cloud computing oslo presentation - kpmg

KPMG’s 2010 Cloud Computing SurveyThe findings at a glance – June 2010 Oslo

drs. Mike Chung RE

Risk & Compliance

ADVISORY

2© 2010 KPMG ELLP, the member firm of KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG

International, a Swiss cooperative.

Cloud computing: serious offering or hype?

• According to vendors:– Cloud computing will ease implementation, lower costs, improve scalability, enhance

accessibility and reduce complexity– All segments of IT can be safely moved to the cloud

• According to IT analysts:– Undoubtly, cloud computing is the IT model of choice for 2010 and beyond– Cloud computing will end the era of client-server architecture, hence changing the

entire IT landscape• Main questions amongst CEOs and CIOs:

– What is cloud computing really?– What are the benefits of moving to the cloud?– What risks are associated with cloud computing?



What is cloud computing?

• Cloud computing is putting your data on someone else’s hard disk and accessing it via a network.. – Public cloud: ..with a lot of other people too– Private/dedicated cloud: ..alone– Hybrid cloud: ..mix of the above

IaaS

PaaS

SaaS



View on the cloud: cloud computing is moving from hype to future

• Cloud computing is the future model of IT according to the vast majority of decision-makers

• Very few regard cloud computing as a hype that will subside• One out of two organizations have already included cloud computing services into

their IT strategy

“I don’t believe cloud computing is a hype. Contrary to other IT ‘miracles’ with a lot of technical mumbo-jumbo, even I understand cloud computing. Go to the internet and get the service you need. I really like this simplicity.” Business director of a telecom organization



What does cloud computing primarily mean for your organization?

16%

33%34%

5%

2%

10%

An interesting technical offeringAn interesting business offeringA type of outsourcing of ITA hype that will subsideCloud computing is an unknown or unclear subjectOther



Statement: Cloud computing is the future model of IT

012

29

41

18

Strongly disagreeDisagreeUndecidedAgreeStrongly agree



Current state of cloud computing: to implementation and beyond

• Almost 60 percent of decision-makers indicate that they are currently using, or will be using cloud computing in the short term

• The most commonly used services that are provided via the cloud are data storage, application hosting and e-mail

• Many companies are considering to adopt cloud services for desktop solutions, CRM and business specific applications

• Government organizations and financial institutions are relatively reluctant to use cloud computing services when compared with other sectors in the market

“When we realized that we were using Gmail and Facebook already, the step to implement cloud computing in our corporate environment wasn’t a big one.” CIO of a firm in the industrial markets sector



Is your organization willing to use/adopt cloud computing for (parts of) your IT?

45

13

19

15

8

We are already using cloud computing

We expect to adopt cloud computing within theupcoming 12 months

On the long term (>12 months) we see cloudcomputing as a viable option

Perhaps, at this moment there is insufficientknowledge within our organization to judge on cloudcomputingWe have no intention to adopt cloud computing



What cloud computing services are you already using or implementing?

0

5

10

15

20

25

30

35

40

45

Data st

orage

Server c

apacit

yApp

licatio

n hos

ting

Applica

tion d

evelo

pment

E-mail

and m

essa

gingDesk

top/O

ffice s

oftware

CRMFina

nce & ERP

CMS/DMS BI

BPM/ESBBusin

ess s

pecif

ic



Drivers: driven by cost savings and more flexibility

• Main drivers to adopt cloud computing are cost savings, improved flexibility and better scalability

• Especially large organizations with more than 5.000 computer users quote improved flexibility as an important reason to move to the cloud

“The problem with IT ‘solutions’ is that they all require enormous investments in hardware, software and human resources. And too many ROI calculations turn out to be completely bogus. If I can have a solution with no upfront costs, I’m in.” CEO of a firm in the professional services sector



What benefits do you expect from cloud computing?

0 10 20 30 40 50 60 70 80 90

More flexibility

Cost savings

Better scalability

Complexity reduction

More (core) business focus

Collaboration

Switch from CapEx to OpEx

Green IT

Advanced technology

Better functionality

Improved security



Obstacles: security as the main concern

• Almost two-third of the respondents consider security a blocking factor for cloud computing

• Other major concerns are issues regarding compliance, privacy and legal

“Cloud computing vendors told me that my data at their locations was as safe as my money in the bank. Since the credit crunch we all know how reliable the banks are.” CISO of a firm in the public services sector



What are your main concerns regarding the use of cloud computing?

0 10 20 30 40 50 60 70 80

Security issues

Legal issues

Compliance issues

Privacy issues

Integration issues

Insecure availability

Vendor lock-in

Insufficient financial benefits

Lack of performance

Lack of functionalities

Immature technology



What type of knowledge/expertise is lacking/insufficient within your organization regarding cloud computing?

0 10 20 30 40 50 60

Security

Legal

Technology and implementation

Cloud computing market

Compliance

Other



Security issues of cloud computing are real

• Hackers stole credentials of Salesforce.com’s customers via phishing attacks (2007)

• Thousands of customers lost their data in the cloud due to the ‘Sidekick disaster’of Microsoft/T-Mobile (2009)

• Botnet incident at Amazon EC2 infected customer’s computers and compromised their privacy (2009)

• Security flaws in GoogleDocs gave erroneous permissions to its users (2009)• Thousands of hotmail accounts were hacked due to technical flaws in Microsoft’s

software (2010)• Botnets are increasingly threatening access to internet services• SPAM, excessive traffic of multimedia sites and P2P networks are clogging the

internet’s arteries



Security risks: specific factors concerning the cloud

• External data storage• Multi-tenancy • Use of the (public) internet• Integration with the internal IT



Specific factor concerning the cloud: external data storage

• Weak control of data (failing backup, recovery, destruction)• Legal complications (privacy violation, conflicting/contradicting and often

unworkable/archaic legislations)• Uncertain viability (insufficient guarantees regarding continuity and availability of

services) • Single point of failure (failure of one cloud vendor/provider means disaster for

many customers)• Vendor lock-in (difficulty in getting back the data in open formats and switching to

other vendors)



Specific factor concerning the cloud: multi-tenancy

• Inadequate segregation of data between different customers (data contamination)• Inadequate Identity & Access Management (erroneous authentication, access and

authorization to IT resources and data)• Insufficient logging & monitoring• The weakest link is decisive (virtualization, shared databases)



Specific factor concerning the cloud: use of the (public) internet

• Unclear and unaddressed accountability, ownership• Unclear demarcation of responsibilities and control• Limited regulation• A lot of clandestine traffic (Spam) and networks (Botnets)• Exceptionally poorly protected for such an important infrastructure – the internet

is commercially the most valuable infrastructure• Extremely dependent on couple of optic fibers and electricity• Threats are virtually unknown to most politicians and decision-makers



Specific factor concerning the cloud: integration with the internal IT environment

• Unclear (network) perimeters• Difficulties/discrepancies in matching cloud computing vendor’s security

measures with internal security measures, requirements and baselines • Complexity of integration between the cloud and the internal IT



Security benefits

• Centralized security Concentration of security expertise Economy-of-scale

• High accessibility• ‘Nakedness leads to fitness’



Learning from early adopters: room for improvement, but no turning back

• Half of the participants indicate that the expected benefits are achieved within the executed projects. This is far above the success rate of ‘on-premise’ IT implementation projects

• Most early adopters of cloud computing are experiencing cost savings, improved flexibility, better scalability as well as more business focus and reduced IT complexity

• Organizations that are successfully using cloud computing are still worried about security and privacy as vendors provide marginal assurance

• After implementation, it is indicated that integration with existing IT should be improved as well as better transparency regarding architecture and calculation of the costs

“We used to think that seemingly everlasting IT projects with uncontrollable expenditures were the norm. When we decided to use CRM from the cloud, it took us less than 3 months with minimal costs to have it up and running. No, we won’t go back.” Business director of a firm in the Industrial markets sector



Conclusion

• Cloud computing is emerging and shows no signs of stopping• Many organizations are already using cloud computing• Improved flexibility, better scalability of IT resources as well as cost savings are

being realized by moving to the cloud• Security is the main concern and obstacle to the cloud



Survey method

• Method– Online questionnaire– On-site interviews– From March 2010 – May 2010

• Participants– 125 participants from over 110 organizations located in the Netherlands– Almost all participants are decision-makers within their organizations

• Sectors– Professional services (27 percent)– Financial services (24 percent)– Public sector and Healthcare (21 percent)– Industrial markets and Manufacturing (10 percent)– Other (19 percent)



Contact

Drs. Mike Chung REManagerKPMG Advisory N.V.E-mail: [email protected]: +31 (0)6 1455 9916

Please contact Mike per e-mail for a copy of the survey

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