Cloud computing - threats and opportunites

By Steve Hodgkinson, Research Director, Ovum | Jun 19, 2009

CIOs and policy executives should see the cloud as both a threat and an opportunity, and here’s why:

Firstly, cloud services are a threat to CIOs because the cloud will come to be viewed as the fastest, cheapest and easiest way to source basic commodity ICT services. The cloud will set expectations benchmarks.

CIOs will come under increasing pressure to explain why in-house ICT services take so long to deliver, are so much more expensive and are so difficult to consume compared to those available from cloud services providers. If CIOs don’t pay attention they will find that their Agencies have turned to the cloud without them even knowing that it has happened – creating fragmented procurement and potential privacy and security risks.

CIOs need to be on the front foot to ensure that cloud services are used for appropriate applications and to guide Agencies in the use of the cloud.  Cloud services can form a useful complement to in-house ICT, particularly for applications that are urgent, have tight budgets, do not involve sensitive data or are aimed at collaboration across multiple agencies. 

Secondly, cloud services are a threat to policy executives responsible for ICT industry development because clouds are provided by global ICT companies – typically headquartered in the USA – and they create the risk of invisible off-shoring of Australia’s ICT industry.

Australia will need to develop on-shore cloud computing centres to protect and grow its domestic ICT industry.  Government is one of the few institutions with the operational scale required to create cloud computing services – a ‘G-Cloud’ - so policy executives will need to take a proactive interest in this before our ICT industry is sucked off-shore without anyone noticing.