Cloud security, licensing, and rising costs hinder public cloud adoption

Cloud security, licensing difficulty, and rising costs are the biggest hurdles for IT adoption of cloud computing.

LONDON --Though vendors would have you believe that cloud computing is now a mainstream technology, enterprise IT shops resist the public cloud due to cloud security concerns, licensing issues, and rising costs.

Customers and analysts shared their concerns and the barriers of cloud adoption during the Cloud Computing World Forum held here this week.

Security, in particular, remains one of the biggest reasons that IT pros have delayed a move to the cloud.

“There have been so many scare stories of information loss on the cloud that users are asking themselves – ‘how do I know I can trust the provider?’” said Bob Plumridge, CTO of Hitachi Data Systems Corp., based in Santa Clara, Calif. With looming concerns, IT support for cloud has been lukewarm at best. In fact, many of those who do use cloud services rely on it sparingly.

Elsevier B V, an academic publisher based in Amsterdam, has benefited from Platform as a Service offerings for selective data, said Jora Gill, IT head at Elsevier.

“We hold a lot of data such as authors’ and writers’ information and we will never put such private information on the cloud yet,” Gill said.

Cloud computing costs on the rise

Cloud offers companies a way to scale up or down quickly, but that convenience comes at a cost.

“If yours is a flat organisation with very limited seasonal peaks, then buying higher capacity can make cloud expensive for you,” said Adam Gerrard, head of IT for, a hotel reservation website based in Manchester, UK.

If IT pros want to be cost-effective, they must negotiate with the vendors to pay extra for additional needs than to agree on a higher base rate, he said.

“Yes, there are certain use cases where cloud doesn’t make monetary sense,” said Graham Hobson, CTO of Photobox, a digital photo printing company based in London.

 For instance, Photobox’s cloud vendor has pressured it to use its cloud storage services.

 “A lot of our turnover comes in the month of December, so we don’t need that much of cloud storage throughout the year,” he said.

“Buying that would be like renting a car every day,” he added.

Cloud licensing, standards add complexity

Another barrier is the lack of IT pros with cloud skills; cloud computing hasn’t reached a point where it can be easily managed by non-technical people.

“Cloud is like a bucket with 1,000 tiny holes in it…” said Hobson, explaining that a standardised cloud package from a vendor will help IT meet only the basic objectives and for any additional requirement, IT will have to spend time customising the service.

“…Plugging these holes can be both difficult and expensive.”

Cloud licensing can also be complicated.

“Be it Oracle or Microsoft, make sure you read the licensing agreement very, very carefully to avoid hassles,” warned Elsevier’s Gill.

In addition, there aren’t industry-wide standards to put customers at ease.

 “Vendors are moving faster than the standards bodies,” said Paul Boyns, head of IT strategy at the BBC. This means that vendors are putting their own standards out there to get certification, he explained.

IT must also think about whether what they are buying can be moved or changed later, Boyns advised. Cloud services could also be isolated, and IT pros may find it difficult to integrate different services together, he said.

Stricter compliance and data regulations in the EU don’t help either.

“The HR team of a company in Paris will be advised to store all the employees’ data within French boundaries,” said Plumridge. “But when it enters into a contract with a cloud provider, it has no idea where its data is and it’s a hassle.”

Other IT pros resist the cloud simply because it is an immature market.  

“Cloud vendors themselves are still evolving and unless users clearly know which direction a vendor is headed, they won’t be confident of doing business with that cloud provider,” said Phillip Carnelley, research director of PAC UK.

By the end of this decade, only 30% of world’s IT will be on the cloud, he said.

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