The latest study by sourcing advisory group TPI  reveals that the investment in outsourced IT services is growing. The retail, manufacturing, media and telecoms sectors in Europe, the Middle East and Africa (EMEA) have spent more money on outsourcing during the first nine months of this year than in the whole of 2010.

The manufacturing  sector spent €5.8bn in the first three quarters of this year, compared with €5.6bn in all of 2010. The retail industry’s investment in outsourced IT so far this year reached €1.4bn compared with €0.8bn in 2010. The telecoms sector has spent €4bn so far in 2011 compared with €2.8bn in he full 12 months last year.

Meanwhile, the financial services sector has slowed its spending on outsourced IT services. After the first three quarters of 2011 the sector’s spending accounts for 48% of its total for 2010. Financial sector was not alone in reducing spending. The energy, healthcare and pharmaceutical sectors also experienced falls.

Martyn Hart, chairman of the National Outsourcing Association commented: “Outsourcing in the Emea retail sector has risen 600% on last quarter, and 75% year-on-year. This is due to major retail players seeking competitive advantage by adopting high-tech IT solutions and infrastructure upgrades. They are turning to outsourcing providers as a low-risk route to superior technology.”

Reasons for outsourcing IT services

• Outsourcing reduces capital and operating costs.
• It saves time and provides relief from the administrative tasks involved in employee-related responsibilities. The company can then focus on growth strategies.
• In 95% of cases proactive IT support service is better than having internal IT team
• Even companies which have internal IT provision often need some extra assistance
• Internal IT team may need additional skills or simply more engineering time to implement a new project
• IT requires a vast range of skills and internal IT people may not possess all the necessary skills.
• Outsourcing IT support services means that the company can concentrate on its core business.

Data, communications and information access technologies are changing the UK’s work / life boundaries. A recent survey by the Federation of Small Businesses found that around 40 per cent of SMEs were now home-based. Apart from over 3 million people estimated as regular home-based workers – of whom around 2.5 million work with computers and telecommunications – the shift to adopting a remote workforce model has accelerated with the emergence of highly sophisticated internet resources and mobile worker applications.

The technology platforms and channels of reciprocal connectivity can now deliver ever increasing levels of complex data and media exchange.  Even with the ready availability of a virtual office PC experience with thin client applications such as DesktopLive, an overwhelming majority of company employers have been slow to adapt to the changing landscape.

During the period of extreme UK weather conditions in December 2010, productivity losses due to the failings of the transport system were minimised in many companies who resorted to the provision of their current basic technologies such as laptops, broadband and dial-in meeting facilities to create a link to the office or customers via the internet or teleconference.

Notwithstanding, staff trust and network security issues – as a result of which, nearly one in five employees wanting to work from home are being prevented from doing so by their employer – many companies, also face a considerable challenge when IT managers are tasked with evaluating the correct IT technologies to support which will best equip the company and its remote users for optimal, customised usage.

Inevitably, the most significant and traditional obstacle is the concern over security. Unsurprisingly, as a Cisco Systems report recently revealed, over half of all respondents saw security as the biggest challenge to enable remote working. The preference for a traditional ‘last resort’ method of issuing ‘secured’ laptops with multi layered, network protection safeguards, is not only restrictive to flexible data access and processing but is rapidly becoming an obsolete method in the age of fast mobile access, storage and handling via web based superservers.

It does beg the question of the obvious, alternative application of a simple SaaS ( Software as a Service) or accessing office software as a resource in the Cloud. The emergence of the iPad leading the way for the use of tablets, alongside the mobile, is an example of how access to common user interfaces across a wide range of devices is poised to change the preconceptions of businesses comfortably working with cloud based applications.

In other words, familiarity of logging on to a virtualised work environment through dedicated applications or a web browser, will help ease the shift from running software locally on an individual user’s physical processing unit and importantly, access is securely protected behind a vendor’s firewall. The crossover is beginning to happen and according to research by IT analysts Forrester, three quarters of European and US businesses already proposing to make use of the iPad and to also replace laptops.

It is a process of partial transition to a more cloud based working model, where the necessities of taking a proactive IT approach to a dynamic web environment of fast paced technology changes, can be moderated by an IT support infrastructure guiding the appropriate deployment of expanding business data storage and application software access.

The recent announcement that Citrix – Managed Network’s Silver Solutions partner – are working with Amazon Web Services to optimise XenServer virtualisation and some Windows software for the Amazon cloud represents not only an “extension of their partnership” but also, according to Simon Crosby, Citrix’s chief technology officer for their datacentre and cloud division, a “focus on furthering compatibility with AWS to give customers an enhanced experience when connecting their XenServer-virtualised datacentres.”

As a tangible expression of a proactive IT approach designed to make it easier to migrate workloads between datacentres and the AWS Elastic Compute Cloud, Crosby believes the collaboration “will ensure unparalleled portability, security and manageability of application workloads between private and public clouds”.

Issues of portability, network security and operability, especially concerning moving sensitive data applications to a cloud environment are still a key stumbling block with many businesses who are, nevertheless, becoming increasingly aware of cloud’s potential to gain competitive market advantage and make significant cost savings, especially during a tough economic period.

However, both SMEs and their larger counterparts are making increasing use of a variety of cloud computing applications by replacing their own enterprise resource planning (ERP) and customer relationship management (CRM) applications with basic off-the-shelf versions to deal with human resources and accounting. The movement out of their data centres has also extended into areas such as CRM, email systems and websites.

As a result of a piecemeal approach, IT managers are having to undertake the management of a quasi hybrid cloud environment, which means some data resides on-premises whilst others are in the cloud. It has been anticipated by technology and IT support analysts that hybrid cloud would be a more favoured path for first wave migration, and global brands such as HP have followed the path of Amazon Web Services (AWS) and IBM. Recently, they announced they would be entering the cloud vendor arena via their new HP Enterprise Cloud Services which bundles server, storage, network and security resources for consumption as pure services.

Appealing to many businesses and organisations that fear cloud lock-in, as well as the costs and complexity of following a SaaS or software platform, and coming from a heritage of on-premises platform, hybrid clouds are intended to help organisations make the transition. Hybrid computing is increasingly being seen as key to enabling core competency for enterprises, allowing growth and management of applications regardless of heritage, production model or technology.

As the workforce becomes increasingly mobile and more geographically dispersed, public/hybrid clouds enable IT departments to outsource IT infrastructure (servers, storage and networking) thus, making IT application services more easily accessible over the Internet.

Cloud computing was highlighted at the World Economic Forum 2011, held in Davos, Switzerland, 26 – 30 January, when Neelie Kroes, the European digital agenda commissioner presented a forceful argument for the EU to be ‘cloud-active’.

Focusing on European technology research and innovation, and the alignment of data protection and other legislation development, Kroes emphasised the existence of “manifold” reasons for EU involvement in the cloud.

As 21st century business imperatives are about to become subsumed ever more deeply into mind boggling petabytes of online data and media, storage, access and transference, savvy enterprises have long recognised that a proactive IT infrastructure harnessing cloud based resources to be the inevitable, long term solution.

But as the European digital agenda commissioner implied, data protection and network security is a factor and, has often been a key reason preventing many companies from making that existential leap from the boundaries of physical ownership to the limitless possibilities of a virtual resource.

For a large number of companies, the most fundamental security boundary between their infrastructure and the outside world consists of the perimeter defence provided by firewalls in their demilitarised zone. IaaS, or Infrastructure as a Service, whereby, the client typically pays on a per-use basis for outsourcing IT, moves the fundamental security boundary to the configurations of virtual machines and virtual network paths in the IaaS provider’s data centre. This ultimately means the equipment used to support operations, including storage, hardware, servers and networking components, is owned by the service provider who is responsible for security, running and maintenance.

A 2010 business study conducted by global IT consultants, International Data Corporation (IDC) found, that of the respondents surveyed:

44% saw paying just for what you get as one of the key advantages.
40% said a major advantage of cloud was that it is easy and fast to deploy.
40% considered not needing to buy additional IT infrastructure as a key advantage.

However, on a more typically cautious note :

38% of survey respondents were concerned about the security and compliance of cloud services.
34% were concerned about the location of their corporate data in the cloud.

The coming faster broadband and emergent mCommerce will, undoubtedly, lead more businesses to seriously consider the transition to the cloud. The use of cloud based services to access a dizzying array of online applications has been gaining rapid momentum in the last five years.

Proving extremely popular with IT managers to further enhance operational flexibility and customer service, company owners and their Finance directors naturally welcome the benefits of operating a lower-cost network infrastructure and using data centre resources to transform fixed IT costs into variable operational expenses!

Attitudes towards adopting cloud as a resource service are mellowing, inasmuch as it is recognised that many organisations have been working with cloud applications quite happily for some time. But the issue of multiple remote worker access to replicated PC screen experience and company data storage is not yet resolved although a straightforward solution such as DesktopLive easily provides, is readily available.

The evolution of cloud itself is dynamic and, notwithstanding, the vital necessity of ensuring a secure network infrastructure in place to support cloud integration, businesses should gain greater understanding from their prospective cloud service provider of how the responsibilities of compliance to their security and data protection requirements will be most assuredly met.

Definitely seeing accelerated movement into the Cloud being reported in the news these days! Alongside the likes of Amazon and Sage, for example, Google have not been slow to propel their own engine of change, as it were, with repeated announcements that printing from Google is taking to the Cloud.

This month, CloudPrint has been launched in beta, aimed primarily at mobile documents, which essentially means anywhere or at any time, a document in Google Docs or an email in Gmail can be opened via a mobile browser, ‘Print’ clicked from the drop down menu, and ready to be collected immediately upon arrival.

Driving the realisation that Cloud’s time has come is a combination of converging factors. Faster and wider broadband, cross-platform web technologies enabling multiple access, transfer and storage of unlimited complex data, and the increasing reliance on web channels or virtual platforms as an application resource in order to facilitate a proactive IT requirement.

We have already seen relatively straightforward consumer web based services, from hosted and web email, to online transactions, tax preparation, photo and album creation and today’s linking social networking sites in the continuing development of successful SaaS business applications.

Printing via your mobile represents another tangible example of adaptation to a ‘thin client’ approach to cloud computing, as is readily available via DesktopLive, where a basic monitor screen access to web based software (SaaS) removes the need for physical storage of application drivers and the connecting of hardware to software via a cable.

The end of the physically located desktop has been much talked about in recent times as the smartphone/tablet revolution continues and indeed, the Cloud, as a location-independent communications network is now really becoming better understood across the wider business community. But it’s likely that the static desktop will continue to operate alongside mobile, but increasingly more reliant on cloud based applications as data/media processes accelerate and complexify.

Analysts have predicted that with the arrival of increased high-speed bandwidth, which makes it practical to locate infrastructure remotely, and reacting to the current difficult economic climate, over three quarters of IT managers are said to favour SaaS and will move from a capital expenditure to opt, instead, for outsourcing IT by purchasing 40 per cent of their IT infrastructure as a service.

Gartner forecast that within 2 years, 12 per cent of the global software market will consist of Internet-based forms of SaaS and cloud computing offered by cloud vendors accompanied by intrinsic IT support . In addition, Cloud computing will, by necessity, intensify and enhance frameworks of greater cooperation and collaboration among a geographically-dispersed workforce at multiple locations, including any number of related associates outside a company firewall.

The prevailing consumer adoption of personal forms of cloud computing is inevitably, driving business to migrate to the cloud with adoption rates doubling from 2004 to 2008, with around a fifth of SMEs and a quarter of medium-size companies currently using SaaS.

According to a Gartner 2009 study, “ .. .nearly 90 per cent of organisations surveyed expect to maintain or grow their usage of software as a service (SaaS), citing cost-effectiveness and ease/speed of deployment as primary reasons for adoption.”

News that the well-known Sage business software company has just launched a cloud-based SaaS accounting product for both individuals and small business – as part of an “emerging web strategy” – is yet another significant step in the shift away from software installed on physical computers and the growing acceptance of a cloud-based marketplace.

Secured using 128-bit encryption and available only in the UK, the Software as a Service, entitled ‘SageOne’, offers three different versions, the ‘Cashbook’ basic package and an ‘Accounts’ edition featuring invoice creation tools on a monthly rate and an ‘Accountant’ version, payable per annum or free to existing Sage accountants’ club members.

Over the last fifteen years, the continuous IT services development of cloud computing to industrialise data information storage and access as a resource, as exemplified by a thin client platform, such as DesktopLive, is a result of the ongoing standardisation of core technologies like virtualisation, service-oriented architecture (SOA), and Web 2.0.

Formerly, the underpinning of a business service was limited to IT resources, which were wholly owned by the provider of that service and ultimately, meant a silo-based-approach to the management of system, network security, and IT support. Cloud computing allows the business service architecture to cross the organisational boundary and become a composition of various attributes, which are separately managed within different domains.

The drive by business towards reducing cost and increasing availability, yet exercising agility in the face of unprecedented growth of data generation and processing has been inexorably leading towards recognition of the need to undergo a proactive IT approach to assimilating cloud as a dynamically scalable resource solution.

Yet despite the obvious attractions of the reduced costs of running and maintaining internal IT infrastructure, IT managers have been traditionally reluctant to relinquish control by outsourcing IT and company applications to a cloud service provider. Companies have even been hesitant to push mission critical applications and data, such as ERP and even email to an external enterprise over which they have much less control.

Notwithstanding, the deep anxiety over transitioning production environment, either in part or whole, to the cloud, a fear of becoming too dependent upon even large and stable cloud service providers has often proved to be a far greater barrier to adopting new technologies than technological feasibility.

Migration to a cloud, which is invisible to users, as a reliable and efficient process without sacrificing the governance, management, and security essentials that enterprises have grown to depend upon, must include:

• Capturing both the state and data for applications and servers
• Storage and retention of this information to enable recovery if necessary
• The actual movement of applications and servers, potentially in real time
• Recovery and reconstitution of state and data for applications and servers, to both physical and virtual environments

As the launch of SageOne demonstrates, the growing use of SaaS applications for both strategic and non-strategic business use, such as email, project and portfolio management, etc. provide ample proof of the gradual maturing of attitude towards off-premise data access.

Elastic IT may be broadly seen as the evolution of proactive IT within a Cloud computing infrastructure. The transformation of data management as applications become more dynamic and infrastructure virtualised, means multiple domains of operational control, through a relationship based pay-as-you-go, business service.

However, long abiding issues still focus on network security and compliance, performance and reliability and the concern over relinquishing control of sensitive company IT assets off physical premises. If the end goal is to reduce cost, increase business agility and flexibility, and manage risk, experienced cloud vendor management solutions can provide intrinsic IT support to both a company’s existing IT infrastructure and a cloud computing architecture, as the principles of governance, management, and security become vital imperatives.

Growing understanding of the unprecedented performance and economic power of external clouds is crystallising within IT manager and executive forward planner considerations as they endeavour to address the specific challenges. Constructing a cloud-like architecture – or ‘internal cloud’ – within an organisation’s own data centre can provide equivalent performance and scale of economy within an enterprise’s own operating environment.

This essentially means remodelling existing, diverse data centres to function as an internal cloud, the architecture of which, would not adversely impact existing assets and processes.

It may very well be that the key requirements for deploying an internal cloud architecture could include:

• Managing existing diverse computer, storage, and networking platforms (including
multiple revisions, updates, and patch levels per platform)
• Managing a variety of multiple virtualisation platforms
• Providing service oriented features (design, measure, and maintain a catalogue of services,
chargeback, etc)
• Not disrupting security processes and procedures, existing application architectures, and
existing application code bases or configurations
• Being compatible with existing configuration management processes
• Being compatible with existing tracking, logging, and compliance systems
• Providing per-use resource cost metrics and usage metrics

Under the above types of operating processes, an internal cloud could provide the same “elastic IT” capacity, economies-of-scale, failure-tolerance, and cost transparency comparable to an external cloud. However, a key difference is that the cloud is behind a company firewall, within it’s own facility, and under company management control. An instantly more attractive and persuasive proposition of all is the utilisation of existing resources and IT support for existing applications.

It is envisaged that the growth of multiple internal clouds arising around specific business functions will drive the necessity for a decisive IT services development solution to be managed across the internal domains of control. The adoption of an internal cloud model can be viewed as a company’s necessary first bold step towards intelligent use of an external cloud resource and establishing a hybrid cloud.

The recent news of Oracle preparing to take on Google and Microsoft in a possible, unfolding drama for global brand colonisation and domination of the Cloud provisioning space, may be viewed as another decisive step in the steady ingress of Cloud at the core of strategic, proactive IT development.

There is some evidence to show that senior business executives are increasingly acknowledging the gradual shift in thinking towards infrastructure issues inherent in rapidly expanding and faster handling, storage, access and transfer of increasingly sophisticated info/media data.

The sea change has already been recognised by SMEs and most predominantly, the manufacturing, retail, distribution and transport industries. Significantly, global communications provider, Interactive Intelligence Inc, report that 64 per cent of UK C- Level executives have either actually deployed or are considering the implementation of a Cloud-based solution within the next five years.

The incremental acceptance of cloud as a resource service suggests that last year’s prediction by technology analysts, Gartner that, “ 20 per cent of businesses will own no IT assets by 2012” may not be as far-fetched as some might claim.

Companies considering a move to a cloud platform may well be attracted by its inherent, hybrid characteristics. It’s extremely unlikely that companies will migrate their entire IT infrastructure and applications across to the cloud. However, where organisations already feel comfortable and perfectly used to outsourcing IT for non-core activities with a key benefit of superior IT support whilst maintaining business-sensitive IT applications in-house, a near identical principle of utilising a hybrid cloud approach may be readily accepted and the preferred option.

According to some business analysts, hybrid cloud adoption in the UK is predicted to be the inevitable choice as ‘onDemand’ technology moves forward in the coming decade. The hybrid cloud solution, where both a private and public cloud share IT hosting duties with selected IT outsourced to a non-cloud platform and the remaining staying on-premise and managed internally, will be control-dependent on individual company planning and resources.

For many organisations however, altering their understanding of computing principles by its direction towards the cloud, is still an issue. They will need to come to terms with the opening up of how IT can be delivered and managed, which ultimately provides an infinitely expanded choice of cost-effective service or platform options, which are customised and utilised according to their individual business model and changing resource requirements.

According to Gartner, leading US technology research and advisory consultancy, the global Software as a Service (SaaS) market is believed to have increased by 15.7 per cent from £5 billion to £5.9 billion during the course of 2010.

In addition, it is predicted that the worldwide SaaS revenue market will see a further growth of 16.2 per cent to £6.8 billion in 2011.

The figures suggest a widespread belief that the business world, from SME to larger enterprises, have reduced their early concerns expressed over network security, response time and outsourcing IT service availability issues as they have begun adopting SaaS with business and cloud computing models, like thin client, DesktopLive.

Moving into the second decade of the 21st century, Cloud computing is gravitating inevitably centre stage of a business data and information exchange environment far removed from late 20th century models. Technology has improved out of all recognition, with better connectivity, higher internet speeds and virtualisation technologies enabling more efficient use of servers.

It appears that there is now a real recognition of the growing need for sophisticated management and security, enabling business organisation to change how they think about IT to take advantage of the necessary agility, efficiency and scalability that cloud computing offers.

No longer viewed with the same levels of scepticism and suspicion at the conceptual margins of proactive IT test-development, cloud approaches, such as SaaS, are increasingly within the mainstream in that they are actively deployed to answer many expanding data-critical software needs.

Various different findings show that around 18 per cent of UK companies are now ‘considering’ cloud computing, between 17 – 32 per cent say they are ‘evaluating’ cloud, and 15 – 39 per cent already using cloud to ‘a certain degree’.

In 2011, cloud computing is a reality an IT manager will require to take on board as their role rapidly transforms to working within an IT support supply chain made up of internal and external services. As more businesses begin to focus on a blend of cloud computing investment with legacy hardware, they will naturally move away from inessential in-house IT ownership, adjusting their approach to purchasing cloud capacity suited to their individual business methods.

Inevitably, most studies reveal that just over a quarter of respondents see cost saving as the biggest motivation from the key business benefits identified of migrating to the cloud, with improved business operational efficiency at around 22 per cent.

Traditionally, deterrents to Cloud adoption have been issues of security, reliability scalability and management and internal resistance and, most often, the perception that public clouds are not suitable for some business applications.

The shift toward approaching IT is helping to align IT decision makers to use “cloud thinking,” and by more fully understanding it’s efficiency, flexibility and scalability, will help to accelerate its adoption.

2011 is already being highlighted as the year of the mobile and a dramatic shift towards mobile internet will also drive forward a move towards cloud computing, both of which will ultimately provide companies with the desired competitive edge.

If there’s one concern that has been regularly rearing it’s head over the years whenever Cloud computing is mentioned, it is the protection of sensitive company data physically stored off-premise. The natural anxieties expressed at a time when MS deskbound computing was the predominant operating system and most business data was stored on software physically installed in the CPU under your desk or locked in the room next to the stationery cupboard just sound a little out of step, these days.

As we head into 2011 and deeper into the age of mobile apps, iPad downloads, Near Field Technology, Google Goggles and augmented reality, it’s fairly evident that the concept of accessing a ‘cloud resource’ of stored remote data, as and when required, onDemand, or as a service on a static or more likely, a mobile platform ‘reader’ or indeed, ‘thin client’, is already here in all but name.

The reality is that the various forms of Cloud computing, which we are all used to using in the form of email, VPN, Flickr and Facebook, for example, actually provides SMEs more protection, IT support and potential network security benefits from the cloud vendor than their own, often limited or non-existent in-house resources and budgets.

On a daily basis, the centralisation of company data provides reduced data leakage as a result of lost, corrupted, crashed, faulty or stolen CPUs, laptops, disks, USBs, back up tapes and remote hard drives. As thin client technology, such as DesktopLive, becomes prevalent, small, temporary caches pose less risk than transporting ‘data buckets’ in the form of laptops and USB datasticks.

Centralisation
In addition, central storage is easier to monitor, control and implement disaster recovery prevention contingencies . For example, a Cloud server can be instantly cloned by ‘forensic’ software if compromised, eliminating or reducing any service downtime. Inevitably, increased competition and business consumer demand will mean that Cloud service vendors will constantly strive to optimise performance by developing ever more efficient security software.

Security Testing
Change control builds, pre-strengthened and ‘secure’, are also primarily a proactive IT benefit of virtualisation based Cloud computing. Reduced exposure within production environments through patching offline means it is easier to test impact of security changes by producing a copy of your production environment, implementing a security change and testing the impact at low cost, with minimal startup time.

Economies of Scale
Deployed within a ‘public cloud’ service and thus, sharing the same application as a service, means only paying a percentage of security testing costs of the Software as a Service (SaaS) provider. Similarly with Platform as a Service (PaaS), there are potential cost economies of scale, as with password strength testing times, which are decreased by restricting activities to dedicated non-production machines, preventing the mixing of sensitive credentials with other workloads.