NZ companies moving to the cloud en masse

Cloud computing is the single most disruptive technology facing all organisations today. 

It is real and it is here; 100% of New Zealand organisations intend to invest in cloud-based services in the next 12 to 18 months according to the recent IDC Cloud Survey (IDC Asia Pacific Cloud Survey - April 2013). 

Coupled with mobile solutions, big data, analytics and social business there is an operational transformation taking the world by force. 

Cloud helps organisations to be more efficient in use of time, money and other resources while enabling more effective ways in which they reach their customers. However, as in the world of meteorology, clouds don’t appear without a certain degree of danger. Cloud presents a level of risk that must be considered and managed appropriately.

Cloud is a delivery model built on a set of technology and services (hardware, software, connectivity and people) that leverages a centralised investment of scale to provide customers with a highly elastic consumption model at a granular price (Cloud is often termed “as a service”). Essentially, cloud providers build a single solution and offer it to many customers in many locations (local and global), at a reasonable price, providing the same or similar consumption experience to all. 

Organisations evaluating when, where, how and why they should consider cloud computing services must first understand that cloud computing spans a wide range of IT-enabled capabilities, from low-level infrastructure to high-level business processes. Because of this the organisational willingness to adopt cloud services is prolific. 

Reducing expenses
IDC’s CXO survey (June 2013) of chief information officers, chief financial officers and chief marketing officers shows cloud services are the top technical initiative to reduce expenses, accommodate budget adjustments and deliver growth and higher revenue opportunities. 

All organisational departments understand the opportunity that cloud offers. They all agree that there is an opportunity to become more agile and dynamic and all see the opportunity to become more connected with the customers and the organisation’s supply chain. 

Know the risks
The challenge of using cloud to its best advantage lies in understanding the associated risks. Where is your data (your organisation’s intellectual property and DNA)? How secure is your IT and who has access to your IT infrastructure and information? 

The recent media surrounding the open acknowledgement that – at least at a government level – there are those that will access the information if deemed necessary created a lot of discussion regarding the value of cloud. 

There are other important considerations based on the availability of the service, the accessibility of the information both during the service and when you decide to shift suppliers or should the cloud provider cease to exist. The risk with cloud is you trade a level of control of your information and the ability to understand where it is at a point in time. 

Ask two questions
When evaluating this risk, an organisation should determine a value for its information and the collective intellectual property of its operations. This value can be applied to the associated risks of cloud by asking two questions: how can you operate without the information and what would happen if the wrong party gained access to the information? 

With this awareness a set of governance policies about how and when cloud can be used should be developed.

Beyond the geeks
The responsibility to establish these policies on cloud lies across the organisation. It is no longer the sole responsibility of the chief information officer (CIO) to articulate the boundaries of the use of technology. 

Senior executives and organisation owners must participate in the process and actively manage to the agreed governance process. The role of the CIO therefore becomes the enabler of the technology, supporting the governance model and, more importantly, assisting the organisation to be more effective with its customers. 

The CIO must also work to support the organisation in becoming more connected and less rigid in its structure as this drives organisational agility.

From a technical perspective, IDC recommends the following steps for considering the cloud for all organisations:

• Understand the different cloud service delivery models and how they are best applied to your environment, and assess your organisation’s ability to implement cloud services without external help.
• To start developing experience in cloud computing, evaluate opportunities for low-risk, non-mission-critical applications to benefit from cloud-based infrastructure and development services but exploit cloud computing services selectively based on potential business value and cloud service category maturity. 
• Thoroughly understand the possible degree of proprietary lock-in and develop plans to move to alternative providers or internal systems, if needed. 
• Establish governance models and guidelines for evaluating cloud-based services and their integration with internal systems.
• Plan for integration of cloud management and security with existing enterprise tools and processes

Adam Dodds is market researcher IDC’s IT Services Research Manager; Chris Morris is associate vice-president, IDC Asia/Pacific