Asia IT leaders more certain of cloud needs

SINGAPORE--IT leaders in the region have moved out of the experimental phase with cloud computing and now have a clear understanding of what they want from cloud providers as well as backing from the business's commercial and legal support.

Speaking at a media briefing here Thursday, Bill Fathers, president of Savvis, said the discussions with CIOs has been "radically different" compared to last year as the IT leaders know exactly what they want from cloud computing.

When purchasing cloud services, good CIOs are focused on business performance and are "armed to the teeth" with commercial and legal support of the company, said Fathers, adding that IT now reports to the CEO, not just the CFO.

Mark Smith, managing director of Savvis Asia, who was also present added that CIOs were still "experimenting" with cloud a year ago. Now, they are "more serious" about cloud and are adopting cloud-based mission critical applications, he said.

According to Fathers, cloud-based enterprise resource planning (ERP) is one of the most popular apps for companies in Asia. However, enterprises are not trying to convert all their existing apps to be cloud-friendly and are looking to adopt new cloud-enabled apps, he said.

Software-as-a-service for business analysis and business intelligence is among the new popular cloud apps. Fathers noted that SAP HANA and Oracle Exadata are popular tools for structured data. The unstructured data space does not have a dominant player as 20 providers are doing equally well, he added.

Biz bypassing IT to buy cloud services
Fathers noted that good CIOs treat cloud service purchases as partnerships with cloud providers, and not just a commercial transaction.

However, the president noted that one-third of his clients are business owners who bypass the IT department to purchase cloud services.

For some businesses, the IT department is seen as a constraint to business as opposed to a department to accelerate business growth, he said. Fathers noted that IT departments of financial services were "more conservative" while consumer and media companies were more forward-looking.

He believes that the financial services industry was more conservative as it is subject to financial regulatory changes. He believes 95 percent of IT spending for these businesses is devoted to complying with the law.

In order to take up jobs from the financial services industry, outsourcers have to become experts in regulatory changes as well. He added that Savvis currently has 15 employees whose role is to keep up with regulatory compliance.

Outsourced cloud adoption in Singapore to jump
During the briefing, Fathers also presented findings of a survey on IT infrastructure outsourcing trend. The study found that 98 percent of Singapore organizations planned to outsource the majority of their IT infrastructure by 2017, up from 58 percent that currently do.

The study, which is in its fourth year, was conducted by Vanson Bourne. The research firm polled 550 senior IT decision makers from enterprises in Singapore, Hong Kong, Japan, United States, United Kingdom and Germany.

Among Singapore companies with majority outsourced IT infrastructure, only 2 percent of the companies use outsource cloud. However, this figure is expected to grow to reach 74 percent in 5 years' time.

Some companies are still hesitant to move to the cloud, according to the study. The top three reasons include concern over how much management and control resource is required; anticipated difficulty of integrating with existing infrastructure; and legal issues about processing workloads in an unknown geographic location, the study noted.

Savvis also announced a dual-site hosing agreement with the Singapore Exchange (SGX). Smith explained that this will allow Savvis customers a closer connection with SGX's services, while providing a redundant facility for clients of the stock exchange.

Asia is an important market for Savvis which expects strong growth from the region, said Fathers. Out of US$500 million global investment, the company has allocated US$200 million to the region despite Asia contributing a single digit percentage revenue contribution, he noted.