A survey of 200 IT directors within large enterprise organisations has found that IT directors are worried about the potential management headaches of cloud computing. The Vanson Bourne survey reported that 71% of IT directors are concerned about the potential management complexity cloud services will bring.

Current maintenance, support and managed service contracts act as a barrier to moving IT services into the cloud among 57% of IT directors surveyed. Such contracts would lead to delays in them deploying some cloud services.

Often organisations will have three-year to five-year fixed-term contracts for in-house software or hardware maintenance and support. Many will be worried that if they migrate to a cloud model now they will still be committed to legacy contracts that they will not utilise.

If cloud adoption is to be accelerated, this problem must be addressed by suppliers and service providers. With the rate of change increasing, and new delivery and financial models coming to the fore, a more flexible approach to contracts needs to emerge.

The concern now is how to make it work for the business and how to manage cloud-based services once they are implemented.

Cloud interest sends BMC profits up 40%. Business software firm BMC beat Wall Street expectations during its second quarter, recording a 9% rise in revenue and a 40% jump in profits. It’s another sign that the IT market is growing again and spending is on the up.

The firm said that demand for cloud computing and hybrid data centres pushed BMC to its impressive figures. Revenue came in at $502.3m, up 8.8% from $461.8m a year ago. Revenue was boosted by a 37% increase in professional services and a near-20% rise is revenue from licences.

“Cloud computing is fundamentally changing the way customers are thinking about IT. BMC’s strong performance shows that we understand how to make cloud computing a reality today,” said BMC CEO Bob Beauchamp.

Bob; you are right. It’s only taken you how many years to catch on with the industry trend?

While the overall economy has offered mixed signals lately, many tech companies are reporting a rebound in corporate technology spending. But canny buyers are making best use of more cost effective SaaS solutions. More companies are looking to save money by signing up for cloud computing services like those offered by Salesforce.com, in which the company hosts client software on its servers and makes it accessible over the Web. That saves companies from having to invest in major server and disk equipment as well as the associated in-house support staff. 

The resumption of construction by Oracle at their huge data centre in Salt Lake City, Utah is a telling indicator of the scope of Oracle’s plans for on-demand software, as it comes even after the acquisition of Sun Microsystems and all its data centers.

So far, Oracle has just a handful of SaaS (software as a service) business applications, among them its CRM on Demand. It reported US$779 million in on-demand revenue during its fiscal 2009, a small fraction of overall sales. But Oracle’s SaaS strategy is set to ramp up this year, with the long-awaited launch of Fusion Applications, a next-generation suite that is supposed to combine the best attributes from its various product lines and feature a BI (business intelligence)-laden user interface. Oracle’s go-to-market strategy for Fusion Applications is carefully crafted to avoid alienating its large installed base of customers on legacy applications. These users won’t be placed on an immediate forced march to Fusion Apps, which will be available in on-premises form but is being developed as “SaaS-ready.”

The company realizes that customers have a “huge investment and commitment” tied to Oracle-acquired applications such as Siebel and PeopleSoft, CEO Larry Ellison said at last year’s OpenWorld conference. Oracle will continue to enhance those product lines “for the next decade and beyond,” Ellison said. Therefore, the Fusion Apps strategy is supposed to appeal not only to customers who desire the latest and greatest Oracle products, but also to these legacy users, who might want to consume Fusion a little at a time, perhaps in SaaS form.

Oracle’s CRM (customer relationship management) business is providing key evidence that increased customer demand for SaaS will follow. According to a US-based analyst company (Altimeter) ninety-two percent of the new Oracle CRM deals they have seen since January are for the on-demand version.

Footnote: when buying any hosted SaaS/Cloud solution, always confirm where your data will be held. Some businesses are uncomfortable if data is to be held off-shore.

IT management software firm CA is to acquire Nimsoft in an all-cash transaction valued at $350m, in a move to expand its presence in emerging enterprise and Managed Service Providers (MSPs) markets. Nimsoft has approximately 800 customers, including nearly 300 MSPs and operates primarily in the US and Europe. It provides unified monitoring offerings for virtualised datacentres, hosted and managed services, cloud platforms and SaaS resources. With the acquisition, CA expects to add an entirely new set of customers to its base, which has historically focused on larger companies, and also expand its presence in growing international markets, where it expects cloud computing and hosted/managed services to play a central role in business development. The world is on the move to cloud computing so be careful about signing any long term software licencing deals that don’t have an option to move to cloud technology.