Cloud computing still risky / ITWEB

By Nicola Mawson, ITWeb senior journalist.
Johannesburg, 31 Aug 2010

A move to cloud computing is seen as an inevitable shift in the future, but many large organisations are reluctant to take the plunge, says Gartner.

Cloud computing is expected to grow from being a $58.6 billion industry last year to one that will be worth more than $148.8 billion in 2014, according to Gartner research. Companies will invest $112 billion in the cloud in the next five years.

Daryl Plummer, managing VP and Gartner Fellow, says the move to cloud computing is inevitable. However, there are still concerns around the safety of outsourcing key functions to a cloud provider, he adds.

Among the benefits of moving to computing in the cloud is the fact that companies do not need to invest in infrastructure or software, says Plummer. He says this allows firms to retire IT equipment, which typically depreciates rapidly. “It's not an investment opportunity to buy technology.”

Plummer explains that, although moving to cloud computing may require the same expenditure as owning equipment, there is a clear line of sight as to where this spend is going. Software as a service, for example, is often a pay-per-use purchase.

Risky business

Despite the apparent benefits of moving into a virtual environment, 70% of the companies Gartner surveyed, with 1 000 or more staff, have not developed a cloud initiative yet, says Plummer.

The reasons cited by these companies include security concerns over having information stored somewhere that is out of their control. In addition, firms are worried that there is no compliance reporting or audit trails once information is stored in the cloud.

Plummer adds that companies are also concerned about the quality and predictability of services provided in the cloud. In addition, if the company hosting the information folds, then that data will be lost, he says.

“Whose responsibility is it for your business when the failure happened three steps down the chain?”

Plummer points out, however, that CIOs cannot ignore the move to cloud computing. He explains that staff at companies are already making use of cloud computing, without CIOs even being aware of the shift.

“People are in the cloud for real, they aren't going back, it's not a fad,” says Plummer.

As a result, he says CIOs need to put a plan in place to manage the risks of moving into the cloud environment.

* Nicola Mawson was being hosted courtesy of Gartner.