The debate over the risks and benefits of cloud computing has never been as writ large as it was in 2013. On one hand, this summer’s NSA Prism scandal brought home to organisations the danger of using US-based cloud services - namely, that any unencrypted data could be trawled at will without their knowledge by security agencies. On the other, the year was a tipping point for the use of the cloud, with an increasing body of research showing that even large organisations are now firmly embracing cloud-based services as an essential part of their IT infrastructure.
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Despite concerns over Prism, including a broadside from European Commision (EC) vice-president Neelie Kroes, few organisations were deterred from their cloud ambitions. However, businesses increasingly recognised they would need to take additional precautions to protect any sensitive customer or commercial data, with some reportedly looking towards cloud providers in Switzerland, where privacy is enshrined in law.
Hybrid cloud - where firms use a mixture of public and private cloud services (usually alongside traditional in-house systems) - emerged as “the new norm” for most UK businesses, with a survey from the Cloud Industry Forum (CIF) noting that 69% of organisations in the UK are already using at least one cloud service. Meanwhile, leading industry analyst Gartner predicted that by 2017 half of all large organisations globally will have deployed a hybrid cloud model.
The changing attitude of corporate UK to the cloud was brought home by the growing number of household names championing the cause. Not least among these was energy giant BP, whose CIO spoke candidly at June’s Cloud World Forum in London about how the company had achieved increased agility and scalability by embracing a hybrid cloud model that focused on finding the best solutions for the jobs at hand, regardless of how they were delivered.
The government’s G-Cloud initiative also continued to evolve. The fourth version of the portal (G4) went live in October, taking the total number of cloud suppliers on the system to almost 1,200.
There was also a fair amount of action among public cloud providers, especially in the growing infrastructure and platform as a service (IaaS and PaaS) markets. IBM acquired SoftLayer to boost its offering, while other big players such as Google and Microsoft also jostled for position. But everyone was still struggling to challenge the dominance of Amazon Web Services (AWS), which kept hold of more market share than all its main rivals combined and cocked a snook at critics when its services were declared robust and secure for use by financial services firms by the Netherlands’ banking regulator.
Here are Computer Weekly's top 10 stories that shaped the state of the cloud in 2013:
After the US National Security Agency (NSA)’s Prism surveillance system hit the headlines in June, EC vice-president Neelie Kroes waded into the affair by highlighting the likely negative repercussions for US cloud providers. "Why would you pay someone else to hold your commercial or other secrets if you suspect or know they are being shared against your wishes?" said the chief architect of the EC’s Digital Agenda for Europe.
IBM acquired prominent cloud infrastructure provider SoftLayer for a rumoured £2bn to form its own cloud services division. The company reportedly wanted to boost its cloud offering to compete with market leader Rackspace and help speed business adoption of public and private cloud solutions.
The government launched version four of its cloud services portal G-Cloud – giving Whitehall buyers a selection of over 13,000 services from almost 1,200 cloud suppliers, most of them small to medium-sized enterprises (SMEs). The Cabinet Office said cumulative CloudStore sales had already topped £50 million, with half the total spend going to SMEs.
The Netherlands’ banking regulator gave public cloud giant AWS a valuable stamp of approval in July when it sanctionedthe use of the provider for “all facets of Dutch financial operations”. Beyond giving AWS access to the Dutch banking market, the move also helped to neutralise longstanding uncertainty over the robustness and security of its platform.
Leading analyst Gartner predicted hybrid cloud would folllow the same pattern over the next three years as private cloud has over the past three years – penetrating 50% of large enterprises by 2017. Gartner noted the hybrid approach was likely to gain in popularity since it allowed organisations to take advantage of the scalability and cost-effectiveness of the public cloud without risking sensitive data or mission-critical applications to third parties.
Cloud-hosting businesses in Switzerland, where privacy is enshrined in law, found themselves immediate beneficiaries of the Prism revelations. One Zurich-based datacentre operator said it had witnessed a 45% growth in revenue as businesses increasingly sought guarantees that their sensitive data would be free from prying eyes.
AWS cemented its runaway lead in the public cloud market by increasing its market share in the rapidly growing IaaS/PaaS market to almost 30%. The next biggest player was Salesforce, with a 7% share. And despite some jostling for position among evenly matched Microsoft, IBM and Google, there were no signs of them starting to close the gap on AWS.
BP CIO Dana Deasy opened up about how the world’s fifth largest company had been following its ambitions to embrace the cloud. Speaking at June’s Cloud World Forum in London, Deasy detailed how the oil giant had boosted agility and scalability by using a mixture of public and private cloud services, along with traditional systems, while also developing an ever more nuanced understanding of the cloud market.
In October, research found that most UK businesses now use a mix of in-house and cloud-based IT, with cloud adoption growing at a rate of 15% a year. A survey of 250 senior business and IT decision-makers conducted on behalf of CIF revealed that 69% of organisations in the UK have adopted at least one cloud-based service, while only 4% said they had no intention of doing so.
A global survey of CIOs commissioned by IT service provider Compuware revealed that almost 80% of CIOs are concerned about the hidden costs of cloud. Despite also having worries about availability and performance, and their effect on customer loyalty, CIOs nonetheless rated cloud computing as their top investment priority.