Global Entrepreneurship Week discussion about whether The Cloud is a Boon or Bust for UK Business?
With 1,100 British businesses collapsing every day and banks still not altogether lending, surely the key opportunity for business growth is The Cloud. But does the Cloud really have a silver lining or could it rain all over the people it professes to help?
This issue and more is being discussed at ‘Ahead in the Clouds: Is the Cloud the Future for UK Business?’ a Champagne Breakfast at 7:45am-9:00am on Wednesday 26th November 2011 at the ‘skyline’ offices of Telemetry, 39th Floor, Tower 42, London, EC2N 1HQ. This is one of the key events on during Global Entrepreneurship Week (14th-18th November 2011). Headling the is James Caan, former BBC Dragons’ Den star and private equity investor.
Mr. Caan is joined by Anne Boden, one of the world’s most recognised and respected figures in global banking; Rich Alvin, editor of Business Matters Magazine and expert on The Cloud and Eric Van Der Kleij, CEO, of the UK Government’s Tech City Investment Organisation. The talk is being hosted by Anthony Rushton, co-founder of Telemetry, ranked in the Top 10 fastest growing technology companies in the UK by the Sunday Times Tech Track 100.
“Cloud computing is completely changing the UK business landscape,” says James Caan, who utilises The Cloud for his private equity firm Hamilton Bradshaw and has just released his own Business Secrets App for iPhone and Google Android.
For start-ups, cloud services’ primary appeal is in sparing start up businesses the expense of building and hosting their own information technology.
The Cloud also allows small businesses and start-ups to operate on an equal playing field with multinationals.
“A business that would traditionally need one to three million pounds to launch, now with The Cloud might you only need £5,000-£10,000 to really fly,” says James Caan, “because cloud computing uses economies of scale. Cloud computing’s pay-as-you-grow scalable business model turns the traditional approach to enterprise IT upside down.”
UK businesses are stampeding into The Cloud as a result. According to a Virgin Media Business survey of 5,000 UK businesses, 66% label technology as vital to the success of their business – with 32% of business leaders saying Cloud Computing is the most valued aspect.
According to Caan, “what’s very useful to me as an entrepreneur is that cloud computing enables information and data access anywhere in the world, as long as there is an internet connection. I was recently abroad and I wanted to show my colleague some fairly large documents. I was able to access the files and information within minutes. Importantly, Companies no longer need to have large bulky archives with all their databases written on papers. Cloud computing enables all this information to be stored online in a digital format, with no real limitations on size”.
As well as start-up businesses using private and public Cloud services provided by the likes of Google Docs, Amazon Web Services, Apple iCloud and Microsoft, multinationals are equally adopting a ‘Cloud First’ strategy. Key proponents include Netflix, News International, NASA, Mothercare, Morgan Stanley, Barclays Bank, HSBC. Infact over 50% of blue chip multi-nationals have cloud usage already for either IaaS (Infrastructure as a Service) or SaaS (Software as a Service). In some companies, they are almost 70-80% virtualised. The UK government is in on the cost savings provided by The Cloud, following in the footsteps of the USA. George Osbourne has just announced the G-Cloud (or government cloud) will see over 50% of government IT spending move to cloud computing by 2015.
As well as cost savings, job creation is a huge driver for the government and the private sector. If the UK, Germany, France, Italy and Spain continue to adopt cloud technology as expected, they will generate 2.4million jobs in Europe over the next four years and £151.3bn in annual revenue, according to an EMC survey.
With so much seemingly going for the Cloud, what is the downside?
Security is the key concern. Sensitive data access, data segregation, privacy, recovery, accountability, malicious insiders are all concerns.
Whilst security has increased ten-fold since Cloud computing took off in 2008, today the biggest threat is cybersecurity.
“Business owners are simply not doing enough with their business security. It’s at the bottom of their priority list,” says James Caan. “But it should be at the top. A company’s information is one of their most valuable assets. Moving data outside the company’s physical premises poses security concerns. Cloud proponents become targets for hackers. The challenge for the government will be sharing huge amounts of citizen data consistently, accurately and securely across a range of cloud services”.
Caan agrees that security is a potential impediment to Cloud growth. He says: “The focus on security is something more SMEs should be aware of, even if their time is limited. I think all companies, not just start-ups, aren’t doing enough for their business information security.
In the case of small businesses this may be down to the perception that they aren’t in a high risk position. As a business owner you wouldn’t leave the front door of your office open at night so why would you put your information assets at risk?”
A key solution is the use of multiple cloud providers. “Spreading the risk is important and this can be achieved by spreading data amongst a number of Cloud suppliers,” says Caan.
Geographical ‘Availability Zones’ are an important issue for consideration by UK businesses so that “companies store their data in the territory in which they operate for compliance, taxation and IP challenges. Another headache for larger companies is the conversion from a Capital Expenditure Budget to an Opex (operational expenditure) budget which means a subscriber rental model on the balance sheet. UK businesses also argue that Cloud providers need to be more transparent on costs.
“The onus is now on Cloud providers to provide a greater transparency of cost, it’s all about trust” says Caan. According to a survey by Vanson Bourne, 71% of British CIO’s are seeking a greater transparency from cloud companies when it comes to data protection, whilst 66% want clear proof of data security and 45% want more visibility on pricing.
As UK businesses stampede into the Cloud, Caan advocates a careful balance. By creating a hybrid of combining your own network for the most important and sensitive information whilst using The Cloud for storage and back-up. “It doesn’t need to be all of nothing. There’s nothing wrong with utilising your own data storage and combining that with Cloud services. It’s not head first into the Cloud or nothing,” says Caan.
Overall it is clear that The Cloud is a huge opportunity for UK businesses, particularly those looking for a way to market themselves globally at a low cost. “But it needs to be balanced and used wisely”.