Continuing our series of articles demystifying the rhetoric on Cloud Computing and exploring the real value proposition for your business

  The risks

Are there risks in the Cloud approach –
and what’s the risk for your business if you ignore the Cloud altogether?  
by Mitesh Patel,
managing director, Fifosys Limited

In part one of our series, we looked at the many benefits of the Cloud approach for your business.  We like the benefits – but what about any downside risks, where does the industry see the Cloud going in the next few years and should you ignore the Cloud for now? 

  
You may have seen suppliers emphasising cost-reduction as the primary driver for a Cloud environment. Now of course we’ll all vote for lower costs, but in our view there’s a caveat here: if a supplier is only focused on cost measures, we think that’s a risk in itself.  We consider the Cloud’s benefits as significantly more wide-ranging, but we also appreciate the perceived risks from an approach that some have dismissed as merely “IT resource-sharing”.  Obviously your confidential business information, your intellectual property, your client lists – effectively your competitive edge – are not resources you would want to share!

So can a Cloud environment deliver the protection you want for your confidential business data?  Certainly it can – and we appreciate it’s important for you to be certain that you retain ownership of your data and that it will always be encrypted ‘for your eyes only’.  Your supplier should be able to demonstrate how their servers and applications are compartmentalised for your data.

The key message for protecting your business information, however, is that no matter where your data sits, whether it’s on your own computers in the office next to you or in a data centre miles away, all these machines need to be connected to the Internet and all need appropriate access security and firewalls.  The proximity of hardware to your business’s physical location will not of itself improve the safety or integrity of your data.  In fact, given the level of specialised physical security and access controls in the data centres we work with, we’d contend that data is probably safer there than anywhere else.

What about “access-anywhere”?  The concept sounds great for your business, enabling you and your employees to access your systems from any office, on the road or at home.  Is there a risk, though, that providing such ‘open’ access options can compromise the security of your systems or increase pressure on firewalls?  As with the previous point about data confidentiality, access-anywhere also depends on Internet connectivity. Therefore the speed and quality of the service depends on that final line connection into the offices where your computers are housed.  That’s your weakest link!  Realistically, delivering the bandwidth you need into your office could be a lot more expensive for your business than tapping into the comms infrastructures of a data centre that is custom-designed from the outset to handle significant levels of two-way data traffic.

Lastly, does a Cloud environment risk compromising visibility – literally knowing where your data is as well as being able to maintain a view across all of it?  When it comes to physical location, we appreciate that business owners want to know where their data is held and many will be required to know, for regulatory reasons.  We are always able to tell our clients where their data is stored.  It may be a Cloud environment, but it’s grounded on terra firma as far as we are concerned….. Moreover, all our clients are hosted in one of two centres in Maidenhead or Milton Keynes, which delivers the additional reassurance that our computers are based in the UK.

   
Far from restricting data views, we believe the Cloud approach can in fact enhance end-to-end visibility across your business data operations and performance, which in turn can help you improve customer service and quality at minimal cost.

So is the Cloud the future….?

 
Looks like it….a recent EU report into the opportunities for European Cloud Computing says that the Cloud has proven to be a major commercial success over recent years and will play a major role in the ICT domain over the next 10 years or more.  The report concludes that “future systems will exploit the capabilities of managed services and resource provisioning further”.

Analyst reports include forecasts that that the worldwide market for Cloud services in 2013 will be $44.2bn, with the European market ranging from €971m in 2008 to €6,005m in 2013 and 12% of the worldwide software market going to the Cloud.

 
… or should we watch from a distance and ultimately ignore?

The industry has clearly taken to the Cloud so what, then, are the risks of sitting this one out? When we assess the impacts for our clients of ignoring the Cloud, key factors include the continuing requirements for localised maintenance, sustaining power and bandwidth levels and keeping systems and skills up to date.  Most significant, though, is the growing demand for remote access to support the flexible working patterns and distributed mode of business operations that characterise the 24×7 global village.  For your business, this means being able to provide the right level of access for your employees in a secure, controlled (and controllable) manner.

Operationally, there are risks for you as a business in maintaining a single-site IT infrastructure.  You have the costs involved in protecting the environment locally.  You need to maintain arrangements with local engineers to ensure stability of your environment or maintain and develop the skills of your own in-house technical team. Having your own teams responsible for managing the infrastructure, application updates and all appropriate licensing arrangements means your in-house support specialists effectively represent a further single point of failure risk that you need to manage and mitigate.  Contracting other local suppliers can reduce your resourcing risk but means you need to manage multiple relationships and service level agreements.

 
Keith Foster, a business consultant who advises across a wide range of sectors, sums it up when he says “If companies ignore Cloud computing, a major risk is that they forego opportunities that their competitors take advantage of.  Moreover, there are no end of risks associated with small to medium sized companies trying to run their own computing services, particularly lack of security and lack of skills.”

All things considered – our view

Our experience shows that businesses have accepted risks unknowingly or knowingly simply as a result of the investment they have put into their IT environments. The bigger question, we believe, is why would anyone want the responsibility of running a non-core service in-house for something that they will struggle to manage, update and control?

 
So we say: don’t ignore the Cloud!  If you do, your IT will cost you more than it needs to – and you will have to continue accepting the risks of failure, limiting the operational efficiency for your staff and limiting the expansion potential for your business. Those risks, in our view, are the ones not worth taking…

 
Moreover, with a range of suppliers for different aspects of your IT services, who manages the growth and expansion of your data with all the associated security, integrity and capacity planning implications? In that disparate environment, who helps you develop a coherent strategy going forward?  We’ll examine the strategy approach of managed services and managed hosting environments in more depth in the next article in our series….