Lack of understanding of ‘cloud computing’ potential impacts widespread adoption
Despite the fact that cloud computing provides opportunities for all organisations to change the way in which they provide the business with information technology solutions, almost three quarters (74 per cent) of IT managers from across the UK think that ‘cloud computing’ is not at all relevant to their business, according to a new study by Protiviti, an independent risk consultancy and internal audit firm.
Jonathan Wyatt, managing director, Protiviti UK said, ‘It’s surprising that so many IT managers appear to see no value in cloud technology. The cloud takes the opportunities presented by outsourcing to the next level. Emerging technologies and cloud services provide all organisations with opportunities to change the way they operate and ultimately to improve performance whilst reducing cost.’
Currently just under one in 10 (eight per cent) IT managers surveyed said that their business is using the cloud for one or two services, while just three per cent of firms have adopted it widely across the business. The companies most likely to be using cloud related services are larger companies and those operating in the services sector. However, Protiviti noted that many organisations do not have a clear strategy for cloud computing.
According to the research, security is the biggest barrier to the widespread adoption of cloud services, followed by data privacy. Other barriers to adoption identified include concerns over reliability and availability of services and concerns over business recovery, in the event of failure of a cloud provider.
But Protiviti warns that while these areas of risk need to be taken seriously, there are significant benefits, and businesses can take advantage of the opportunities whilst managing the risks.
Jonathan Wyatt added, ‘Concerns over security and data privacy appear to be overshadowing the potential benefits offered by the cloud. Businesses need to be more creative about how they think about the cloud and the opportunities it presents. At a time when companies are looking at ways to grow whilst keeping a lid on costs, cloud computing offers a way to significantly reduce overheads and to allow supply to be more directly matched to demand.’
Protiviti’s research reveals that only three in 10 firms are planning to use cloud computing over the next three years, with 16 per cent looking to develop a private cloud service and 10 per cent considering using a public cloud service. The remaining two per cent of IT managers say that their firms are currently looking at joint venture, semi-private cloud services.
Lack of skills and understanding is perhaps the most significant barrier to widespread adoption. Protiviti recently released its 2011 IT Capabilities and Needs survey, where cloud computing and virtualisation were identified as two of the top three areas where companies recognised a need to improve.
Jonathan Wyatt continued, ‘All businesses should start to experiment using the cloud in low risk areas. Software as a service, focused on non-business critical applications and platform as a service, for development and test, are good places for people to start. Experimenting in these lower risk areas can provide IT departments with immediate savings, and also enable the business to develop the competencies required to respond to new opportunities as they arise.
‘We are already seeing many of our clients reaping the rewards of cloud technology by procuring additional capacity at times of high demand. For example, online retailers are now able to meet seasonal demand for orders without having to commit to a significant capital outlay to meet peak demand all year round.
‘There also seems to be a fundamental lack of understanding among many IT managers as to exactly what cloud computing is, let alone how to make best use of it. Many firms will already use some form of cloud technology for CRM or other marketing services but in many cases, the IT department is unaware. Such ignorance is itself posing significant risks to the business.’
Protiviti is currently working with many organisations around the world to help them understand the potential impact of cloud computing, establish a strategic response to the potential opportunities it presents, and define policies and procedures that manage the risks associated with its use.