News Analysis

Cloud services still need a poster boy

Karl Flinders

Wipro Technologies' announcement of a platform designed to offer software as a service adds more momentum to a cloud computing movement that still lacks a flagship deal.

Most major IT service providers are developing cloud computing platforms to enable them to deliver services through the internet.

These platforms are a necessity for any supplier because cloud computing is increasingly in demand for delivering IT services. It takes away the large upfront cost of buying software and the high cost of maintenance.

Analyst firm Gartner predicts that the worldwide market for SaaS will be worth $8bn in 2009, a 21.9% increase on 2008.

But the hype needs a benchmark to become a reality.

Big deal

This means one of the big suppliers has to sign a major deal with a large customer, says consultant Andy Gallagher of Compass Management Consulting. "People are talking about rolling out the next generation of software in the cloud, but we have not seen a large-scale implementation of cloud computing at a customer level."

He says the ultimate deal that will kick-start the adoption of cloud services within large companies will need three characteristics. It will need to be a multi-million pound deal signed by a FTSE 100 company that provides business-critical applications in the cloud.

Duncan Aitchinson, head of Europe at sourcing consultancy TPI, says there are big deals in the pipeline. "There will be some big deals in the next 12 months that carry the cloud computing label."

Critical concerns

Peter Brudenall, lawyer at Hunton & Williams, says customers are asking for advice about potential data protection risks associated with receiving business-critical applications through the cloud.

"Businesses will probably start piloting some services, but probably not business-critical applications."

Robert Morgan, director at Hamilton Bailey, says the middle of next year is likely to see a number of cloud services projects, but a large-scale deal is some way off.

A major cloud services deal is likely to be made soon, and once it does widespread business acceptance will quickly follow. But suppliers still have work to do in convincing customers that their data is secure in the cloud.


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