Software > Internet Based Software

The business case for the cloud

By Lasa Information Systems Team

Lasa's Ian Runeckles “attended” an online Virtual Cloud Summit, organised by V3.co.uk One of the sessions was a discussion on the business case for the cloud and was based on a recent survey by V3 on business attitudes to the cloud. Whilst, obviously, these were “businesses” that were responding, a similar survey of the third sector probably wouldn’t be that much different.

Cloud readiness and costs

At the Summit, Bert Van Rij, IT Strategist at HP suggested that by 2012 20% (a fifth) of all businesses would have all their ICT in the cloud. V3 discovered that 43% of companies surveyed hadn’t yet moved any part of their IT to the cloud and 28% had no plans to do so. 19% had moved some ICT to the cloud. So there’s some way to go to achieve that prediction…

Cost cutting was the overwhelming primary motivation to move to the cloud for 40% of respondents, with making life easier for business users in second place with 23%. Another common reason was to allow IT departments to focus on innovation (rather than supporting once the hosting function has been removed).

Cloud concerns

The main concern, unsurprisingly, was security with 74% of respondents marking this number 1. Availability of services was the second concern (54%) although the panellists discussing these results felt that availability is as good, if not better, than in traditional ICT set-ups. This was closely followed by compliance and regulatory issues (43%) and the complexity of moving from onsite IT services to hosted and governance (31%).

The cost of moving was a lesser concern as was the fear of having mobile devices lost (a consequence of making your applications and data accessible from anywhere with a wi-fi connection is that you need to be servicing and supporting mobile users more, perhaps a fact that is not highlighted enough). Concerns by IT staff over giving up control of the network was seen by panellists as an emotional reaction and concerns were not borne out by statistical evidence.

Cloud models

It was also pointed out that there are several cloud models – many only consider public (or consumer) clouds and there is a difference between them. The vast majority run on private clouds, with only 20% of business users were using 100% public clouds (e.g. Google apps). With a private cloud (also known as Infrastructure as a Service – IaaS), the business can control the rules. So-called “hybrid delivery”, i.e. part cloud, part traditional onsite client-server is common – always-on access tends to favour cloud applications rather than legacy apps.

For 70% of users, less than 20% of their company data is hosted in the cloud. The service that is most suited to the cloud was email with 64%, double that of CRMs which attracted 36%. E-commerce accounted for 34% closely followed by video conferencing, communications, product and customer  databases and finance applications.

The driver for hosted email was the Smartphone – “If I can get my personal webmail (Hotmail, Gmail etc) why can’t I get business mail?”. However, this seems a little odd to me , because, for example, Microsoft Exchange (probably the most common email system used in the sector) can be set to deliver to iPhones and iPads and I’m assuming also to Android mobiles. The calendar also happily syncs with the iPad calendar app.

Return on the cloud

Given that cost is a major factor in deciding to move to the cloud, were companies happy with the Return on Investment (ROI)? 50% were neutral and 25% were happy – only 1% were unhappy but 20% couldn’t quantify the ROI. It was pointed out that currently it’s hard to do that calculation because there were the metrics weren’t available – can you actually do ROI as, for example, a service is being rented rather than purchasing the hardware etc? Also, a point made by panellist and cloud service user Charles Baird of the London Theatre Company, small firms don’t have the time to do ROI calculations!

Green credentials

It’s a shame that the business cases surveyed by V3 here didn’t look at the environmental aspects – another reason which is heavily touted for the move to the cloud - which, to me, seems to be a bit of a red herring. The out-of-sight (or site), out-of-mind attitude appears to predominate – if I don’t have a server running in my server room, then I’m not using my power to run it therefore it’s better environmentally.

A statistic which the Summit’s closing keynote speaker, Matt Wood, a “Technology Evangelist” from Amazon Web Services, imparted with a certain amount of pride was that Amazon is installing the equivalent amount of server capacity every day to that which they had when they were a $2.7 billion enterprise in 2000. Every day! I suspect that their power is not all sourced from renewable sources…