CIOs and the cloud: The future of European enterprise software

European organisations are moving to the cloud rapidly, but trepidation remains in concerning certain aspects, such as security

The future of European enterprise software is the cloud, and spending on on-demand IT provision continues to rise as CIOs seek a flexible platform for digital transformation.

Researcher IDC says global spending on public cloud services and infrastructure is set to reach $160 billion in 2018, an increase of just over 23% compared to over 2017. Total spending will continue to grow in coming years, hitting $277bn in 2021.

In Europe, the UK and Germany will lead public cloud investment, with spending reaching $7.9bn and $7.4bn respectively this year. But while most CIOs and non-IT business leaders recognise the power of the cloud, some doubters remain.

Our conversations with IT leaders suggest a range of factors – such as compliance, security and connectivity – must be considered as European CIOs help shape the future of the cloud.

Take Brad Dowden, CIO at recruitment specialist Airswift, who – despite being a big believer in the benefits of on-demand IT – says movement towards the cloud is not a given. Too many businesses still struggle to make the most of an online mode of working.

“Cloud might not be a new concept anymore but a lot of businesses are still working towards making the most of on-demand IT,” he said.

However, Dowden’s own business has been able to make progress at a faster rate: “We’ve been very agile and made some early calls that are helping us to change very rapidly.”

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Dowden runs 95% of his firm’s applications on the cloud. Airswift uses Microsoft Dynamics 365 as its ERP platform and Office 365 for productivity. He’s migrated all data to OneDrive and SharePoint, suggesting CIOs who are wary of the cloud – particularly in terms of information security – should be less hesitant.

“The cloud helps when providing compliance in terms of GDPR and governance,” he said. “If we didn’t use the cloud, I’m not even sure how we’d tackle those requirements. Because we use the cloud, we’ve had to work out where all our data resides and that means we’re in a great place in terms of security and legislation.”

“We know where our information sits and we can then just apply policies as we need to. Speaking to other CIOs, I don’t think other businesses in other sectors are always in that position. That’s a living nightmare.”

That view resonates with Martyn Wallace, chief digital officer for the Scottish Local Government Digital Office. Like Dowden, Wallace believes too many executives fear going all-in with the cloud and believe information is only safe in an internal data centre. Naysayers should recognise the power of working with a technology specialist like Amazon, Google or Microsoft, who have the weight to ensure data stays safe and secure.

“There’s fear of moving across and transferring infrastructure to somebody else,” said Wallace. “We want to bust some of the myths surrounding security and the cloud. There will be key issues, like ISO and PSN compliance, but providers also have multiple security elements.”

“These specialists run a 24/7 network operating centre that the councils can’t afford. Rather than worrying about passing control, we need to get public sector staff to concentrate on using the cloud as a platform to deliver great services to citizens.”

Embracing the cloud

Security isn’t the only factor that dissuades some European IT decision makers from moving on demand. Aaron Powell, chief digital officer at NHS Blood and Transplant (NHSBT), has helped his organisation embrace the cloud. He has spent the past two years pushing a digital transformation agenda – and cloud forms a key component of that change programme.  

NHSBT uses Azure for some services, such as a portal for blood donors, and Microsoft applications run natively on the provider’s cloud platform. NHSBT also uses the IBM cloud to take advantage of analytical technologies. While Powell is an advocate for the cloud, he recognises challenges remain, particularly around data access over the network.

“We must make decisions about what that choice means in terms of day-to-day connectivity,” he said. “The real challenge around cloud is going to be around how much the internet can cope when it comes to connecting to different services. To date, we’ve relied on the internet – whether we’ll be able to do that in the long-term, due to fast-changing latency requirements, is up for debate.”

Anil Cheriyan, chairman of non-profit organisation the Technology Business Management Council, and ex-CIO at finance firm SunTrust, also recognises connectivity is a concern for some IT leaders. He said executives must think carefully about which services they’ll move to the cloud and how they’ll use external partners to access disparate resources online.

“There’s a lot of new entrants that are platform organisations and providing connectivity between businesses and their IT suppliers,” said Cheriyan. “The cloud ecosystem of the future is forming fast. One of the questions CIOs always ask is, ‘how quickly do we need to get rid of the physical infrastructure, as everyone is moving to digital?’ It’s complex, because you’ll have a mix of digital, self-service technologies and core, legacy systems.”

What is clear is that pioneering CIOs are using the cloud as a basis for business change. These programmes are likely to include a range of providers as IT leaders hone their organisation’s on-demand strategies. While big-name players, like Microsoft, Google and Amazon, are likely to be key, CIOs should note that the future of cloud provision is still – in many ways – up in the air.

Core providers continue to dominate

Andrew Marks, a digital transformation expert and former CIO of Tullow Oil, said it is probably still the case that core providers, such as Oracle and SAP, will continue to dominate the enterprise IT environment.

However, he added the cloud creates a platform from which European CIOs can access a whole new range of microservices, many of which would previously have been unavailable. IT leaders must ensure that they remain flexible and open to the benefits of these nimble operators, both now and in the long term.

“You don’t want a fixed ecosystem of, for example, Oracle or SAP in the middle and then five providers around the edge,” he said. “You almost want to be able to take advantage of the opportunity to churn and to pick the best provider at the time. Don’t lock yourselves in and wait for the next upgrade.”

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