How UK companies have wasted more than £270,000 each on cloud services

Sungard AS research finds that cloud computing hasn't been the silver bullet that many organisations were hoping for

The vast majority of companies in the UK (87 per cent) have encountered some form of unplanned cloud spend, with each organisation forking out an additional £270,000 over the last five years on unforeseen costs.

Those unforeseen costs included the people to manage deployment (44 per cent), internal software maintenance (42 per cent) and systems integration (40 per cent), and did not include the average of £200,000 that each organisation pays per year to ensure cloud services run effectively.

The research, commissioned by IT, cloud and recovery services provider Sungard, found that a higher proportion of UK businesses had encountered some form of unplanned cloud spend than the European average (81 per cent).

Organisations typically deployed cloud solutions for what Sungard suggested was a "quick fix"; they believed it would achieve cost savings (57 per cent), increase their competitive advantage (41 per cent), increase business agility (40 per cent) and increase security (40 per cent).

Sungard said that despite cost savings being the biggest driving factor for deploying cloud computing, organisations in the UK, France, Ireland and Sweden had collectively spent an average of more than £486m a year on unplanned costs to make their cloud services as effective as possible over the past five years. The survey found that more than a third of firms had not achieved cost savings or lower day-to-day maintenance for the IT team.

Meanwhile, Sungard expects spending on cloud to continue to increase across the UK, France, Ireland and Sweden. Cloud spend has grown from an average of £350,000 in 2010 to £1.18m in 2014, it said. Of the organisations surveyed, 50 per cent agreed that the cloud has been broadly positive, but has not lived up to the hype. A third agreed that the cloud solutions they have deployed have not met their expectations and 36 per cent said that they have struggled with their cloud implementation.

Nearly half of all UK organisations (45 per cent) said that the cloud had in fact increased the complexity of their IT infrastructure. The majority (70 per cent) said that cloud computing had given them a new set of IT challenges; interoperability between their existing IT estate and cloud platforms was considered the biggest issue.

John Turner, IT director at accountancy firm BDO, said that one of the main lessons his business has learnt is that cloud is not a "one-size-fits-all" approach.

"Cloud computing is not the end result, it is a method through which organisations can achieve their business priorities - whether this is growth, increasing flexibility, deploying a mobile workforce or streamlining control of overall infrastructure," he said.

"Managed services have been essential in helping us make crucial IT decisions for BDO. We need a technology partner that we can trust - not only to help us develop the correct strategy but also in explaining the best options available to execute those plans and ensure we achieve our desired business outcomes," he added.

The research was conducted by Vanson Bourne, and involved interviews with 150 IT decision makers from the UK, 150 from France and 50 each from Sweden and Ireland. All businesses in the UK that were questioned had over 500 employees and had an average cloud spend of £700,000 in the last year.