CIOs still wary of public cloud adoption

by Sohini Bagchi    Feb 11, 2013

cloud computing

There has been a lot of buzz on cloud computing as an increasing number of enterprises are leveraging the technology for greater efficiency and ROI. However, most of the adoption we got to see in 2012 was in the private cloud space. Researchers believe that although cloud adoption will continue to grow globally in 2013, it will still revolve around private cloud projects and it will take a while for public cloud to witness large scale adoption.

A new research by analyst firm TheInfoPro indicates that nearly 50 percent of respondents have planned some internal cloud projects in the next one year. “The cloud has really become synonymous to internal transformation, as adoption of technologies like virtualization and efforts to radically standardize and consolidate have all been classified as ‘cloud’ initiatives,” said Peter Foulkes, TheInfoPro’s Research Director for Cloud Computing in a statement.

The research titled Cloud Computing Study 2013 adds that enterprises will remain focused on building internal environments and that private cloud will be amongst the top-two cloud related projects for over 47 percent CIOs this year.

Gains in private cloud

“The key reasons for massive private cloud adoption include increased flexibility and scalability of IT resources, while at the same time reducing IT costs and capital expenditure. However, many enterprises are still skeptical about whether they can actually save money by leveraging public cloud,” says Ajay Sawant, MD, AllTimeIT Solutions. He points out that lack of standardization and security issues are the key barriers to public cloud adoption in the present scenario which will change with time and greater awareness.

“In contrast, enterprises already have greater clarity about the potential cost savings of their private cloud initiatives, making it the preferred choice for businesses expanding their technological base in favor of virtualization,” notes Manish Agarwal, Asst. GM-IT, United bank of India.

Likewise, the study noted that 36 percent respondents expect greater savings from their internal cloud efforts that is anywhere between 1 and 10 percent and a chunk of this will come from increased automation. A recent Gartner survey also revealed that in 2012 almost 75 percent of companies were in favor of setting up on-premise cloud environment and the trend will continue.

However, even in the private cloud space, CIOs face challenges to shift beyond virtualization toward automation, besides, facing non technical issues such as budgetary constraints and resistance to change that act as a dampener in their cloud implementation efforts.

Strong cloud strategy

Experts believe that the need of the hour is to have a strong cloud strategy in place so as to ensure greater efficiency. According to Sawant, several enterprises are working closely with the cloud partners to build a strong business case and strategy for the cloud— whether it is about private, hybrid or public cloud computing.

“It is important to analyze whether the business is cloud ready before virtualizing its operation. Private cloud should be treated as a business strategy and needs to be incorporated within the operation system,” agrees Agarwal.

Lack of standardization is certainly a concern in the industry. However, the Payment Card Industry Security Standards Council (PCI SSC) recently published a new supplement to help businesses select cloud service providers (CSPs), as well as implement best practices within their own business to safeguard data going to the cloud.

Once such standards are defined, CIOs and cloud providers will have a common understanding about these standards and would use common terminologies to define their services. Sawant believes it will not only help service providers to offer their solution with less difficulty and allow CIOs to understand which cloud service providers as well as which solutions are suited to their business needs.