Has your business got its head in the cloud?

Over the past 12 months there has been a lot of talk about cloud computing. Vendors have been hyping up how they will deliver their services from the cloud, while organisations have been gushing about the potential cost savings and productivity benefits they’ll reap. While companies that need speed to market, or SMEs with smaller IT budgets, may see cloud computing as a Godsend, like any technology adoption it is essential to look before you leap.

You’re only as strong as your provider’s servers

 Businesses using cloud computing are completely dependant on Internet connections in order to access their applications. In particular, they are at the mercy of cloud computing providers in terms of application uptime as applications are hosted on the provider’s servers. It is therefore important to establish a service level agreement (SLA), backed up with meaningful penalty clauses. Your path to the clouds suddenly becomes one of the most critical components of your IT delivery, and as such needs multiple levels of resilience and redundancy to keep your business processes safe. We’ve all heard of Escrow agreements to safeguard us if there are issues with a software supplier, but what is your equivalent course of action for a software-as-a-service provider?

Customisation conundrum

 Many larger businesses use applications which have been customised to meet their specific needs. However, when the same application is delivered through cloud computing it may be more difficult, or even impossible, for the same application to be customised. If the application can be customised, this is likely to be expensive, and there is a question of ownership of this work should you need to exit the service provider.

 Compliance concerns

Cloud computing also has ramifications when it comes to compliance regulations. For example, the UK has data protection laws which don’t really take into account vendors using server environments based outside the EU. However, the cloud computing model means businesses don’t have the same visibility of which server their data is stored on, or where the server is located compared to if they hosted their own servers. This makes it impossible for a proper risk assessment to be carried out. If businesses using cloud computing don’t know where their data resides, it will be impossible for them to comply.

The issues outlined above mean that larger organisations are still wary of cloud computing and are choosing a watching brief for now. However, this does mean that they will be missing out on the benefits that it can bring. One way of getting the best of both worlds is to implement a hybrid model. This model has been introduced by some vendors including SAP, which has been criticised for being slow to adapt its solutions to the cloud. Yet by taking their time, these vendors have come up with an innovative approach which sees businesses have some of their processes in the cloud and others within the business. This approach means that organisations don’t have to put their business critical processes in the cloud if they feel it is too risky. However, by putting less critical processes in the cloud they can still reap the benefits that this approach can bring.

While cloud computing offers some exciting possibilities and allows businesses to run applications without a large initial outlay, clearly businesses must do their due diligence to endure that it is suitable for their organisation.

Here at the User Group we are currently surveying our membership regards their thoughts on cloud computing and we will be sharing the results over the next couple of months – so watch this space!

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