UK firms tap into cloud computing savings

Insurance firm Kennedys and Rowanmoor Pensions are using

Insurance firm Kennedys and Rowanmoor Pensions are usingcloud computing services to beat the credit crunch.

Kennedys is using the cloud computing model of online services to virtualise its IT operations. Itclaims to be saving more than £350,000 a year.

According to Rowanmoor Pensions, a similar cloud computing model is saving the organisation about £200,000 a year.

By providing applications, storage and computing power online, cloud computing enables firms to buy IT services as and when required without incurring long-term hardware and software maintenance costs.

Other cost savings come from reduced hardware requirements, no capital expenditure on software, and lower power consumption.

Ian Readman, chief executive of IT services firm Intercept IT, said cloud computing should be considered as a way of driving down IT costs while improving reliability and user experience.

"For larger firms this approach can be used to centralise, virtualise and optimise their own corporate datacentres, or SMEs may look to outsource their complete IT to a specialist virtual IT provider," he said.

According to Readman, cloud computing is particularly well suited to companies with sales teams working remotely and needing to access company information online.

"This has huge potential to offer savings at a time when tight budgets are absolutely paramount," he said.

Despite the cost savings and increased flexibility of IT infrastructure offered by cloud computing, industry experts have warned that the model is relatively immature and does not work in every context.

Regulatory or legal requirements are often forgotten, and this can expose businesses using cloud computing to unnecessary risk.

The Data Protection Act, for example, requires businesses to control the way personal data is processed and stored, but this is extremely difficult with cloud computing, said Andrew Scott, partner at law firm Dickinson Dees.

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