System integrator and outsourcing supplier, Capgemini, will be providing a cloud computing service using Elastic Cloud Computing (EC2) from Amazon, a strategy which could help businesses kick-start new IT projects for a small initial outlay. Other providers of outsourcing and systems integration services are likely to follow Capgemini's lead with cloud computing as part of their services.
The service, which is being provided by Capgemini's Cloud Computing Center of Excellence, will offer business users Microsoft Sharepoint, Oracle ERP and application development and testing in the cloud.
Capgemini plans to use the Amazon service to offer its outsourcing clients a lower cost approach to pilot projects and IT projects, according to Andrew Gough, SaaS business development manager at Capgemini. "Every business has a project that never surfaces because 80% of an IT budget goes on maintenance.
"For a minimal investment [using cloud computing] it is possible to prove the business case for an IT project, without the need to buy expensive hardware and software licences."
Neil Macehiter, research director at analyst MWD Advisors, says, "Capgemini is taking the role of a traditional systems integrator, providing a link between the business customer and Amazon. Cloud computing has a steep learning curve. Businesses need to understand how software lifecycle management works in the cloud." This is where Capgemini, as a system integrator, can help, according to Macehiter, due to its centre of excellence which provides cloud computing expertise.
"We want to allow our clients to invest in new areas of technology at lower cost. At the moment we are looking at what is possible. We know we can offer Microsoft Sharepoint, Oracle and application development in the [Amazon] cloud," says Capgemini vice-president Richard Payling.
Other traditional outsourcing suppliers are likely to offer similar cloud services. Richard Hannah, managing director of EquaTerra IT practice for Europe and Asia Pacific, says, "I expect Hewlett-Packard/EDS, IBM, Microsoft and even ERP Software suppliers such as SAP to be active in [the cloud]."
For business users, Hannah says the upside of outsourcing suppliers selling cloud-based services is much lower costs and a straightforward operating model. "The downside may be a loss of control over your IT services and a perception of potential security issues," he warns
Businesses will be reluctant to store private data in clouds operated in US datacentres, as they risk falling foul of data protection regulations. Chris Coulter, a partner at law firm Morrison & Foerster, says an agreement for data protection called Safe Harbour does exist between the EU and the US, but some businesses may regard US data protection laws as insufficient to meet the security principles of the UK Data Protection Act.
So initially, the service will be available only in the US, but Amazon is expected to complete its European datacentres in 2009, which should satisfy users who are concerned with storing personal data in US-based datacentres.