Cloud still not fully understood by customers, service providers

Cloud still not fully understood by customers, service providers

Summary: Cloud computing has become very topical in Asia, but the industry as a whole must address certain challenges if cloud is to become an integral part of every organization's business model.


Touted for its business and cost benefits, cloud computing has become a hot topic in Asia but enterprises and service providers alike have yet to fully understand the requirements and challenges of this delivery model. 

Over the last couple of weeks there have been several announcements relating to cloud computing that indicate a growing demand for cloud services, including in Asia.

There's still a lack of clarity about regulations and business requirements in the delivery of cloud services.

Last week it was reported that cloud computing investments in Malaysia will grow by more than 20 times over the next eight years to hit 2.8 billion ringgit (US$873 million), according to Forrester Research. Badlisham Ghazali, CEO of Multimedia Development Corporation (MDEC) said this area would continue to be a key area of development for the country's ICT roadmap. 

Respondents to ZDNet's IT Priorities research study in Asia, India, and Australia, also reported substantial planned increases in cloud budgets for the 2013 financial year compared to 2012.

Verizon Communications announced a new "on-demand" cloud infrastructure service that it claimed will enable companies to get the agility and economic benefit of the public cloud, "with the reliability and scale of a private cloud deployment". Microsoft also announced it had updated its enterprise cloud services with additions to Windows Azure, as well as a new Windows Azure Government Cloud for the United States.

Cloud computing has become very topical in Asia. Not only are new cloud service providers coming into the market, many more companies including financial institutions are now exploring cloud services as a means of reducing their cost base further. Traditional IT outsourcing has delivered certain commercial benefits, but cloud computing is seen as a means of delivering enhanced commercial benefits such as a significant reduction in capital expenditure and greater flexibility to meet rapidly changing business needs.

However, although the procurement of cloud services has many of the characteristics of a traditional IT outsourcing, the cloud services model is not very well understood by users. In addition, many service providers have been slow to recognize the data security, privacy, accessibility and portability challenges, as well as the requirements of multinational companies and regulated institutions.

There is also a web of regulation to consider, particularly the new personal data protection legislation emerging across Asia which will impose different requirements on data security and cross-border data flows.

In the financial services sector, there is a lack of clarity as to whether the implementation of cloud services by financial institutions is acceptable to the respective industry regulators, and the regulatory approach and focus adopted differs across jurisdictions.

Perhaps the mystique of the "cloud" has created the uncertainty and it may be time to focus more on the basic attributes of the cloud.

There is undoubtedly a growing need for potential cloud services users and the industry as a whole to take steps to address these challenges and requirements, if cloud computing is to become an integral part of every organization's business model.

Topics: Cloud, IT Priorities, Outsourcing

Ian JA Ferguson

About Ian JA Ferguson

Ian Ferguson is a partner at Olswang, specializing in commercial transactions including in relation to sourcing, technology, and telecommunications. He has advised on sourcing transactions involving business processes, IT services, communication services, and facilities management.

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  • cloud is stupid

    i don't get cloud computing . it takes forever to upload anything to a cloud server . then it takes an infinity to retrieve a file or download something that you put in the cloud . plus these cloud people want over 100 bucks a year for 100 gigs of storage ...... get real ... you can buy a usb 3.0 external one terabyte hard drive for fifty bucks and it is yours for life and works 30 times faster than any cloud server . what is it that the cloud people are offering ? it is way too slow ans way too expensive . i do not get it .
    • Cloud

      Perhaps it is your cloud service that is the challenge? Or your network? I use SkyDrive and it is just as fast and easy as saving to my hard drive. Plus, I have access to my documents from anywhere - including my phone. I do pay an extra $50 a years to get 100 gbs of storage which I use to back up my main computer. My concern with your external hard drive is that it may become corrupt, stolen, damaged and your data is lost. In the cloud, my data isn't going anywhere. As for security, read the terms and conditions of the provider. I chose Microsoft over Google because Google says that they can do anything they want with my data, Microsoft says it is confidential. NSA will get what they want no matter what. If they want pictures of my kids in the name of national security, I am okay with that. :)
  • The Big Issue

    The author has touched on some of the really big issues. While all of the benefits seem really cool, very few businesses really look at the security requirements for their data in conjuncture with public cloud services. For example, I noticed an ad for Goodle Docs where a police officer of some town was using the public cloud to hold critical data but LAPD in California did not sign a contract because the service was not CJIS-compliant. Regulatory agencies need to spell out their requirements for security in cloud-specific terms. We all know that the cloud providers are legally NOT liable for governed data such as HIPAA, CJIS, PCI-DSS, but that does not mean the cloud client is still not liable. What happens when some contractors put a medical facility's data (really, YOUR data) on the public cloud somewhere and there are people reading your data (in both the U.S. and all other countries) and doing whatever they want with it? If you read the TOS of most services, they do read everything you upload and can do with it what they want (including turning the data over to authorities or the NSA). These days, eveyone ignores this problem until they are caught.