News analysis

Cloud applications gain ground in corporate IT

Brian McKenna

Cloud applications are starting to gain critical mass in enterprise IT, according to cloud application providers.

While this can be dismissed as the special pleading of the self-serving, senior executives at Informatica and Birst couch their arguments with caution in a brace of recent Computer Weekly interviews. And, on the user side of the house, the Corporate IT Forum is registering a shift in focus from “should IT move to the cloud?” to “how?” and “in what areas?” 

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Head of research at the blue chip user organisation, Ollie Ross says: “The Corporate IT Forum's 2013 Cloud Computing Reality Checker has clearly shown that, for large enterprises, the challenge is now how to use cloud, not if they should use it.”

Juan Carlos Soto, senior vice-president and general manager of cloud integration at data integration supplier Informatica, says “hybrid IT” is the critical concept in assessing how, and to what extent, corporate IT is moving to the cloud. 

“Companies starting from scratch will be cloud-based from the first. Some companies will never move to the cloud. And the rest will be a blend of cloud and on-premise,” said Soto.

He said the early attitude of corporate IT was often of ambivalence or neglect. It was more lines of business who were early adopters. But now, at least in the US and western Europe, “IT has gone from a purchase approver to driving the transition. ‘Cloud first’ is a key policy for new projects in 2013 and 2014. The exception is not to include cloud,” said Soto.

He cites the US government’s cloud first policy, announced in late 2011. Soto himself was selected for the TechAmerica Foundation’s "Commission on the Leadership Opportunity in the US" US Deployment of the Cloud (CLOUD²), which produced the Cloud First, Cloud Fast: Recommendations for Innovation, Leadership and Job Creation report, submitted to the Obama administration in July 2011.

From that experience he learned, he said: “How far reaching the transformation from cloud can be, in terms of making the US more competitive globally. 

"And while security has to be paramount, we need to make sure we are not limiting innovation artificially by not leveraging cloud. It was eye-opening beyond the technology issues.”

Tail breeze getting stronger

Brad Peters, CEO of cloud-born business intelligence supplier Birst, said of cloud analytics adoption, “there is no huge headwind, but the tailwind is getting stronger”.

Peters ran the analytics division at Siebel before Oracle acquired the company in 2006. His view is that the legacy, client-server, on-premise model makes business applications expensive and hard to consume. And so, in relation to operational enterprise applications such as ERP, CRM and HCM, the general market shift has been to cloud deployment, “because these applications are engineered for delivery”.

His company’s approach has been to offer an entire business intelligence infrastructure, including back-end integration, as opposed to a data-discovery software suite, in the cloud. 

However, he said: “We are about automating the process of business intelligence, therefore it does not matter where we host it, so it can be on premise, as an appliance, too.

“Although operational applications are going to the cloud, 98% of all enterprise data is still on-premise. So we will be in a hybrid world for a long time”.

But he does see a tipping point hoving into view.

“A year ago, we were having to make the case for cloud. Loss of control was outweighing factors like scalable infrastructure, reliability, disaster recovery. We never saw anyone asking for cloud only," said Peters. 

"But now the tail breeze is getting stronger. If you look at the top end of customers for Salesforce, Netsuite, Marketo, and so on, they are really big companies. When you went to Dreamforce two years ago, you would be hard pressed to find a big company. Now they are there.”

Keeping control

Peters also maintained that data security in the cloud is a red herring. “The cloud is like a bank. Do you put your money under your pillow or in a bank?” Most data breaches are internal, he pointed out.

The issue is more about loss of control for IT. “That is real and valid. So, we add APIs and layers to give similar levels of control to IT, even when we host their data.

“The argument we make to IT is ‘don’t spend your time on the infrastructure, the plumbing. Spend more time on the modelling and manipulation of data’," said Peters.

"That is where IT is strategic. That is the sexy stuff – the analyst role, where you are interfacing with the business. And the business doesn’t have people who can understand data the way IT does.

“You don’t have to be a data scientist, doing predictive modelling. But data modelling in general, translating what the business wants into models – IT professionals get that.”


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