As with any technology, it is easy to get carried away with its potential to change the world and how business operates. That is the challenge facing cloud computing today. Will the weight of expectations cause it to implode before it achieves its full potential? Is it really revolutionary on the roadmap of IT development or a mere evolution?

Aiming to put the issue in some context, Stephen Nunn, global managing director, infrastructure consulting, Accenture, shared his thoughts at the Accenture-The Edge Roundtable: “Moving to The Cloud. Cutting costs and creating agile organisations” on Dec 1.

Note: A video of the roundtable discussion can be found here.

Cloud computing is basically virtual servers available over the Internet. In other words, you run the software over the Internet and access it via a browser.

Says Nunn: “We live in very interesting times. A lot of economies worldwide are in various states of turmoil and therefore CIOs are really helping to drive the notion of cost efficiency and operational effectiveness. At the same time, CIOs are responding to the business needs of doing more for less while driving a level of agility that is new to many organisations.

Highlighting one trend that is driving IT in business today was the notion of moving away from a fixed to a variable price model when it comes to utilising IT. “So, if I can scale up as well as down, I need only pay for what I actually want to use and, unlike traditional IT environments which were fixed assets-based, we’re now looking at a paradigm shift away from fixed assets to a more variable asset procurement and usage approach,” says Nunn.

But is this an evolutionary or revolutionary wave? Nunn likes to look at history for a clue to what’s going to happen in the future. “If we look at the past, we started IT with the idea of a centralised computing model. We called it the mainframe. Then came the client-server model — providing capabilities to develop applications...”

However, the issue with the industry was, it didn’t really govern the way IT was distributed to the end-user. As a result, for many large organisations, what transpired was an out-of-control IT asset base, says Nunn.

This then led to a situation where many organisations in the last five years have been trying to control their underlying IT infrastructure through consolidation and transformational projects. Strangely enough, technology trends around virtualisation and orchestration are really making your data centre look like a mainframe yet again. With this in mind, if we now look at this next shift in technology, it is like somebody said, ‘let’s distribute IT out again,’” says Nunn.

Because of this, Nunn feels it is critical for IT professionals and business users to not only discuss the adoption of a cloud-based strategy but also how to manage it. This is to make sure that the lessons of the past are learnt and to come up with a better way of governing the new IT world so as not to fall into the same predicament that many organisations found themselves five years ago.

Cloud computing can be divided into four distinct areas. The first is infrastructure as a service. This, in essence, is about buying your infrastructure on tap where you use the service as needed. In other words, a service is sold on demand by the minute or by the hour.

The second layer is platform as a service: service providers are now adding some additional value through, maybe, a software development environment, particularly utilities.

The third area is software as a service: looking at applications being applied to that infrastructure and the variable cost model applied to the way consumers can use that particular application.

And finally, the business process capability whereby you actually buy a transaction-based billing system  that provides the business process as opposed to it being just an application.

“So, with this in mind, is this evolutionary or revolutionary? I think it is certainly evolutionary if you are a large enterprise client. Clearly, many organisations have legacy applications that are not anywhere close to being ready for cloud computing and, therefore, that’s the key challenge to many organisations,” says Nunn.

However, he feels it is revolutionary if you’re a new start-up. “You leapfrog some of the issues that other companies face and can acquire directly the benefits of the cloud-based strategy. So, with this in mind, let’s ask if cloud computing is real, what is the time factor we face and what are some of the challenges?”

Roundtable proceedings

Steve Nunn, head of global infrastructure consulting business, Accenture: I’m very pleased to be among the panellists here to discuss this important subject when we look at driving a cloud-style strategy. We are going to focus our points for discussion around agile IT and moving to cloud and finally on the question of whether IT is still relevant.

So maybe, let’s begin with the CIO at the table. Kah Chai, maybe you can give us your perspective, having listened to and read probably lots on this. What is your view in terms of the take up of the cloud strategy for end-user organisations? Is this real in the first place, what is the time factor we face and some of the challenges?

Tan Kah Chai, group CIO of Sime Darby: I think we've got to start by looking at the operating model of the company. In a conglomerate like Sime Darby with diverse business activities across 20 countries, it has to start by looking at how we run IT across the group.

In the past, we had disparate IT departments — data centres everywhere — and were running non-standard applications and infrastructure. It will not be possible to do cloud computing of any sort with this environment. So we started the journey by consolidating. We basically consolidated the IT infrastructure into major data centres in KL and also the DR (data/disaster recovery) centre. We also standardised the applications to group ERP applications platform, established a common messaging and collaboration platform and many other applications around business intelligence, financial consolidation and all that.

We’re at a stage where we are basically providing all these common infrastructure and application services through our business divisions and entities across the whole Asia-Pacific region and we’re in the process of expanding that to other regions. So, with this kind of model, we can actually start to standardise and also virtualise the server environment and that is actually the prerequisite for cloud computing. So, the next wave will be essentially looking at how we can actually put in more automation and also look at how we can actually subscribe to some of the external cloud.

In short, we are more or less pretty mature in our internal cloud. We’re also looking at opportunities outside the internal cloud by adopting some applications services like messaging and collaboration and office productivity software offered by Google. I think we’re pretty mature. In terms of infrastructure services, we’re also monitoring offerings in the market like Amazon but I think our performance is a key issue.

Providing the server capacity over Internet connectivity, is still a challenge. In terms of the robustness of the network in this part of the world, I don’t think anybody can do on-demand network services just yet. Still, we’re actively looking into some external cloud here.

Nunn: If we were to look at our roadmap and start at maybe moving work from the internal IT organisation to these cloud providers, what would be the key challenges that would stop that happening sooner than later?

Tan: I think security is the main concern. I think a lot of organisations in this part of the world still think that data has to reside within the company. The thought of data residing somewhere they don’t know is still a major concern. Another challenge is data location. Adopting public clouds also means that your data could be scattered in different places, for example, your email could be in one place, your video conferencing could be hosted in another place. If you go for those application clouds — like, for example, CRM or even ERP applications — you have different segments of data residing in different areas and different countries. Integrating this data will be a challenge.

Nunn: With regards to end-users and the use of Microsoft in the internal cloud environment adopting a much broader cloud strategy, what are you seeing out in the market that is driving users to a different way of working?

Lai Hoong Fai, senior ISV technology adviser at Microsoft Malaysia: The way Microsoft looks at this is that, naturally, a lot of things are not going to happen in a big bang manner. Like Kah Chai mentioned, it all starts from having a highly virtualised environment and there are a lot of benefits from having that. So before moving to the cloud, you need to have already adopted a highly virtualised environment, because you can save on a lot of the capital expenditure as well as the operating expenses. Then you move on to a private cloud and this is clearly the trend we’re seeing from a lot of our customers as well as the partners that we work with to deliver such solutions to our customers.

From here, you start working on the private cloud and the benefits will be in terms of more scalability and elasticity in computing resources. And then move into the public cloud. We do have our offerings in there as well, which is called Windows Azure.

A lot of people are looking at that from the sense that you have on-demand computing as and when you need it. Having said all this, there are of course, challenges. There are a lot of perceptions that hinder adoption somewhat and these have to do with the way things have always been. So when you ask if cloud computing is evolutionary or revolutionary, from a technology vendor's view, we tend to see it as something that is evolving. Sure, there will be challenges but we see the challenges also evolving to become something that can be resolved.

And I like to draw some analogies from other industries as well. A lot of people look at cloud computing as though it is a form of utility computing. And having your own data centres or private cloud gives us more control, more flexibility if you will, but it is like having your own power generator, as opposed to drawing power from the power grid [having your own generator is easier but costlier]. Once people understand this and realise that utilising the external cloud is essentially like purchasing utility resources from a utility company, then a lot of the barriers to adoption can be reduced. But, I find the perception is still a challenge.

Nunn: Moving on to an external service provider. Where do you see the demand from end-users coming from?

Datuk Praba Thiagarajah, CEO and founder of Basis Bay: I think that what we’re seeing is, and like Sime Darby perhaps, a lot of multinationals out there have moved from server consolidation to data consolidation and that bit is real. It’s coming out from organisations, mostly from the West. Again, like most technology trends. So I think that evolution of thought processes, consolidation of data centres and so on, is a push but it seems to be a vendor push or from users in locations where the structure is better placed.

We talk about how our network and infrastructure are not ready but it is coming, that’s a given. One thing that is coming down in price is the cost of communication. So without a doubt, that’s coming down. So what we are seeing is that mature companies today have very quickly realised that and they’re moving towards some form of consolidation. The end game is to create more efficiency. I think things like green and other things are added factors that are probably going to push this whole thing forward. And you are quite right, Nunn, about this being an evolution.

I think people need to realise that there are two kinds of customers today. The Gen Y boys are very Internet savvy, playing in that space. Then there’s the traditional businesses that haven’t changed, like the banking system. Some banks, they’re running 25, 30-year-old applications. You think about it, they haven’t moved yet.

The applications fit what they need and they work around it, perhaps as they evolve. So we’re going to see a structured evolution and I think we’re also going to see a structured revolution depending on whether we’re talking about the public or private cloud. So it’s a huge exciting space. I tell my guys in the organisation, we’re lucky to be born in this age and of this era because I think we’re really seeing an evolution and a revolution at almost the same time. It’s going to be a little different. I think managing and understanding that customers’ needs are a little different across the board and not attempting to fit one size across everybody. I think that’s the game.

What we are attempting to do as an IT outsourcing player — the end game, of course, is to be all that you can be to your customers.

I think with high-end quality services, customers need to see that it’s got to be a little different, especially with mission-critical applications. Just having the data centre which is essentially floor space is not so exciting. I think the exciting place is going to be what comes out of IT services and high-end services at that. It’s going to be different for different customers. But this is the exciting bit.

Nunn: So I guess that begs the question which I get asked quite a bit when we do this type of events — when is a cloud a cloud, and when is a cloud nothing more than a managed service. The cloud is very clearly a very commoditised capability. You can have it on this flavour and it’s going to be one or two shape fits all. Once you get into much more exotic-style infrastructure, I would put it to you that’s not going to be the cloud because it doesn’t meet that cloud financial model. It’s going to be a managed service.

So what are people's views on that sort of process because I think, one thing we always do within this industry is we’re very good at confusing everybody. We get on to a buzzword and then everything becomes part of that buzzword and I think it is very clear to me that if the cloud is to be more than just a buzzword, it has to have a clear definition and has to have a clear usage profile. So let me open up to those thoughts, Andre.

Andre Conti, Data Center Technology & Operations, Practice Lead, Southeast Asia, Australia & Korea, Accenture: The concept of cloud is really about being standardised and highly scalable. The entry points have to be very low; capital investment is very minimal. The speed of provisioning is very fast, going faster, which internal IT could provide. And basically as you said, you pay as you drink and if you outsource computers you pay by the hour, you pay by the CPU, you pay by the memory, you pay by the amount of data being uploaded, downloaded and so on.

If you don’t use it, you should not pay for it. Which is different from an outsourcing model where you outsource the whole thing and even if you don’t use it, you still pay the same amount every month. So that for me is the definition of the cloud, you really pay for the amount used. If you don’t use it, you may pay just a small reservation fee. That’s about it. It’s a flexibility advantage. To me that is the kind of definition of what the cloud is.

Nunn: In terms of defining the cloud as a very commoditised set of capabilities, do you think that will restrict our adoption or do you believe that it will actually help us adopt it at a greater pace?

Tan: I think, commoditising IT services is the way to go. That is the only way to cut the cost down, be more cost efficient. The challenge is how much can we standardise. In a large enterprise environment, it's quite a challenge, in fact, to standardise the application because different end-users’ environment requires different kind of applications. And we’ve been trying to standardise as much as possible by adopting group-wide standards, ERP platform, business performance management platform, information workplace and technologies and all that. But we always face challenges in terms of end-user environments  asking us for something different — for example different applications but less so on infrastructure because we still manage the infrastructure. So without standardisation, it will be very hard to do commoditisation of the IT services.

Nunn: What you‘re raising is also the notion that the service catalogue is almost a prerequisite for organisations going forward, sort of drive that level of standardisation and move to a much more virtualised world, if I’m correct on that.

Conti: Maybe one additional point here to get feedback from the group. I see a lot of companies and CIOs being forced to improve the internal IT department because otherwise they’re going to be seriously challenged by their own organisation with questions like, 'Why don’t you provide IT services at that price point and why don’t you provide an IT service that is highly scalable plus with provision'. I think, we are going to see a lot of internal programmes about building an internal cloud and becoming as good a service as people can provide out there. Otherwise, they’re going to lose their job or they’re going to lose their business because the business is going to find a cheaper, faster way to do what they do, you know, provide service to their customers.

Tan: In fact, our internal shared services centre is very much like a service provider to all the business divisions and subsidiaries out there, hundreds of them, across many countries. And one constant challenge is cost and how do we prove that we can actually provide that service at a cheaper cost compared to an external service provider with the same SLA (service level agreement). So it sort of forces us to continuously benchmark ourselves against external service providers to make sure that we’re as good, if not better, or else there’s no justification to keep it internal. You might as well outsource.

Nunn: Let’s move to another area which seems to be driving a lot of debate. Let’s go forward three to four years, as organisations start to really drive both the internal cloud and external cloud strategy and at some point, they may have three to four different cloud providers, all offering part of the solution, be it logistics, warehousing, whatever the functionality.

The concern is, ‘Ok, I understand that it may be good for me to move to an external cloud provider either providing me with some infrastructure or maybe the applications for our business process. So who takes responsibility to integrate all those external clouds and provide back to me the assurance that this is going to be an end-to-end capability that I can rely on?’ I’ll be interested to get a perspective on whether we’re seeing that in the marketplace today, the challenge and maybe from an organisation such as yourself, how you see that could be driving some of your business strategy.

Praba: We see this as an extremely opportunistic period because very few people actually are in that space and here I speak for Basis Bay and to an extent we play in the enterprise space. We also play in the Wintel space and we can play with Microsoft, we can play with Oracle. So we’re vendor agnostic and we want to keep that. We want to be closer to our clients and understand what they need and what their pain points are. As soon as we understand what they want to do, then we are in a better position to advise them, especially from a business point of view. So nothing much has really changed except that all this utility-based stuff essentially brings you back to one very key question: Should we outsource?

Our game plan is not trying to be everything to everyone and we don’t want to sell our applications, we want to work with application providers and provide infrastructure as a service and work everything well below that. It works in our favour as well because as soon as we invest in data centres and invest in technology that helps with consolidation with efficiency and so on.

At the enterprise level, I had a call recently from a CIO of a very large financial institute that is hosting from our environment. He said there are possibilities, that he needs the resources, that he needs smart hands, that he needs people to do various things. So, we are getting deeper into pure data centre play, pure hosting and it is up our alley. This kind of underlines what I see as opportunities and is just the tip of the iceberg because there is a whole bunch of stuff happening when you consolidate, move, pick up.

Nunn: So it seems to me that what you are suggesting in the key wave here at the moment is this notion of infrastructure as a service.

Praba: I think that would work a lot easier because software as a service as I said earlier, is a different play and it has its maturity levels. That’s how we see it.

Nunn: I think that would be a general trend.

Conti: I would agree that a lot of companies would start at that level first and own the applications, the data, and just rent basically computer resources. Why would they want to own a data centre and face power and provisioning issues. So it can answer some of the data privacy or data security issues. When they are ready for the external cloud, selecting the right provider based on trust becomes very important. You need to really make a good assessment on the market so that you don’t find yourself in a dead end by making a poor cloud or infrastructure service provider choice.

Praba: Some of the definitions of cloud today don’t make sense. I think things like utility-based computing, outsourcing, I mean those are standard words which people can understand. I think the cloud is a sexy word that helps you put it into perspective.

Nunn: I think you are right. That’s a very good point. Again, what is cloud and when to use the term 'the cloud' when it should be maybe a managed service.
Lai: I think we all admit on this panel is that knowing the cloud is a complex environment — there are a lot of different definitions of it. But I think, most of the people pretty much have stuck on one definition which is looking at attributes of the cloud such as scalability and elasticity and not only that, is delivered over Internet technologies.

I think we all know it’s a complex environment and how people deal with complexities is often by having an abstract layer. There are two ways about it. One is to have an abstract layer over it to make it easier for people to understand and also to adopt cloud computing. The other is actually standards and from the standards perspective it’s actually to be seen from two areas, one is actually from standards that are evolving in the cloud space, the other is the standardisation. I believe that Kah Chai and also Andre have spoken about this as well... standardisation of IT processes as well as business processes.

So from the technology vendor, we understand that is a prerequisite of our end-users and we are actually helping that materialise. At the same time, the way to move forward in cloud computing is to really have those layers of abstraction. I believe that is very important instead of having that standards battle, where typically, when it comes to technology, it always starts with a standards battle. We believe that by having the abstraction layer, this allows the standards to evolve and you have rightly mentioned that where we are today is an evolution.

And the most recent one would be from service-oriented architecture or so and a lot of those same concepts can be applied and as per when we apply more abstraction onto it, it allows the standards to mature as well. And that is to benefit our customers in the end.

Tan: Steve, your point earlier on in the next three to five years or probably 10 years, you are going to see a lot of public clouds coming out. And I think the challenge that lies ahead is basically how IT, system integrators or service providers can stitch all these things together and different public clouds for example, CRM or even procurement or the ERP-based processes, and HR or finance, and all that will require some customisation for the end-user.

Because like it or not today, our ERP environment is also not a standard form that fits all. Every organisation runs differently — the financial processes, the procurement processes — some are more common, some are specific to the business only. I don’t really think the public cloud in the future can cater for hundreds of organisations and everywhere across the world that subscribe to the same cloud. So there will be some sort of services required by the SI or IT departments to basically integrate all these clouds together to make it work for them.

Nunn: And I guess that’s one of the key debates we’re being challenged by — who will be that integrator, will it be the internal IT organisation or will it be a new business opportunity and requirement that serves the industries to actually have a third party that is able to stitch the clouds together in an absolute form, to provide that end-to-end service and take the risk. What we were hearing recently while doing a similar set of roundtable was this whole notion of commercial risk — who is taking the risk to that end-to-end service delivery. Is it still on your shoulders as a CIO? Or are you actually handing that off to a third party to help you drive that level of efficiency.

Tan: I think that’s only one aspect — we’re talking about applications. There is infrastructure, there is platform and there’s also BPO (referring to the four areas of cloud computing). If you look across the whole spectrum of an external cloud and trying to stitch all these things together is a different environment all together.

For example, you can actually subscribe to some infrastructure services, buy some Intel, server capacity from Amazon and get some platform vendors to provide you the development platform and an applications provider with some ERP modules and all that. Integrating this whole lot from the server capacity to network to applications and to the development platform is a huge task. Even internally, when we are developing our employee applications, we ended up having to spend a lot of effort trouble shooting where the problem is.

Whether it is server, whether it is the network or whether it is an application or on the desktop. So the root cause of the issue error requires a lot of time to troubleshoot and more. So, if you are subscribing all these services from different cloud providers, from infrastructure to platform application... it’s going to be very messy.

Nunn: It’s one of the key challenges moving forward especially over time because I think you rightly point out that at the moment we are very much in the infancy of the infrastructure as a service but as we start moving up the stack, then the challenges appear.

Praba: The CIO is probably moving closer towards what used to be a system analyst’s function. Getting the user requirements, ensuring that is met. I think at the end of it all, the sole interface of business will be a representative of the organisation. No matter what you outsource, you always have that. So I think the challenges you are talking about is something that’s now very prevalent. The bigger challenges that CIOs are having would be putting stuff together in a roadmap form and understanding where the business is going. This is the biggest challenge because it’s a support function.

Lai: With loads of computers or machines, the way we look at this is as a piece of fabric. If all these data centres are fabrics, essentially you have multiple fabrics. But what’s all this fabric about if it’s not being woven together to form a piece of clothing. So I think that’s where the challenge is. We’ve got lots of pieces of fabric and how do we then make something useful out of it.

Nunn: This essentially turns attention up the stack to applications  because that really starts to drive the value add. Clearly from the Microsoft perspective, the launch of Azure, I think some of the strategic intent there was to provide environments that could be developed internally and externally. Maybe you can talk a bit about the strategy behind that.

Lai: Let’s not forget about the on-premise application — ensuring customers have what we have (in the Cloud, customers don’t need to install applications on separate computers, since it’s all on the Internet).

Naturally, some people would be thinking about a transition of on-premise applications and solutions onto the cloud. Microsoft’s strategy in all this is very simple — leverage and seamlessness. This applies to both our customers and partners who are building such solutions. Seamlessness is about having a seamless user experience across multiple devices. This is looking at mobile phones, desktops and large screens that we have on the wall.

On the other hand, what are the sort of things that we can leverage? Are we re-inventing the wheel? We are saying let’s leverage on existing skills in the organisation where I believe IT will continue to be relevant.

For enterprise customers' perspective, how do they leverage on investments that they already have. We see that on-premise applications and solutions will continue to be there but there will be linkages to all these fabrics that we have up there on the clouds, whether they are private or public clouds or a highly virtualised environment.

To the end-users, what does a cloud mean to them? Is it data centres? If I am an end-user, I will be looking at what sort of user experience I get. So this forms pretty much Microsoft’s strategy to really make it easier for the business, end-users, just to see what cloud is all about.

Tan: To the end-user environment, I think something like this makes sense. Eventually, there will be clouds of infrastructure, service providers, which may also partner software providers to deliver end-to-end services. I think this is the way to go in the future. At the end-user environment, we like simplicity. We do not want to stitch all the infrastructure applications together to make it work for us. Ideally, there should be a service provider out there who can provide these end-to-end services.

Conti: Low-cost airlines are probably the best example of leveraging on the cloud concept. For example, one company was looking at processes for a low-cost airline where transactions could be sourced externally. The easy one will be ticketing. Basically, the airline will pay the company for the tickets issued to passengers. It does not need to pay for provisioning and other charges. This goes for procurement and other functions.

This company is like a broker of the various services that it can get from the Internet. There is no device or desktop to be managed in any of the locations where it has customers. There is only a laptop, a point of sales and a network. It becomes the owner of an end-to-end business process that needs to be delivered and sourcing it from the best places, the more strategic vendors, and driving its cost down.

The key thing is that they don’t have the drag of 40 years of history (legacy systems) when it comes to managing their environment. They can start from scratch. Start-ups will embrace this model whereas more established companies have a history legacy of mainframe... they will embrace this model but in an evolutionary manner.

Nunn: What are some of the regulatory issues around cloud computing? We have already seen in Europe how some users are pulling back their applications from the cloud and hosting them internally as they have realised their application data is residing where people can see it. It will be interesting to hear your views on Malaysian business requirements and the regulatory issues which will drive a cloud strategy locally rather than allow it to be anywhere.

Praba: When you talk about data privacy and regulations, I think it can be said that financial institutions have very high standards but yet, today many financial institutions are moving and consolidating data centres. They are looking for good data centre infrastructure space. The challenge in the past was getting permission of the central banks, but what has clearly changed over the last five to six years is this  huge acceptance by them. I think there has been some barter trade between financial institutions and central banks, but essentially they now run data centres outside of the countries they run their businesses in.

I was in the US for a conference earlier this year and broached the idea to the CIO of a state about moving his data centre to Malaysia. He said he was going to outsource everything and would consider us. That’s how much things are changing in this space。

Nunn: I was fortunate to be part of the World Economic Forum earlier this year and was discussing cloud [computing] with some CIOs. It was recognised that this was not a technology issue but a security, data privacy and compliance issue. Is the data secure and backed up and available when you needed it?

Moving on to this notion of IT services as opposed to service storage, etc. I would like to get your views on how you see the IT organisation within companies transform or change in order to adopt this approach and make it a success.

Tan: The role of IT will have to change. We have to remodel IT, realign the people, partner with the business as stakeholders and understand their needs so we can bridge IT and business. This is the role of IT in the future. With the cloud coming more into the picture, you will also see IT playing a role in IT governance and security.

Nunn: So, driving the business and taking on a services role in reskilling the IT organisation for tomorrow’s world. This will require forward planning.

Tan: I think in five years, you will see some of the common applications like messaging, collaboration, productivity tools and storage moving to the cloud. This means the bulk of our IT people will be moving to external providers. There is a need for IT people to move up the value chain to leverage their functional and business knowledge to engage the business and find value for IT。

Nunn: From a service provider’s perspective, do you see that approach changing how you drive business to the market?

Praba: I think the major challenge is at which part does the organisation give out its mission critical servers. This evolution will be different for different organisations and will be done in stages. Now for us, how do we manage this change? Well, I think the CIO today is changing his shape and his needs. Vendors need to plug into that. Another observation is that I think the schools are going to change, too. You will get people coming out with degrees that are not software-based. So, going forward, it is going to be a completely different space.

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The cloud-computing trend

Amran Hassan, the technology consulting lead for Accenture in Malaysia, was a keen observer at the Accenture-The Edge Cloud Computing roundtable and he shared his thoughts on on the cloud-computing trend.

NetV@lue2.0: What are the key concerns of Malaysian companies when you talk to them about cloud computing?

Amran: We need to first appreciate that there are generally two types of cloud computing — internal and external. Internal clouds are services that are provided by an IT organisation to its own organisation. External clouds are services that can be subscribed through the Internet, therefore this is where companies use cloud services that come from outside their organisation. Malaysian companies favour internal clouds more than external ones. However, there are still some concerns:

•  Perceived high capital expenditure in setting up an internal cloud;
•  Problems in transforming from a hardware or server-based organisation to a service-based one;
•  Understanding what applications can and cannot sit on cloud technologies;
•  Stability of cloud technologies to support business critical applications; and
•  The need to have a good network connectivity within the organisation.

When using external clouds, some of the issues are:
•  Security and privacy of company data. If it is outside the company’s own firewall, will it be easier for data to be breached?
•  Cloud service providers may be based outside Malaysia, and some are sceptical of the level of support that they can get from them;
•  Company or national data policies that may not permit certain types of data to reside outside the company or country;
•  Reliance on good Internet connectivity to receive uninterrupted and fast services; and
•  Integration of external cloud services with applications which reside within the company.

Despite these concerns, CIOs and business leaders are seriously considering moving to cloud computing, given its benefits — savings on operating costs, highly scalable and agile in meeting business needs.

Do you see the Malaysian government becoming a cloud adopter? What value can there be for it?

I certainly do. Our government has always pushed for greater information communications and technology (ICT) penetration and adoption with the establishment of the Multimedia Super Corridor, the high-speed broadband project and other initiatives. I believe cloud computing is already on its radar screen. If we look at the three key areas where cloud computing has the highest level of corporate interest at the moment, they are email services, virtual development and test environments, and web services.

Is it conceivable for the government to utilise an email service from the cloud rather than hosting its own? Why should every single department, state or government body carry the burden of running and maintaining its own email services?

Yes, it is conceivable. It is feasible for the government to utilise cloud computing to quickly provide development and testing environments for many of its ICT projects. Can you imagine the amount of effort, cost and time saved... if a project can quickly tap computing resources when it wants it and for exactly the required capacity? Multiply that by the number of ICT projects that the government has to execute.

And how about web services? For public facing websites, the government can easily utilise the capacity provided by the cloud when it needs to. Imagine the annual peak loads of submitting income tax information to the Internal Revenue Board. Or online payment of summonses when a deadline is near. These peak loads can easily be handled by temporarily utilising the computing power of the cloud.

Apart from being a subscriber of cloud services, the government can also be a cloud provider itself. Not necessarily to the general public but to the various government branches.

Of course, the government has an obligation to ensure that data pertaining to national security is always safe and secure. Policies, guidelines and governance of the adoption of cloud computing must be created. However, this should be part of a larger government agenda on cloud computing. Today, there are not many examples of governments using cloud computing, but we certainly wouldn’t be the first. The US and UK governments have already started to lay down policies on cloud computing.