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Trust and risk in the cloud

Are cheap megahosters good for your business?

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Combat fraud and increase customer satisfaction

Hosted apps Stick enough kit and multi-tenant software in one huge data centre and there is no arguing with the economies of scale that can be achieved. Megahosters like Google and Microsoft playing this game can deliver web search capability and online consumer services such as email, office and social networking tools at minimal cost per user.

Even that cost is then covered through advertising and the sale of user and usage information to advertisers. As consumers, we get highly functional “free” services that most of us now take for granted. These same megahosters have recently upped the ante on the business services front.

Exploiting the same economies of scale, enterprise class email, office and collaboration solutions are being offered online for less than £35 per user per year, a lot less than it takes even the largest IT department to deliver through traditional means.

Cloud advocates say switching to this software as a service (SaaS) model is therefore a no-brainer. They go on to predict the demise of on-premise solutions such as Microsoft Office, Exchange and Lotus Domino/Notes.

So why aren’t businesses biting the arm off the megahosters to take these services on board? Sure, some prominent names such as The Guardian, Jaguar Land Rover, Motorola and the City of Los Angeles have committed to Google Apps, and these have been heavily promoted in the press. Microsoft’s recently announced Office 365 also appears to have been received with interest.

But we are hardly seeing a massive rush online if feedback from Reg Readers is anything to go by.

A recent study on desktop evolution, for example, found many were planning Microsoft Office upgrades but few were looking at a switch to online alternatives. Inertia and habit are partly responsible for this, as is the frequently heard advice “if it ain’t broke, don’t fix it”.

But IT departments have taken a lot of change and disruption on board in other areas, especially when large cost savings are on offer. So why the lack of enthusiasm for the megahosters? The problem here is the perception of risk, fuelled by flurries of media stories highlighting privacy and security concerns. Whether it is subscriber information leaks, thoughtless changes in policy leading to privacy exposures or simply concerns about how our data is being used and abused, the impression created is that megahosters are not to be trusted.

The perception that the providers’ heritage and core activity is consumer focused also casts doubt on whether they really understand the needs of businesses.

Beyond these issues are other considerations, such as the need to know where your data is stored and being assured of data destruction on deletion for compliance reasons. There are then the practicalities of integrating online services with corporate policy management systems, especially for larger organisations. The last thing anyone needs is having to maintain multiple sets of access and security rights, or being forced to run separate set of tools to manage in-house systems and hosted services. This would only aggravate the fragmentation that is already at the root of so many inefficiencies and exposures in IT.

Against this background, we will be looking at the perception and reality of online services over the coming weeks in our latest reader workshop. Along the way we will be looking at how capabilities, practicalities and challenges compare between the megahosters, more niche business service providers and doing things in house. The idea is to come up with an objective analysis with the help of reader input of how to evaluate the options available, particularly from a risk point of view.

So, if you have any thoughts in relation to your own experiences, or simply want to put forward an area for further exploration, let us know in the comment area below. ®

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