Business

It remains to be seen if all clouds have silver lining

YOU could say that for the past few years the long-range forecast for the IT sector has been dominated by one word: cloud. Speculation has been rife about just how disruptive cloud solutions are going to be.

For those who don't know, 'cloud' essentially means storing and accessing data and programs over the internet instead of on a local computer's hard drive.

The evidence suggests that cloud is now becoming much more prevalent, with significant amounts of previously 'on-premise' IT infrastructure having been moved and consolidated into the cloud.

In the public sector, if you consider the sharp increase in uptake of the UK government G-Cloud initiative, it would seem that we are just at the beginning of something very significant.

G-Cloud is an initiative targeted at easing procurement by public-sector bodies in departments of the UK government of commodity information technology services that use cloud computing. (It will be interesting to see if a change of government this year changes this strategy, which has really only started to grow in the past 12 months.)

Similarly if you look at the uptake of Microsoft's Office 365 - the software giant's cloud-based email-hosting solution - it makes for great reading for those who are positive about cloud solutions.

Microsoft's commercial cloud revenue grew 106 per cent in 2014, driven by Office 365, Azure and Dynamics CRM Online, and is now contributing annually run rate revenues of US$6.3bn.

Amazon for the first time has also reported significant growth with its AWS (Amazon Web Services) cloud business unit increasing sales by 50 per cent. And with profit margins of 17 per cent it dwarfs the margins in its main retail business, which are just 2 per cent. Salesforce, one of the largest online providers of cloud-based software solutions, has burst through the US$5 billion revenue mark with a 32 per cent increase in sales in the past year and a determination to grow to be the fastest ever software company to reach US$10bn in revenues.

When you add up all these significant increases in revenue for the global players, it paints a sunny picture regarding the adoption of cloud technologies for small business, large enterprises and the public sector. Organisations are now developing a cloud-first strategy when it comes to rolling out new company-wide software applications. Contrary to all of that though, a lot of organisations are still making the case for why they can't quickly move into this new world. The main reasons quoted are:

* data security issues

* regulatory and compliance hurdles

* concerns over cloud technology evolution

* clarity regarding real business benefits

* lack of cloud strategy and governance

There is also a fear that contracts from cloud providers could be hard to negotiate and it may be easy to move in but what happens when you want to move out or over to another provider.

The future of cloud solutions is set to be an interesting journey for chief information officers, IT directors, IT managers and all their staff. It will undoubtedly provide great opportunities for some people's careers, but it may also create concern for some of them. The need to deliver a reliable and secure line of business applications will never diminish, but the location of the data and the servers driving them ultimately will.

Another hugely important factor will be the greater reliance on company networks as the data starts to get accessed from remote data centres across hundreds or thousands of miles, rather than down a piece of copper cable to the computer room only a stone's throw away.

Businesses in Northern Ireland can no doubt benefit from having a cloud strategy in terms of, for example, flexibility, the ability to work from anywhere, competitiveness, and perhaps most significantly the decreased need for capital expenditure.

At Novosco, we believe that things are moving slowly but surely towards a hybrid cloud world - an integrated cloud service utilising both private and public clouds to perform distinct functions - to ensure that businesses can achieve more robust and scalable IT platforms and at the same time retain all of the security measures.

What's for sure is that the IT world is going to see much thicker cloud cover in the next few years.

n Patrick McAliskey is managing director of Novosco, an indigenous Northern Ireland IT infrastructure company with offices in Belfast, Dublin and Birmingham. It employs more than 100 people and works for leading organisations across the UK and Ireland, including health trusts, councils and other organisations. It was ranked as one of the UK's top companies to work for in 2014 by The Sunday Times.

* CLOUDY OUTLOOK: In IT, it's all about the cloud these days