Canadian firms lead in adopting cloud computing

Canadian IT decision makers are more informed about cloud computing than their global counterparts and local organizations lead the world in adopting the technology, according to a recent survey of large enterprise firms.

While a majority of the respondents believed that cloud computing holds the potential to improve productivity and profits during the economic recession, security issues remain a major hurdle to adoption, and almost 84 per cent of those polled indicated they had no plans of switching from their current internal IT systems.

The survey, conducted by Kelton Research for Avanade, a Seattle-based IT consultancy company specializing in Microsoft enterprise platforms, queried 502 C-level executives and IT and business decision-makers from mostly large enterprise organizations in 17 countries including the U.S., Canada, the United Kingdom, Germany and Singapore. The study covered a wide variety of industries such as government, aerospace, defense, telecommunications, energy, healthcare, finance, media, manufacturing and non-profit organizations.

More than 67 per cent of Canadian organizations reported they are currently using a combination of cloud computing and internally owned IT systems, compared to only one-third of companies worldwide, the survey found.

"Canada appears lead cloud computing adoption mainly because local IT leadership is more proactive in exploring the technology," notes Kaytek Przybylski, capability director for Avanade Canada.

He said the survey indicates that 71 per cent of respondents in Canada were familiar with cloud computing compared to only 61 per cent of their global counterparts.

Cloud computing refers to the use of Internet-based computer technology to access and deliver a variety of services to users. Cloud computing uses data centres and servers built on virtualization technologies to deliver applications and resources to users, typically under what is called a software-as-a-service (SaaS) model. Under this model, customers generally do not own the infrastructure; they merely access or pay rent for its use and thereby avoid capital expenditure.

Nearly two in three IT executives worldwide (65 per cent) and four of five in Canada (80 per cent) believe cloud computing reduces upfront costs.

Cloud computing adoption in Canada, however is still at its early stages, according to the Avanade executive. "The technology is considered to be relatively new and even here many companies are still considering cloud computing."

Other key findings of the survey were:

• Executives, by a five-to-one ratio, report they trust existing internal systems over cloud-based systems due to fear of security threats and loss of control over data and systems.

• More than 50 per cent of respondents use technologies to cut costs.

• Four out of five respondents admit their existing internal systems are too expensive.

• 71 per cent of C-level executives and IT decision-makers agree that cloud computing is a "real" technology option.

• While nearly half of the respondents consider themselves to be early adopters of technology, 61 per cent worldwide are not using cloud computing.

• More than 80 per cent of those using internally owned IT systems do not plant on integrating any form of cloud computing in the next 12 months.

• Respondents recognizes that cloud computing allows companies to focus on core business (65 per cent), react more quickly to market conditions (62 per cent), gain access to the latest technology (51 per cent) and improve flexibility (70 per cent).

Security issues are typical concerns when it comes to adopting new technology, according to Craig Balding, a security practitioner with a Fortune 500 company, blogger and co-author of Maximum Security: A Hacker's Guide to Protecting Your Internet Site and Network.

But Balding said by combining cloud computing with thin clients that hold only small amounts of data in cache there is actually less physical exposure to data leakage.

The survey findings bolster earlier views aired by technology industry experts during ITWorld Canada's recently concluded Cloud Computing Conference.

Lack of clarity about the technology among technology professionals is one of the key obstacles to adoption of cloud computing in the enterprise, according Reuven Cohen, founder of Enomoly, an IT consulting firm based in Toronto.

He said many organizations are torn between IT departments who want to maintain control of IT resources and business units who prefer more flexibility to rapidly deploy applications.

The technology sector has been heading toward cloud-based computing for a long time, but companies also must be cautious when buying into a trend, according to Jackie Fen, vice-president for research firm Garnet Inc.

"You really need to know why you're adopting these technologies. You just can't leap in every time a new thing gets hyped, " she said.

Przybylski said the survey indicates that cloud computing technology vendors must tackle the international concerns about security and control of data in order to boost adoption of the technology.

He noted that nearly one-third of the companies using cloud-based systems have increased their use of cloud computing, even during the economic downturn, after seeing its benefits.