Cloud computing has divided CIOs into two camps: early adopters who are eager to take advantage of emerging technologies, and skeptics who feel cloud adoption is an unnecessary risk. While cloud computing is today mainstream, accessible, and affordable to consumers and businesses, it still faces a barrage of scrutiny from industry and government leaders.
So, where does the truth lie? To answer that question, we must first look at the existing cloud computing landscape in Canada. ICTC’s latest cloud study does just that.
Canada’s cloud economy currently employs more than 38,000 workers, and contributes $4.6 billion annually to national GDP. Direct employment in the cloud economy is expected to reach 57,000 by 2018. The cloud economy’s GDP contribution is forecast to reach $8.2 billion in the same year. Information and communications technology (ICT) jobs in cloud computing will grow by nearly 50 percent over this period.
The cloud economy’s multiplier effect is expected to impact employment in the rest of the Canadian economy. For every four jobs created by cloud, one additional job will be created elsewhere in the economy.
Half of all Canadian businesses have already adopted identifiable cloud services. When we factor in the “hidden cloud”—programs and services we use every day that are hosted over cloud-based applications—the adoption rate is likely much higher. Nearly two-thirds of businesses that have adopted identifiable cloud services, such as storage systems and applications, have reduced their IT costs.
So, what does all this mean for CIOs considering cloud computing?
Canada is one of the fastest growing markets for this emerging technology. Organizations in both ICT and non-ICT domains have already transitioned to the cloud. Start-ups and small businesses have used cloud computing to build in-house capacity without having to spend large sums of money on software, hardware, and maintenance.
Easily quantified benefits such as reduced operating expenditures are one of the most obvious adoption drivers for cloud. Observers of the cloud phenomenon, however, note these are secondary to more important benefits such as scalability, reduced time-to-market for innovative new services, and the ability to harness and make use of big data analytics.
What about the drawbacks?
As we mentioned at the outset, skeptics tend to view cloud as an unnecessary risk. CIOs who have relied on traditional data servers might feel they have nothing to gain by adopting cloud computing. After all, cloud evokes imagery of a floating, separate entity outside your control. And that imagery doesn’t exactly elicit feelings of security.
Truth be told, most concerns about cloud computing are groundless. In reality, cloud’s security protocol isn’t much different than traditional data centres. That isn’t to say business leaders shouldn’t consider the cons as well as the pros of adopting cloud. They most definitely should. But in order to properly weigh the pros and cons, business leaders mustn’t let misconceptions steer them away from a potentially rewarding decision.
Tech gurus have argued cloud computing gives you more security than traditional IT systems, not less. Here’s why. Variations in threat activity are not as important as where the infrastructure is located. Because cyber attacks are opportunistic in nature, anything that can be potentially accessed from the outside (be it cloud or traditional servers) can fall prey to an attack. Studies have found web application-based cyber attacks hit both cloud and on-premise infrastructure. However, on-premise infrastructure usually suffers more incidents than third-party cloud services.
Business leaders must also be aware the technology itself can be easily made compliant with existing Canadian privacy legislation such as the Personal Information and Electronic Documents Act (PIPEDA). According to the Privacy Commissioner of Canada, cloud storage is a “transfer for processing,” which means your company is ultimately responsible for the data even if you use a third-party service provider.
Now that you’re thinking, cloud might not be so bad after all, it’s time to address another concern, namely, the human resource implications of adopting cloud.
Some observers may be tempted to argue shifting over to the cloud will result in job loss, since cloud computing automates tasks that have been performed traditionally be employees. While cloud computing certainly does entail a cost-cutting aspect, and this may indeed extend to payroll if companies feel they need fewer data centres, this is an overly simplistic account of what actually occurs when emerging technologies are factored into the equation.
Emerging technologies are rarely applied to a static environment. This is especially true for cloud, which in a few short years has transformed the ICT landscape. Today, cloud computing is a key enabler of mobile technology, business intelligence, and high performance computing. Cloud is at the fore of today’s fast-changing business environment, which requires an adaptable and responsive workforce.
Cloud computing may result in job loss in certain fields, but it will create far more opportunities than it can potentially destroy. As we mentioned earlier, more than 38,000 people are directly employed in Canada’s cloud economy today. Of those, there are more than 21,000 ICT professionals. The biggest challenge the cloud industry faces isn’t devastating job loss, but rather finding the right blend of skills to meet high demand roles. As a CIO, this challenge could determine the extent of your success as a cloud-enabled firm.
On the ICT side, the arrival of cloud computing is demanding a blend of skills that intersect data collection, analysis, and programming. ICT workers currently hands on to the administration and configuration will be required to add new skills to their wresumes such as managing vendor relationships. On the non-ICT side, business leaders in all sectors of the economy will require a basic understanding of cloud computing and how it impacts their industry.
Another challenge of leveraging cloud computing to corporate benefit is managing vendor relationships. Security risks aside, it’s not easy handing over your data to a third-party. That’s why a Service Level Agreement (SLA) that protects your data while it resides in the cloud is necessary. SLAs provide security and compliance standards and delineate responsibility on such matters between your team and the vendor’s.
A CIO may also want to consider inserting an audit clause in their SLA. Such a clause would give your organization the power to have an external auditor confirm your vendor is in compliance with the articles set forth in the SLA. And while we’ve already shown cloud computing poses no more risk than traditional data centres, CIOs should update their risk management process to account for the fact their infrastructure and data are moving outside their organization.
Deciding on whether cloud’s cost-savings potential and enhanced efficiency outweigh the loss of physical control of data is a major responsibility. In order to reach a decision that is right for your company, you must judiciously weigh the pros and cons of each. Based on what we know about cloud, the potential benefits outweigh the drawbacks, as the drawbacks themselves are often overstated and misleading. If you’re reading this, you’ve probably spent some time reading about cloud computing. Chances are your competitors have already gone there, and for good reason.