Mike Lynch: Firms happy with 95% IT functionality should move to cloud

Former CEO and founder of Autonomy, Mike Lynch, believes cloud is right for a number of applications, but says ERP will always stay in house

As more traditional business functions become cloud offerings, there are certain questions organisations need to ask before moving to the cloud.

This was the message of Mike Lynch, the former CEO of HP-owned Autonomy, who left the company earlier this year.

Speaking at this week’s IP Expo, Mike Lynch celebrated the benefits of cloud computing – such as cost savings and efficiency – but warned there were some applications that would not move if they functioned well already.

“We are facing a series of technological changes,” Lynch said. “With cloud, there is vast amounts of venture capitalist money and a whole host of new names. But a lot of the money has gone into companies who are taking some function traditionally done within the enterprise and deciding to do it in the cloud.”

“There are only certain types of things that will move to the cloud quickly though, as some we already have working internally.”

Lynch pointed to enterprise resource planning (ERP) as an example of one he considered likely to be kept in-house, rather than moved out into a cloud model.

“ERP is so entwined into an organisation that moving it out into the cloud is just not worth the risk,” he said. “The things that are going to pop up into the cloud the fastest are things that are new.”

The decision would be made, Lynch claimed, by companies using a "rule of 95%" to establish what functions would work in the cloud.

“The model before was big integrators would come into the company, sit down and ask what you needed and what your long term requirements were,” he said. “You would then end up with a big, complex system which could take a time scale of three years to be ready, with a system integrator coming in and selling what you are missing.”

“That will change with cloud offerings. You will have to accept they are not customised to that level, but the question to be asked will be, can you live with it 95% of the time? If the answer is most of the time you can handle 95% of the functionality, you should move to a cloud system.”

Cloud computing security issues

Lynch also said cloud computing security issues were becoming less relevant. He said that, although breaches were sure to occur in the future, it would most likely be down to human error.

“We will have scandals where something is leaked from a cloud company,” Lynch said, “but this won’t be down to the length of encryption keys, it will be because of people.”

“The security industry is obsessed with hackers breaking in. But data loss is the bigger problem and it will be someone with valid credentials who will cause that.”

Lynch concluded by admitting traditional IT was often sidelined when other C-level executives want to bring in a new technology. He advised departments and CIOs to always warn of the risks.

“If you show the risk was there and something goes wrong, you cannot be held to account,” said Lynch.

Read more on Cloud security