Most Canadians know something about cloud computing – our Gmail, Yahoo! or Hotmail accounts are all sitting on a virtual server somewhere – but businesses have been slow to adopt this technology. A 2012 Bank of Montreal report found that half of all business owners weren't familiar with cloud computing, while only 10 per cent of companies planned to use it.
Wayne Ingram, managing director of technology for Accenture Canada, says it's only a matter of time until those numbers tick upward. Storing information on a virtual server, rather than on servers stored in the office basement, is cheaper and more efficient. And with people working on multiple devices and from disparate locations, logging on to a network with a VPN key, or encryption key, isn't practical any more.
Mr. Ingram told us how companies can adopt cloud-based software, what's holding people back and where this technology will go in the future.
Are companies still as curious about the cloud as they have been in the past?
Absolutely. It's a hot topic, and it's on the forefront of people's minds. This year will produce unprecedented change in technology – innovation in cloud technology, convergence, smartphones, tablets and big data. Most of our clients have their foot in the cloud in some capacity – some don't even necessarily know they have it, like if they use cloud-based e-mail – but everyone's asking, 'How do I leverage the cloud?'
Most people know that the cloud can reduce costs, but what other benefits are there?
Yes, cost is an element, but the real value is that it helps companies drive innovation easily and quickly. You can 'trial' the software and decide whether you want this type of capability – just let a handful of customer service reps use it – or stop using it if it's not playing out how you thought it would.
Where do companies usually start?
Typically it's in the collaboration space. People move around all the time, so cloud-based e-mail, video conferencing and internal messaging products are popular. You can use it inside or outside your four walls and with customers. The customer relationship management (CRM) space has also been an early adopting area.
But now clients are tying it back into their business benefits. For example, we have a client that does a lot of mergers and acquisitions. They have a big ERP system (enterprise resource planning, a program that manages financing and accounting among other things), but small acquisitions may not make sense to be on it. So they're asking how can they use the cloud – which is cheaper – and have it feed back into their larger ERP system. They don't need to go through all of the steps that a larger ERP offering requires.
Can a company move everything to the cloud?
We are seeing more sophistication and capabilities as the cloud grows, but most organizations will use a hybrid model. First of all, to go and replace all of a company's technology will be too disruptive and too difficult. There are also some downsides, such as regulatory and security issues. What if you're not happy with the cloud provider? How do you move off that? What happens if something goes wrong with the provider? What's the disaster recovery process? So there are still a lot of things to think about.
Should you be asking these questions of the cloud computing company before you sign on?
Absolutely. Build that cloud provider as a business partner. You have to fully understand what the benefits are and what the downsides are as well. You want this to be a low-risk decision. A company like Salesforce has a very active team; this won't be the first time they have heard these questions, so they understand the issues and expect that they'll be asked about them.
Some organizations won't store information on servers outside the country because of regulatory issues.
The U.S. Patriot Act is almost 12 years old now, but that's the one that has a lot of people cautious. Regulations follow the curve. They're behind because they have to deal with processes and laws, but they do evolve and I believe they will evolve. In many cases you can find ways to get around some of this if it's truly an impediment. Companies are very creative, and they're finding ways to implement the cloud in a way that's still consistent with the regulatory world.
The 'private cloud' can help companies overcome some of these issues. What is that?
It's leveraging similar technologies as the public cloud, but you're putting it within your own data centre. Governments do this because of data privacy issues, even though public clouds (cloud computing software run by a third party) are protected and secure. For bigger companies, this is a huge step for them, because it's really tailored to them. Large enterprises may have thousands of applications and rather than have a server dedicated to each one, they can store programs in the cloud and increase server space much more easily. It's not as cheap as using the public cloud, but for people who aren't ready to put something on a third-party server, this presents an opportunity to still use the cloud.
Where do you think this technology will be in, say, five years?
We will see a takeup in this technology. Most people think that by 2016, 20 per cent of workloads will be delivered on the cloud – it's about 4 per cent today. What's driving this? Traditional providers, like an Oracle or an SAP, have very large cloud plays. Companies will also need to upgrade and update their technology. So as we go through the refresh cycles, people will look to the cloud.
It will be nice not to have to worry about using a VPN key to connect to a network any more.
That's true and that's the game changer. The cloud is accessible whether you're at home, in the office, at the airport or in another country, and – this is becoming more important – on any device.