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Economy Mandates Shift to Cloud

May 9, 2012
By Rita Boland
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Economic winds are causing clouds to shift, or at least requiring organizations to shift their data to them. Mark Hurd, president, Oracle Corporation, kicked off Wednesday of the Defense Information Systems Agency (DISA) Mission Partner Conference by focusing on the financial reasons that drive information to the cloud and the need to reallocate money toward innovation. Information technology (IT) professionals, and the groups who use their services, are dealing with a situation full of data, legacy equipment and lots of challenges. The resulting complexity equals higher costs, yet over the next eight years IT budgets are expected to grow by only 1 to 2 percent, Hurd said. "Complexity has become the enemy," he stated. Sharing more numbers, he cited the worldwide gross domestic product as $55 trillion. Though IT only accounts for $1.8 trillion of that, it enables a large part of the remaining economic entities. Services, not products, are now the primary procurement of IT spending; for the first time, enterprises are paying more for services than for products. The result is a lack of capital for innovation. According to numbers presented by Hurd, if you combine the research and development dollars from the top three technology companies the total just barely surpasses the IT spending of a major bank. To meet the upcoming economic challenges, private and public groups will have to move their information into clouds where various facets of IT already are integrated. "This is not just an IT change," he explained. "It's an economic change. And it has to happen."

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