The Future of the Cloud

As a UK member of ISACA as well as an industry analyst I was privileged to participate in a round table on the subject of the future of the cloud and the results of this were published in a supplement to the Guardian newspaper on September 27th.

Here is a summary of my thoughts on this subject:

The cloud is about efficiency and economies of scale.  The successful CSPs (Cloud Service Providers) will be those that can provide value for money to their customers.  For large enterprises the cloud will add complexity by becoming yet another platform to be accommodated.  However for SMEs the cloud can provide the IT services they need but could not run effectively themselves.  For start-ups the cloud provides a low risk opportunity to create new services.

The cloud is having an impact on conventional hosting services by creating what appear to be a cheaper and more easily accessible alternative.  The recent acquisition of SoftLayer by IBM shows that the existing IT hosting organizations and service providers will need to acquire cloud skills and technologies if they are not to lose out. I believe we will see consolidation in the market.

The cloud also provides a challenge and an opportunity for IT solution vendors.  Large CSPs can provide a more stable platform for these solutions than the vendors themselves.  Basing their solution on a cloud platform allows the solution provider to focus on their specific product and skills rather than on the challenges of running an IT service.  It also provides a great opportunity for new solutions to emerge.

However – it is not straightforward for organizations to migrate existing application to the cloud.  This is a limiting factor for the take up of the cloud by enterprises.  I expect that the market in services to help organizations migrate existing applications to the cloud will grow.

The major concerns that most organizations have with the use of the cloud relate to security and compliance.  The large CSPs have taken these concerns on board and, in general, offer IT services and infrastructure that are as secure as, if not more secure than, those which most organizations can provide for themselves.  There has also been a growth in CSPs providing services that are focussed on markets with specific areas of compliance.  However the standard contracts offered by many CSPs still provide limited liability in the event of failure of the service or for security breaches.

For organizations here are keys to successful exploitation of the cloud.  These are:

  1. Understand – at the board level what your business objectives are from exploiting the cloud.
  2. Set constraints – that limit the risks relating to security of your data and compliance with laws and regulations to a level that you are comfortable with.
  3. Trust the CSP but verify that trust through independent certification and monitoring of the service.

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