Rackspace Study Finds One in Ten IT Teams Waste Over $100k a Year on Redundant Technology

September 22, 2015 (PRLEAP.COM) Technology News
SYDNEY, Rackspace® (NYSE: RAX), the #1 managed cloud company released a study revealing IT departments across Australia and New Zealand are spending big on redundant technology. Added pressure from the boardroom, poor ROI and outsourcing experiences are also key themes contained in the research from Rackspace.

A total of 252 IT decision makers across Australia and New Zealand participated in the survey, which was conducted by deciBel Research. The survey revealed that one in ten (10%) companies wasted over $100,000 a year on redundant IT, 13% wasted $50,000 - $99,999, and 25% wasted $10,000 - $49,999.

Boardroom pressure, release issues and poor hires
43% of surveyed IT decisions makers have experienced executive pressure to implement technology, even though they personally believed it was too risky for the business.

On top of this, almost half (45%) of medium[1] and 38% of large[2] surveyed businesses have released a version of software to the wider business/consumer that has caused issues.

It's not just the technology that is under performing. More than half (54%) of all surveyed businesses, and three quarters (77%) of medium sized* surveyed organisations have employed a member of staff in the IT team, only to realise after the fact, that they were a bad hire.

Technology not delivering on a promise
Almost three quarters (73%) of survey respondents reported making a poor purchasing decision, with:
  • One third (33%) purchasing software and 29% purchasing hardware, that didn't deliver what was promised to the business
  • 32% investing in software, and 31% investing in hardware, that became irrelevant within the intended lifespan

  • In fact, poor purchasing decisions are more prevalent than ever. 45% of survey respondents believed they were more likely to make a poor technology decision now, than they were ten years ago. This belief is even higher in Queensland, with 59% of surveyed decision makers fearing this is more common than in the past decade.

    "In a crowded market where new technologies are released at such a rapid rate, the modern day choice has become less black and white than it was a decade ago," said Angus Dorney, Director and General Manager at Rackspace ANZ.

    "It can be difficult to forecast if a purchase is going to deliver on its promise to provide your business with sufficient ROI. In some cases, this research shows that a lot of technology is purchased and never used."

    More than 41% of the surveyed IT decision makers polled have been responsible for purchasing or implementing technology that has not been used within their organisation. This happens more frequently in Victoria than any other State, where the figure is 51%.

    "In our experience, helping to ensure you're making the right choices when it comes to technology can come down to doing your research, taking the time to do an in-depth comparison of the available offerings and consulting reputable and experienced providers," continued Dorney.

    "If you do the ground work, you're more likely to have the foundation you need for a swift and seamless implementation, selecting the right technology for your business needs."

    Outsourcing experience
    Outsourcing provides an economical solution for many businesses when it comes to running critical technology outside of the team's capabilities. However, not all third parties are providing the levels of customer service and output expected by their clients.

    More than half (57%) of survey respondents have had a negative outsourcing experience from an IT service provider. The top reasons for re-thinking an outsourcing policy include:

    1. The service was badly managed (48%)
    2. Moving to a different provider (41%)
    3. The service continually went down (31%)
    4. There were security concerns (31%)

    When selecting an outsourcing service, creating a trusted relationship with the service provider is vital to ensure that you're business critical applications will be running in a solution that meets today's needs and tomorrow's growth.

    "Prior to Rackspace, our hosting provider had become a ticking time-bomb, we had an urgent need to migrate and needed to look into a cloud solution immediately. We needed a provider who could guarantee uptime, stability, page load speed and scalability," said Daniel Wright, Chief Digital Officer, Tyreright.

    "Before we'd even formally become a customer of Rackspace, I was receiving Fanatical Support. It's very reassuring, you gain trust quickly, because they know what they are doing and they take the time to deliver the best possible solution."

    Lessons from the let downs
    Teams are however learning from these mishaps, using them to shape their purchasing choices in the future. Almost nine out of ten (88%) of survey respondents report having learned important lessons from regretful decisions.

    These include:
  • Always have a second opinion (39%)
  • Better diligence in researching before implementing (38%)
  • Educate employees on the benefits of the technology being implemented (37%)
  • Methodology

  • Rackspace commissioned an independent online market research company called deciBel Research to undertake this piece of research. 252 IT decision makers from Australia and New Zealand were interviewed throughout August 2015.

    About Rackspace
    Rackspace (NYSE: RAX), the #1 managed cloud company, helps businesses tap the power of cloud computing without the challenge and expense of managing complex IT infrastructure and application platforms on their own. Rackspace engineers deliver specialised expertise on top of leading technologies developed by OpenStack, Microsoft, VMware and others, through a results-obsessed service known as Fanatical Support®. The company has more than 300,000 customers worldwide, including two-thirds of the FORTUNE 100. Rackspace was named a leader in the 2015 Gartner Magic Quadrant for Cloud-Enabled Managed Hosting, and has been honored as one of Fortune's Best Companies to Work For in six of the past eight years. For more information, visit www.rackspace.com/en-au.

    Forward Looking Statement
    This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Rackspace Hosting could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements about Rackspace survey results that may suggest trends for the industry; any statements relating to expected or predicted behaviors of consumers and the impact of cloud computing; any statements concerning expected development, performance or operational results related to any particular customer or customers of our customers associated with our hosting solutions; any other statements of expectation or belief directly relating to Rackspace business derived from the survey results; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include a substantial margin of error in the survey results, inconsistencies in respondent's understanding and Rackspace's analysis of survey questions and results, the possibility that expected benefits from any shift in consumer behavior may not materialize as expected; the achievement of expected operational results from any shift in consumer behavior; changes in the economy, technological and competitive factors, regulatory factors ; and other risks that are described in Rackspace Hosting's Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 10, 2015. Except as required by law, Rackspace Hosting assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

    Businesses with 50-200 employees
    Businesses with more than 200 employees
    Media Contact

    Dan Bleakman

    Joanne Schofield

    Share Article