The Current State of the Cloud

In today’s connected digital world, organizations are using the cloud to assimilate best-in-class technologies that support a range of needs and generate value. Cloud offers organizations ever-greater abilities to integrate data, applications and processes across many environments. This results in more opportunities to benefit from increased agility, flexibility, efficiency, scalability, and resiliency.

Most organizations have adopted the public cloud as a cost-effective platform for hosting enterprise applications and for developing and deploying customer-facing solutions. Over the next five years, cloud platforms and ecosystems will serve as the launchpad for an explosion in the scale and pace of digital innovation. The result will be ‘multiplied innovation’ with as many new applications deployed in the cloud as prior generations deployed over the previous four decades.

– Eileen Smith – International Data Corporation

The Cloud Opportunity

The term “Cloud” is not new. It originated in the ‘60s when cloud symbols were used in flow charts and diagrams to symbolize the Internet network^[1]. The cloud is a shared pool of computing resources: networks, servers, storage, applications and services. Its flexibility allows for a wide range of uses and implementation models.

By carefully balancing the benefits of cloud in capturing content and making it quickly findable and accessible with appropriate safeguards, organizations can use cloud technology to support business processes productively and safely.

While organizational leaders are understandably reticent to leap into new and evolving technologies, cloud tech is becoming essential to operate effectively in the marketplace.

An IDG 2020 Cloud Computing Survey of 550 technology buyers found that 59 percent said they planned to be mostly or all in the cloud within 18 months. Soon, cloud will be the dominant IT platform. ^[2]

"59 percent of technology buyers said they planned to be mostly or all in the cloud within 18 months."

– International Data Corporation

This year, the global public cloud services market is forecast to grow 6.3% to US$257.9 billion, an increase of US$15.2 billion from 2019.^[3] This is up from less than US $9 billion^[4] only a decade ago. Expanding digital transformation, greater penetration of internet and mobile devices, and rising consumption of big data are the primary drivers – accelerated by the COVID-19 pandemic. By 2026 this market is expected to reach US$488.5 billion.^[5]

Last year, the world’s top five cloud vendors realized total revenue of almost US$127 billion.^[6] As new technologies evolve, the field is opening to new players.

Hybrid and Multi-cloud Strategies Dominate

Today, many IT environments are a mix of onsite, public and private clouds. 

Legacy, on-premise systems are characterized by data silos, whereby different departments and units across an organization cannot easily access the data they need. Onsite systems typically lack a consolidated, unified real-time view of business performance, as well as scalability and agility. This creates obstacles to digital transformation. While security is often cited as a concern, cloud security capabilities are now stronger than those of most on-premise systems. Increasingly, outdated legacy systems are often the target of cybercriminals.

Public clouds offer the advantages of significantly lower costs , with shared infrastructure and a highly flexible, pay-per-use model. In particular, large providers have the scale to offer state-of-the-art technology, facilities, safeguards and security that is beyond the ability of most individual companies to maintain. On the downside, they are multi-tenant and diminish an organization’s control. But as large providers improve infrastructure and technology, many of the drawbacks are being addressed.

Private clouds that are accessible to only a single organization are often used where there are concerns related to intellectual property, regulations, compliance and security. They provide greater control than public clouds, but the organizations that own these must manage all of their own security and performance.

Multi-cloud platforms offer numerous advantages: services from multiple providers eliminate single points of failure in business-critical processes, functioning as an insurance policy against disasters and data loss. A multi-cloud platform also allows organizations to closely match specific workload or application requirements. Among 750 global cloud decision-makers and users recently surveyed, 93% say their enterprises have a multi-cloud strategy and 87% have a hybrid cloud strategy.^[7]

Hybrid mix of private and public cloud services, and sometimes traditional onsite infrastructure, is used by many organizations to balance benefits and risks based on economics, location and governance requirements.

As organizations embrace cloud usage, more will rely on cloud service brokers to assist with aggregating, integrating and customizing cloud services among various providers.

The Integral Role of Regulation in Cloud Sector Development

Global Jurisdictions Impacting Information Security in the Cloud

As jurisdictions around the world focus on strengthening local competitiveness while protecting personal information, organizations must have a complete understanding and supervision of their cloud footprint – or risk significant regulatory repercussions.

In 2015, for example, the Digital Privacy Act became law in Canada, amending the federal privacy law, Personal Information and Protection of Electronic Documents Act (PIPEDA), to include mandatory breach notification requirements. In 2018 PIPEDA was amended to include new rules requiring businesses to notify the federal Office of the Privacy Commissioner and any individuals affected by a security breach that gives rise to “real risk of significant harm.” Failure to do so can result in severe fines.

The same year, the European Union’s General Data Protection Regulation came into effect. This increases complexity related to where organizations should transmit and store data because the GDPR has extraterritorial reach applying to companies collecting or using personal information belonging to EU residents, even if processing occurs outside the EU.^[8]

When a cloud provider is a US company, under the Patriot Act, any data it keeps, whether inside or outside US borders, is susceptible to possible US Government search or seizure. This applies, for example to Google and Microsoft. 

More Legislation Focusing on Cloud

There is a flow of new legislation specifically targeting cloud. For example, the Government of Canada is creating a Canadian public sector community cloud (CPSCC) representing a compliance framework for commercially available public cloud offerings. This comprises public cloud services that have security controls accredited by the government and that are made available to all Canadian public sector organizations through a marketplace.

Organizations Devising Standards and Best Practices

A number of international organizations, such as the following, develop and promote governance standards and best practices that are serving as guidelines for cloud transformation.

• Cloud Security Alliance (CSA)
• European Network and Information Security Agency (ENISA)
• ISACA
• National Institute of Standards and Technology (NIST)

Cloud Advantages

With the appropriate due diligence and risk mitigation strategies, leveraging cloud to optimize the use of data can offer both private and public sector organizations unparalleled advantages such as: 

Data visibility and access: Data visibility is essential both for security and for operational performance. Legacy systems and siloed databases across lines of business can make it difficult to see, access and protect data. This can:

• hinder the ability of leadership to access timely, complete data
• deny customers access to real-time, seamless information
• prevent employees from collaborating easily and productively
• restrict rapid response to security threats

The virtual infrastructure of cloud-based services provide greater visibility than most on-premise systems. Moreover, providers are developing increasingly sophisticated tools to enhance visibility – as well as analytics, control and responsiveness.

Cost savings and predictability: When an organization rents hard drive space from a public cloud service provider, costs shift from capital expenditures to operating expenses. Hardware and repair are the responsibility of the service provider. Moreover, IT maintenance costs are reduced, and customers benefit from economies of scale by sharing cloud costs.

Stronger employee performance: Since cloud works across locations, devices and organizational bound­aries, it enhances employee productivity in numerous ways. Provided that applications and data stores are configured for real-time access, workers have immediate access to data and applications, which facilitates work, communication and collaboration.

"A Salesforce report indicated that 94% of businesses reported significant improvements in online security after moving their data to the cloud and 91% indicated that cloud technology supports their government compliance requirements."

(Source: Salesforce)

More green initiatives: Going to the cloud also reduces the footprint of data and information management activities. By retaining and managing less information, organizations reduce infrastructure needs and costs. Those savings can be used to fund green initiatives.

Moving to the Cloud

As the cloud grows and matures, providers will continue to innovate, differentiate and improve their offerings. The impact will be transformative. 

Forward-thinking organizational leaders can now take advantage of new, secure technologies to meet strict compliance standards while providing customers and other stakeholders with fast, convenient, secure access to information.

The only way to fully reap the benefits – agility, savings, efficiency, speed, flexibility, scalability, resiliency – is to move your organization into the cloud.