Cloud still not fully understood by customers, service providers

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.