Cloud Computing – Potential Opportunities Despite Global Concerns


cloud-computingAlthough I’m not a big fan of “Cloud Computing”, but I have to admit that it has huge benefits that can’t be ignored, specially in today’s economical challenges facing businesses.

It’s good to start by defining what is “Cloud Computing”?

  • Cloud computing is a general term for anything that involves delivering hosted services over the Internet.
  • Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction

In a simple words, Cloud Computing is about transferring organization data asset to be hosted by a third party. It is similar to depositing your cash into a bank account. Historically, people were reluctant to accept the idea of transferring their money to a third party, which is similar to what IT professionals around the world is facing today.

Cloud Computing Concerns and Benefits:

Cloud Computing Pros and Cons
We can classify Cloud Computing major risks into three main categories, Technical, Manageability, and Legal risks:

TECHNICAL 

  • Privacy
  • Security
  • Recovery
  • Integrity (Data Segregation)
  • Data Location

MANAGEABILITY

  • Qualification of policy makers, operators and coders: Clients have the right to ask about the qualification of the staff at the service provider side.
  • Long Term Viability: What will happen to your data if the service provider become acquired by another company
  • Governance: there is no clear governance model that would satisfy all the clients, and its hard to come up with common governance model with clear roles and responsibilities between data owner and the service providers.

LEGAL

  • Regulatory Compliance (Standards, Law, SLA)
  • External Auditing and Certification: Does the service provider go through external auditing and do they hold any accredited certification
  • Investigation Support for illegal activities: it’s really hard to track and identify any illegal activities whenever it takes on the cloud, so the remaining concern is level of support you may get from service provider for investigation

Despite of above highlighted concerns, Cloud Computing has large amount of benefits that can’t be ignored

  • Cost cut-off
  • Financial Control: following the payment models of Pay as you go and Pay for what you need
  • Rapid IT deployment
  • Easier scalability of IT services
  • Improve business efficiency and effectiveness
  • Operates across national boundaries

Cloud Computing Adoption Globally:

Cloud Global Adoption

As illustrated in above diagram, many countries are taking actions to increase the adoption of cloud computing, through the enhancement of privacy laws and regulations designed specially for the cloud.

It’s interesting to find Germany, has restricted laws enforcing some data to be kept within the national boundaries of the country.

Although, those countries attempting to support innovative technologies, build robust supporting infrastructure by implementing broadband within their domestic boundaries, they are working on regulations, policies and standards rising to increase end users confidence toward “Cloud Computing”. At the end of the day it remain the decision of end users to decide on the cloud migration based on trade-off between its risks and benefits.

Cloud Computing As a Business:

Analyzing Cloud Computing using Proter’s Five Forces analysis, it’s found that Cloud Computing is an attractive business, thus we found that the largest technology players are making significant  investment in cloud computing (IBM, HP, Microsoft, Cisco, Oracle, EMC), in addition to the new small entrants such as Amazon, Saleforce, VMWare, and Google are investing in cloud platforms.

Porter's Five Forces AnalysisAccording to IDC Prediction for year 2014, Cloud spending, including cloud services and the technology to enable these services, will surge by 25% in 2014, reaching over $100 billion. It’s expected that the Cloud Computing will potentially generate $1.1 Trillion in annual revenue by 2015 and will create 14 million jobs world wide by 2015.

Who will drive Cloud Business in the Future?

By classifying the clients into three main segments, Large Enterprises, Government/Public, and SMB/SME. We can determine that the main driver for cloud business in future is definitely not Public/Government sector nor the large enterprises, due to the following reasons:

  • LACK of TRUST in Cloud Computing, as its stated in many researches, it’s found that trust is the main reason behind organization’s reluctance to migrated to the Cloud
  • Immaturity of Cloud services to meet their satisfaction and standards
  • Myriad of IT systems, which are hard and complicated to be migrated on the cloud easily
  • LACK of Motivation: as they have local capabilities and required fund to operate existing systems

So it’s anticipated that SME’s will be the main driver for Cloud business globally and their spending will be mainly in Public and Private clouds, as illustrated in below diagram.

Global Spending on IT System
Their investment in cloud solution will tackle three main areas of CRM, Web/E-commerce, and Collaboration.
Cloud Investment AreasAlso, its not surprisingly to find that Cloud platforms will penetrate Developing/Emerging market, due to the following standpoints:
  • Capabilities Standpoint: Clouds allow SMBs in emerging countries to gain access to sophisticated technologies (i.e. ERP & CRM) without necessary having the expertise in-house to manage them, and allow them to focus on running their business
  • Financial Standpoint: It contributes in significant cost saving

Cloud Penetration

Conclusion

  • Cloud computing is growing technological trend
  • Trust is more valuable than money and will eventually determine cloud computing’s success
  • Migration decision should be based on trade-off between its benefit and associated risks
  • SMBs will be the success path way for Cloud Computing
  • National standards and policies is a must to regulate cloud computing services, build trust, and ensure national security
  • Countries of “health economic condition” can benefit from cloud by building up national private clouds to save IT spending
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About aemadi

Qatari Information Technology professional. Who witnessed technology revolution back in 1995. Master in Business Administration, from Qatar University. Perfectionist and passionate about my country. Hopefully will leave thumbnail to this live.
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