Cloud computing: Worth the risk?

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Cloud computing is all but everywhere right now. Whether it’s Apple’s iCloud, Amazon’s EC2 or the idea of a public sector G-Cloud, the hype and jargon surrounding cloud computing can quickly become disorienting.

But the technology behind the cloud is not actually that new. What is new, however, is the cloud's acceptance as a mainstream business tool.

Understanding what the cloud means is one thing. But businesses may well be left wondering whether the benefits outweigh the inherent risks of “putting your data out there.”

Businesses should, first and foremost, look at the cloud as a way to steal a march on their competitors, suggests Sam Johnston, director of cloud and IT services at Equinix, a provider of enterprise data centre services. "Cloud computing allows companies to apply technology to business problems and in doing so, use technology as a differentiator from their competitors rather than an unavoidable cost of doing business.”

The majority of IT spending by business still goes towards "keeping the lights on", Johnston explains. Companies should use the cloud to avoid the most “challenging, expensive and yet least rewarding aspects” of IT. The cloud allows businesses to share overheads, including power, cooling, and staffing with other "tenants" of the cloud provider.

“The primary drivers for cloud computing are derived from multi-tenancy - sharing capital and operational expenses between multiple users, benefiting from economies of scale,” he says.

However, the challenges associated with any significant IT transition remain. A recent survey, by Vanson Bourne for SunGard Availability Services, revealed the vast majority of chief information officers feel that, in terms of implementation concerns, little has changed.

The idea that cloud computing projects need a separate and distinct approach is "overhyped". Instead, the main issues companies and their IT departments face are those of cost and, more importantly, security.

“There are some genuine new risks associated with certain cloud services, but these need to be reviewed objectively on a case by case basis [compared] with the risks of in-house delivery," cautions Bob Tarzey, analyst and director at Quocirca. “The greatest risk is missed opportunity."

But even vendors deeply involved in cloud computing caution that there are risks. Businesses are rightly worried about security, warns Colin I’Anson, technical director for cloud infrastructure at Hewlett Packard.

“One security slip, if you put your content, or your business data into the cloud and it all goes wrong, it could really damage your business," he says.

“It’s very important to get it right,” he continues. “Ultimately, it’s not easy to get it right first time but you can design a system, carefully and precisely, that can make sure you minimise and control that risk to get it down to the lowest possible level."

Safety first

Good housekeeping, though, can help businesses prepare for a move to the cloud.

“Preventative steps like carrying out security vulnerability assessments, and regularly running tests in which independent experts try to breach your defences , so-called ‘penetration tests’, are becoming recognised best practice," says Tracey Stretton, a legal consultant for Kroll Ontrack UK.

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