Cloud-computing Demand Rises As Economy Bites

Jay Decenella, IT audit expert
August 20, 2012 /

Double-dip recession is forcing a growing number of businesses to turn to cloud-based solutions in their IT systems.

According to KPMG’s latest Technology Issues Monitor, the dominant model in cloud computing is now ‘Software as a Service’ (SaaS) which provides businesses with on-demand software. SaaS requires no installation or program maintenance, nor licence fees.

It is a market worth $12.3 billion, worldwide in 2011. Analysts expect SaaS market to reach $14.5 billion before 2012 ends.

Steve Watmough, partner in KPMG’s CIO Advisory team, says: “As the current tight economic conditions are felt across the globe, tight IT budgets are pushing demand for cloud computing services. The attraction, especially for the smaller business, lies in organisations no longer needing to find funds for infrastructure, deployment or training.

“And with an increasingly mobile workforce, there is a greater need to access data from smart-phones or tablets. SaaS allows for the integration of powerful business apps on mobile devices meaning that it is only likely to increase in popularity with the corporate environment. The technology ensures employees can work on the same documents in real-time from anywhere on any internet-connected device – and all for a monthly subscription, which can be adjusted with ease.”

KPMG’s analysis shows that as the demand for SaaS grows, service providers are outsmarting each other to offer new capabilities. Most of them resort to industry-specific solutions to come out unique from the rest.

However, a number of high profile problems are sure to beset customers – security, network stability, the limited integration with their existing systems and the time it takes for organisations to implement new technology.

Watmough concludes: “The need for security means businesses are pushing for stricter governance controls around cloud computing and SaaS. But security is not where concerns stop and customers are also increasingly emphasising ‘uptime’ and performance in their negotiations with suppliers. They want opt out clauses which weren’t so easy to secure with infrastructure investments and suppliers would be well advised to take these concerns seriously or lose out to the competition.”

 

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