Companies evaluate cloud vendors most on their security and reliability/uptime capabilities – and far less on their price. This was the case in all four regions. In fact, price finished at the bottom of a list of nine factors in making the cloud application purchasing decision.
In determining how potential customers evaluate companies that sell cloud application services, it would be quite natural to conclude that price is at or near the top of the list of criteria. Isn’t one of the biggest benefits of cloud computing the ability to save immense IT costs from not having to fund the often enormous computing hardware costs required to run compute-intensive applications? Isn’t cloud about enabling companies to experiment with promising new applications without having to make investments in millions (or tens of millions) of dollars in servers and costly data center space?
Cloud is about that, for sure. Most companies said that the ability of a cloud vendor to reduce their IT costs was important. Yet the ability of a cloud vendor to offer rock-bottom prices doesn’t top most large companies’ list of buying criteria. In fact, we found “lowest price” the least important of nine factors that we asked executives to rate in two regions: the U.S. and Asia-Pacific. In Europe and Latin America, the ability to deliver the lowest-price services ranked eighth out of nine factors.
Rated far more highly were two criteria (among several): reliability (defined as the ability to keep applications up and running and available to users) and data security/privacy. They finished first or second in all four regions.
Other factors that finished high in importance included:
Possessing expertise in the legal and regulatory aspects of cloud. Large companies in the U.S. rated this third in importance (knowledge of such issues as country data privacy laws); European and Latin American firms rated it fourth.
Being willing to provide contract provisions on service levels, data privacy protections and other key performance expectations. This finished third in Latin America (rated important or very important by 84%) and third in Europe (71%). And it was fourth in the U.S. (68% said it was important or very important).
Adhering to the increasing number of technical standards for cloud computing. Some 68% of U.S., 66% of European, 78% of Latin American, and 74% of Asia-Pacific companies said this was important or very important. Such technical standards make it easier for customers to shift cloud applications from one public cloud vendor’s data center to another, as well as make it easier to share applications across a large company’s private cloud technology infrastructure.
This tells us that price isn’t unimportant to companies contemplating using applications in public or private cloud settings – but that other considerations matter much, much more. Making sure their applications are available for use and not at greater risk of being hacked top the list of companies in all four regions.