'It's all about pragmatic tradeoffs'

'It's all about pragmatic tradeoffs'

Ovum debunks common misconception on data sovereignty as major barrier to enterprise adoption of public cloud services.

Enterprise adoption of public cloud services is based mainly on realistic trade-offs and perceptions of risk have been exaggerated, reports Ovum.

Practical and balanced assessments of the risks and benefits allow enterprises to see value in public cloud services, says Dr Steve Hodgkinson, research director for Ovum’s Asia Pacific IT research and advisory services.

While enterprises’ use of public cloud services is now widespread and growing in Australia and New Zealand, perceptions of risks have become somewhat overstated as a result of cautionary statements made by regulators and security authorities, states Hodgkinson in a new Ovum report. The report draws mainly from results of ‘off the record interviews’ with 10 corporate and government enterprises.

“The practical reality is that many enterprises in both the private and public sectors are using public cloud services every day and regard them as a useful addition to the ICT portfolio,” he says.

The report cites proof of widespread adoption of public cloud services in ANZ include Salesforce’s thousands of customers across large corporates, SMBs and government agencies; and adoption of Google Apps by corporates and government agencies like the New Zealand Post, Flight Centre and Monash University.

The report debunks the common misconception that data sovereignty issues are a major barrier to the use of these services. While it found concerns over data security and regulatory compliance were taken seriously, these were not viewed as “showstoppers” as long as careful thought is given to the categories of data that will be stored in the cloud and to identifying specific risk factors and contractual and process mitigations.

Hodgkinson points out public cloud services were typically not chosen to save costs. In most cases, the service was selected because it was better and faster, even though some changes to information management practices may have been required.

The report recommends enterprises approach the use of cloud computing from a strategic perspective, rather than a tactical or narrow cost-cutting perspective.

A strategic approach, it says, requires a “warts and all” analysis of the strengths and weaknesses of the in-house ICT operations and capabilities and how these are projected to evolve, and the strengths and weaknesses of cloud services and how these are projected to evolve.

The report also calls on ICT departments to rein in “stealth” cloud adoption and bring public cloud adoption under normal ICT governance arrangements, particularly in the financial services and public sectors.

“We can be sure that auditors and directors will pay increasing attention to this over the next year, so CIOs are recommended to get onto the front foot in order to be able to deal with issues proactively rather than in a crisis,” writes Hodgkinson.

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