Category Archives: Sungard

Hidden cost of public sector cloud over £300m a year, says research

The UK’s public sector is spending an extra £300 million a year on maintaining cloud services and on hidden costs associated with their cloud computing projects, according to Sungard Availability Services.

The claim follows an independent study, commissioned by Sungard, that questioned 45 senior IT decision makers in the UK in public sector organisations with more than 500 employees. The average individual cloud spend of the study group, in 2014/15, was £390,000.

Sungard’s analysis of the research appears in a report, Digital by Design: Avoiding the Cloud Hangover in the UK Public Sector, which claims that unexpected costs and increasing complexity will create a ‘cloud hangover’.

The main revelation of the research is that 82 per cent UK public sector organisations (according to the study group of 45 decision makers) have encountered some form of unplanned cloud spend. The average yearly cost of maintaining cloud services (among the study group) was £139,000. A further £258,000 was spent by each, over the last five years, on unforeseen costs. External maintenance costs for hardware accounted for 41 per cent of these unexpected costs, while systems integration was the other major contributor to bill shock, accounting for 30 per cent of the unbudgeted expenditure.

According to the report, 42 per cent of UK public sector organisations use the cloud to lower the work load for their ‘IT team’, while 47 per cent expect the cloud to reduce IT costs. Some 43 per cent of the public sector’s cloud customers are allegedly struggling with the costs of personnel needed to manage cloud deployments.

Roughly half (53 per cent) of all UK public sector organisations said cost savings were the key driver for adopting cloud services, but 33 per cent believe this has not been achieved. Over half (55 per cent) of all UK public sector organisations (claims the report) complain that the cloud has increased the complexity of their IT environment and 71 per cent say that cloud computing added a new set of IT challenges. Achieving interoperability between existing IT and new cloud platforms was the most frequently mentioned challenge, cited by 44 per cent of the survey group.

“There is no silver bullet for adopting cloud computing,” said Keith Tilley, executive VP of Global Sales and Customer Services Management at Sungard Availability Services, who called for a case by case review.