Enterprise data won't go to the cloud

Enterprise data is unlikely to exist in the cloud due to regulatory issues and bandwidth costs, according to an Open Text executive.

Chris Petersen, director of channels, Asia-Pacific, Open Text, said in an interview with ZDNet Asia, companies will still store a large part of data in-house, in spite of the hype surrounding cloud computing.

Petersen said customers still demand on-premise software, and cited regulatory compliance and the higher bandwidth costs associated with moving data offsite as substantial barriers to mainstream enterprise adoption of cloud computing technology.

Therefore, cloud computing will not pose a threat to ECM (enterprise content management) players such as Open Text because the need to keep thorough records of in-house data will persist, he said.

"We wouldn't see customers saying there is no need for data management because they are going to the cloud," said Petersen.

Wei-Seng Kan, regional vice president, Open Text Asia, said the ongoing financial crisis is shedding extra light on regulatory compliance issues, which is helping to drive the need for ECM, in turn.

Governments calling for stronger financial regulation in the United States will create the push for companies there to invest in keeping more detailed records. This is expected to affect both Asian legislations and companies in time, said Kan.

Petersen said: "Regulatory compliance is not as stringent yet in the region, but awareness is growing."

This trend will take time to translate to the ECM market in the region, nonetheless. Kan said the financial crisis would promote ECM in the long run, but makes it "difficult to forecast" Open Text's business for next year, with uncertain spending from customers.

ECM adoption picking up in SMB sector
Thanks to the growth of digital content, ECM, is increasingly being adopted by SMBs in the region now, said Petersen.

Traditionally thought of as a product to handle the greater amount of data in larger enterprises, the growing digital assets generated by smaller companies is creating an "explosion" of content that has to be managed, he said.

Petersen offered the example of a mining company which would have extra data such as photos to archive and process, in addition to the traditional text-based records.

"SMBs are getting more content management savvy," he said.