Check this out - this is one of the major problems - http://blogs.wsj.com/digits/2016/02/16/cloud-computing-may-be-hampering-tech-spending-analyst-report/
Cloud Computing May Be Hampering Tech Spending: Analyst Report
While global economic problems have taken much of the blame for tightened tech spending lately, another culprit may be afoot: computing on demand delivered over the Internet.
Hesitance among chief information officers to commit to long-term hardware and software purchases may reflect the gradual shift from corporate data centers to so-called public cloud offerings from companies such as Amazon.com Inc. and Microsoft Corp., Deustche Bank analyst Karl Keirstead wrote in a research report.
“It is entirely plausible that this is having at least a marginal impact on the desire of large enterprises to sign material and multi-year commitments to on-premise technology suppliers,” Mr. Keirstead wrote.
Gartner research chief Peter Sondergaard made a related observation at the recent Wall Street Journal CIO Conference, noting that budget pressures are pushing corporate technology managers to take a close look at their options.
“I think many [CIOs] have benefited from pressures in central IT budgets, in that it has created opportunity for looking at different alternatives,” Mr. Sondergaard said.
Take Ted Ross, CIO of the city of Los Angeles. He needed to upgrade the technology that powers the city’s Business Assistance Virtual Network, the site where vendors bid for projects from various city agencies. Mr. Ross considered buying new blade servers to host the site. Instead, he decided to run the site on Microsoft’s Azure technology. He’ll halve his costs, and the migration should take four to six weeks, he said.
“It really seems it’s more judicious to make the investment in the cloud,” Mr. Ross said.
Mr. Keirstead noted in the report that Microsoft Corp.’s Azure has evolved into the clear No. 2 public-cloud platform behind Amazon.com’s Amazon Web Services. Microsoft’s cloud offering is good enough to appeal to a large portion of existing customers of the company’s on-premises software, he wrote, even though it has “70%-75% of the service breadth and functionality of AWS.”
“Not everybody needs every feature,” Gartner analyst David Smith agreed.
The competing Google Cloud Platform has slipped to a “distant” No. 3 in the market, Mr. Keirstead wrote, in part because customers and vendors said it was only good at niche services such as transmitting video content and processing big data.
Steven Rosenbush contributed to this article.