made necessary changes in-house to be able to consume technology as a utility, based on feedback from 304 organisations in the region.

The cloud is changing the way some organisations “evaluate, procure and deploy IT assets”, said Carla Arend, programme director of IDC’s Cloud Practice.

“However, the effective use of automation, self-service, and orchestration tools remains the biggest challenge for IT organisations, while accurately defining cost and implementing chargeback models is a struggle in the business and IT relationship.

“The transition to cloud computing requires change throughout the organisation - in people, process, and technology,” she added.

Some 56 per cent of IT departments cannot find qualified techies to “effectively” support cloud projects, 61 per cent are “struggling” to train staff to evaluate, negotiate and manage cloud service providers, and nearly three quarters are wrestling with ways to use automation, self-service and orchestration tools.

Distributors - all of whom make their money by dispatching physical goods - are looking for an answer to the new era of computing, and a bunch of them have developed half-way houses by aggregating and brokering vendor services.

But as of the end of last year, mass market adoption appeared some way off – quite some way off, in fact – with interest measured by quotations and demos yet to translate into cold hard contracts.

Enterprise distie Westcon bought its way into the cloud brokerage market last week when it splashed $12m on Veracloud, which aggregates services from vendors and manages aspects like provisioning and billing via a single portal.

Jeremy Butt, executive veep for EMEA, said it was not late to the market, because, in his words: “I am not convinced that anyone is making out like a cloud bandit at this time”.

The market is in its “infancy” according to Westcon – though private cloud is estimated to be worth $100bn a year. Issues like security and data sovereignty are weighing heavy on the minds of many risk averse large corporates, it adds.

The UK boss at Westcon, Tony Neville, said that in the same way his company is “dipping its toes in the water” with cloud, it is also “true of end-users and resellers” who are testing where the services work for them.

“Cloud is market driven, how receptive is the market to change?” he said, “Everyone in the supply chain is finding their feet, it will take time”.

Tech distributors grew up in a world where kit was checked-in, stored and checked out for a certain margin, whereas telcos sell products and services under a contract, putting them in pole position in the new world order.

This is according to Ian French, a veteran of IT distribution who now runs consultancy Siceo that advises organisations on how to develop services businesses, and agrees the industry is at the start of some huge changes.

“Cloud will happen, it is happening, companies have got through the stage of nervousness in the US so the market is accelerating, but Europe is behind.”

French said he could understand the nervousness among suppliers and IT directors: “Will you hit the button that could destroy the IT function that you’ve created over the last two decades?”

2014 was billed by industry types as the year that more cloud service providers start to crash and burn, as the cash haul from customers fails to keep pace with the cost of running systems and employing people.

IDC estimates that spending on cloud services and the building blocks for cloud environments grew 25 per cent in Europe over the last year.

“But the push from service providers might start running out of steam in the coming years if IT buyers and line-of-business owners are not assessed in their cloud maturity level and helped to systematically tackle hurdles to adoption, said IDC research manager Giorgio Nebuloni. ®

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