Despite all the hype over cloud computing, a new survey has revealed that just seven percent of UK IT services or applications on average are in the cloud.

Companies only expect to increase this to 23 percent over the next two years, according to Cisco’s CloudWatch 2011 report. The networking company commissioned independent market research consultancy Loudhouse to survey 250 IT decision makers in large UK companies across five sectors on their attitudes to cloud computing for the report.

Ian Foddering, CTO and technical director at Cisco UK and Ireland, believes that the slow rate of adoption is due to the lack of awareness and education. “People won’t even realise they’re consuming cloud-based services [even when they use software like or Cisco WebEx],” he said.

However, the report shows that security and privacy concerns are still a top concern for organisations, with 76 percent of respondents citing it as a barrier to adoption.

This was followed by 64 percent of respondents who were concerned about location of data, while 62 percent said difficulties integrating with in-house IT were a barrier.

Foddering was surprised that security still posed such an issue to organisations.

“There is a perception that cloud is inherently insecure, but it shouldn’t be the case. There are many mechanisms out there to make the cloud secure. I hope that organisations can recognise the cloud can be secure and that we see concern for security dropping down,” he said.

Based on conversations with customers, Foddering said that he also expected the community cloud – such as the air transport IT specialist SITA’s community cloud - to become far more popular in the future, than it is forecast to be.

Only seven percent of IT decision makers surveyed believed that community clouds would be the likely dominant cloud in five years, compared to 47 percent who thought that the private cloud would dominate. Twenty percent believed the hybrid cloud would dominate, while only nine percent believed the public cloud would.

On a sector basis, however, although the healthcare sector still mainly thought that the private cloud would dominate (58 percent), the community cloud was more popular (14 percent).

Meanwhile, retailers were the strongest believers of the hybrid cloud (28 percent), closely followed by service providers (26 percent).