UK Businesses Look to On-Demand ICT to Increase Competitiveness

New research conducted for COLT has revealed that more than 88% of major UK businesses expect to see an increased investment in on-demand services by 2009. Virtualisation and software as a service are set for rapid growth, with the majority of UK businesses intending to use them within the next two years.

Almost all of the UK businesses interviewed (94%) said they expect to increase investment in virtualisation and 88% in software as a service as they look to get more flexible and higher quality IT at lower cost. Cost reduction was seen as the top reason for using both technologies, whilst the ability to make better use of systems capacity and roll out new technologies more quickly were also seen as key benefits.

The research was conducted by independent firm Coleman Parkes on a pan-European basis. More than 400 IT Directors in 13 countries were surveyed: Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Portugal, the Netherlands, Spain, Sweden, Switzerland and the UK. The study focused primarily, but not exclusively, on four vertical sectors: financial services, media, government and professional services.

“A wave of business drivers including data regulation, globalisation and increased customer expectations are applying even greater pressure on the costs and efficiencies required to run business operations,” said Geoff Gilton, head of managed services products at COLT. “However, few organisations have the luxury to completely replace their existing IT infrastructure, or move to a fully virtualised, application on-demand strategy in the first instance. The migration path to a web-centric world is likely to be evolutionary, as our data confirms.”

The study showed that businesses have already embraced server virtualisation, with 68% already doing this as part of server and data centre consolidation programmes. Storage and application virtualisation are being used to a lesser extent today (by 56% and 40% respectively)

Gilton said, “Virtualisation is a crucial way for businesses to increase flexibility of IT assets and lower costs. We expect there to be a major increase in application virtualization over the next two years, as it enables businesses to align technology investments directly with business needs. It sets SLAs around the delivery of specific applications, such as email accounts and access to ERP and CRM systems.”

Taken as a whole, more people identified benefits than concerns with moving to an on-demand model. Among these benefits UK IT directors highlighted power as a key driver for virtualisation. In particular respondents highlighted reduced power requirements (66%) and greater efficiency of system capacity (92%) as reasons to adopt the technology.

Key concerns with virtualisation were that it will increase system complexity (62%), while 70% were wary of the negative impact on system performance and 50% felt they lacked the right skills. With software as a service, unsurprisingly businesses said their top concern was about security of their applications and data.

Gilton continued, “Virtualisation does increase system complexity for IT departments in exchange for savings and flexibility. There is a major role for managed services service providers, such as COLT, who have the right skills and data centre capacity, to take over that complexity and enable businesses to reap the benefits without the headaches.

“Similarly, if on-demand software is to become an industry standard for enterprises as well as consumers, it is going to be critical that service providers can maintain the integrity and confidentiality of customer applications – and build customer confidence.”