Moving IT to the public cloud could cost IT departments more than running services in-house, research from analyst firm Ovum has revealed.

Despite claims from suppliers that cloud computing will inevitably cut costs, businesses could find themselves having to pay more, said senior analyst Laurent Lachal.

"Every time you talk to a service provider, they tell you buy my stuff because it will lower your cost and boost your profit. It might be the case but you better do your calculations first," he said.

In reality, IT departments will need to invest heavily to integrate cloud services into their own IT structures, if they are to benefit from the flexibility the cloud offers.

"This integration and orchestration requires a lot of effort," he said. "You have got to think about integration at all levels, governance, management, process and data integration."

At the same time, IT departments will come under pressure to upgrade their own systems to match capabilities of the cloud, Lachal warned.

"One of the key challenges of the public cloud is for IT to keep up with the cost transparency and ease of use of the cloud, " he said. "In the public cloud, you know what things cost, while cost transparency is not something that many data centres yet deliver."

"The move from a data centre that is funded on the basis of an annual budget to a data centre that is funded based on the use of IT assets is a big challenge," he said.

Source: http://www.computerweekly.com/Articles/2010/11/25/244127/Organisations-underestimate-the-cost-of-cloud-computing.htm