By Matthew Broersma
KPMG has found that U.K. businesses are still reluctant to sign up for cloud services, preferring to stick with familiar outsourcing methods.
The study, which analyzes nearly 2,100 contracts worldwide worth £7.8bn, including 330 U.K.-based contracts, found that 71 percent of U.K. organizations are spending only 10 percent or less of their IT budgets on cloud-based services.
Twenty-six percent of U.K. executives cited issues with data location, security and privacy as their reason for holding back on cloud spending, while another 16 percent cited regulation and compliance and 15 percent said they did not believe cloud technology could easily integrate with legacy IT.
Companies' security concerns may be "disproportionate," KPMG said.
"Cloud options are just as safe as other outsourcing solutions," stated Jason Sahota, director in KPMG's Shared Services and Outsourcing Advisory team. "Of course, investors and stakeholders will welcome caution on the part of the buyers, but they also want to see innovation, meaning that U.K. plc will need to find the right balance to remain competitive."
Amongst companies sticking with familiar outsourcing methods, KPMG found that IT support services were sourced primarily from India, with 51 percent, followed by Poland and South Africa, both with 8 percent.
The study found that organizations' reasons for outsourcing are "maturing", with companies shifting away from a desire merely to cut costs.
In the current study, 20 percent said they were looking to improve quality, while 16 percent wanted access to skills and 6 percent wanted to reduce time to market.
Seventy-seven percent said they were "comfortable" with the support they receive.
The findings were published on Monday in KPMG's eighth annual "Service Provider and Performance Satisfaction" study.