Cloud computing – challenges and opportunities

Cloud-based services provide some advantage over standard IT services such as scalability, cost reduction, and lower investment costs (operating costs instead of investment costs). The large cloud providers do by now offer a very diverse portfolio from Infrastructure-as-a-Service, via Platform-as-a-Service, all the way to Software-as-a-Service. With the AWS Marketplace, Amazon does, for example, offer the opportunity to provision more than 1,500 software products in 25 categories at the push of a button. In recent years, the cloud market has grown significantly and is playing a more and more important role.

IDC Research expects a growth of the cloud market to EUR 109 billion in 2015. Of that, the Infrastructure-as-a-Service market (server, storage, Ethernet switch) alone is expected to grow by 21 % to a total of EUR 29 billion. Crisp Research AG expects a growth of cloud computing in Germany from EUR 10 billion to EUR 28 billion in 2018. According to Synergie Research Group, Amazon is dominating the cloud provider market with a 28 % market share, followed by Microsoft (10 %), IBM (7 %), Google (5 %) and Salesforce (4 %).

Cost reduction

The utilisation of cloud services can lead to a situation where the IT costs for the managing and administration of IT systems are shrinking. Companies do not have to invest in the purchase of expensive systems but can rather rely on the resources of the cloud provider. Cloud providers promise cost reductions, for example by means of:

• Costs for system updates and hardware updates may be included in the cloud agreement
• Labour costs for specialists can be reduced
• Reduction of energy costs
• Reduction of costs due to quick scalability so that only the resources actually needed have to be remunerated

Scalability

Based on business requirements, „as-a-Service“ solutions can be scaled up and scaled down quickly and flexibly. Instead of the potentially time-consuming process of system sizing, system ordering and system installation, the services of the cloud provider can be obtained quickly and flexibly. The time gained thereby may allow companies to concentrate more on their core competencies.

But the realisation of cost reductions and quick scalability are no sure-fire successes. Therefore, the implementation of cloud-based services should be weighed carefully because cloud-based services cannot be implemented without risk. The integration of cloud services and the ensuring a fail-safe operation are more complex than a lot of cloud providers often proclaim. 

The decision regarding the utilisation of cloud service is of a strategic nature and therefore the development of the cloud strategy is the first novum: In your presentation, at events, as well as in publications, you bring up the element of „improvisation“ time and again in connection with management and leadership. One of your repeatedly used event partners is – significantly – the „placebo“ improv theatre, which stimulates and trains the improvisation ability of the attendees in its workshops. Why improvisation in business?

amework conditions are similar to those in classic IT outsourcing. Typical requirements are, for example:

• Development of the business cases (cost and benefit consideration) over the whole lifecycle
• Control and safety of the data
• Compliance with data protection requirements
• Integration into the existing IT system landscape
• Migration planning
• Adaptation of the service management processes, for example integrated incident management, change management, and emergency management
• Definition and monitoring of service level agreements
• Taking into consideration of employees
• Change management
• Selection of the right cloud provider
• Auditing of the cloud provider
• Exit agreement

A significant step in the decision whether and which data is migrated into the cloud is the determination of the protection requirements. In the classification of the protection requirements, the impacts that the loss or modification of the data brings with it play a central role. The German Federal Agency for Security in Information Technology (BSI – Bundesamt für Sicherheit in der Informationstechnik) mentions the following six risks that should be included in a risk analysis:

• Access to the data by the cloud provider
• Access options for the authorities due to (where applicable: foreign) jurisdiction that applies to the cloud provider
• Non-availability of the data and services
• Compromise of the authentication
• Data loss
• Data Manipulation

It will therefore, in the near future, be a challenge for a lot of companies to check to what extent it makes sense [for them] to integrate cloud-based services.