UK CFOs still wary of the cloud

Research carried out by SunGard Availability Services suggests that many businesses are unwilling to place their IT infrastructure in the cloud because of fears over data security, downtime and loss of control.

The research, conducted among 100 chief financial officers in mid-sized UK headquartered organisations, found that many CFOs are still put off by the perceived security risks of outsourcing the management of their IT infrastructure: 56% of respondents cited fears around the security of sensitive customer or commercial data. The research also showed that high-profile media stories around IT outages or data losses are heightening these fears, with nearly half (45%) of the respondents admitting that such cases make them more inclined to keep their data in-house, despite the cost implications.

Many of those responsible for financing IT expenditure say they do not have a clear picture of the cloud, despite cloud computing being frequently cited as a key technology to reduce IT spend. The lack of understanding is particularly concerning, given that the survey also revealed that almost two thirds (62%) of CFOs expect no increase in IT budgets over the next three years. Only one third (34%) of UK CFOs surveyed admit to understanding fully the benefits of moving their IT into the cloud and less than a third (28%) say they know the difference between private and public clouds – two very different approaches to cloud computing, with very different data security and integrity attributes.

Worries around control of data are also holding back investment. Loss of control concerns nearly 60% of CFOs when handing data over to a third party, and only 15% of CFOs surveyed said they would be happy to have all of their data in the hands of a third party.

Commenting on the results, Keith Tilley, managing director, UK and executive vice-president Europe for SunGard Availability Services, said, “It’s clear there remains a great deal of uncertainty around the cloud among the CFO community. With over half of CFOs expecting IT budgets to remain the same or shrink over the coming three years, IT vendors and senior in-house IT employees need to do much more to educate financial decision makers about the benefits of moving to an appropriate outsourced IT environment and the related use of outsourcing partners.”

“The findings suggest that organisations are looking for a solution which offers the key benefits of the cloud – such as cost savings and increased agility - but where data is stored in a fully-resilient, secure data centre, where they can have control over it. This is exactly what the private cloud offers, but it seems nearly three-quarters of UK CFOs are missing out on this as they wrestle with the distinction between private and public cloud computing.

“Our recent cloud conference demonstrated that cloud adoption has become a live issue for many finance professionals. Many are looking at the cloud to provide mainstream financial applications which were until recently very much restricted to traditional ‘on premises’ delivery,” commented Dr Paul Booth, of the IT faculty at the Institute of Chartered Accountants in England and Wales. “For our members the main issues are clear: principally concerns over security and loss of control. However, the large attendance at the event was strong evidence that finance professionals are serious about getting to grips with those concerns and seeing if they can mitigate the risks and reap the benefits of the cloud approach.”

“Data integrity simply should not be an issue within private clouds, which provide the cloud benefits of reduced costs and flexible performance, combined with the physical and virtual security standards required by today's enterprise,” commented Ilan Oshri, Warwick Business School and Rotterdam School of Management. “For most businesses, outsourcing their data and IT infrastructure to a trusted partner often makes clear financial sense, but the research indicates that cloud’s benefits are still far from being universally understood.”

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