More and more companies are migrating their IT to the cloud – preferably to a hybrid cloud. Essentials for most businesses: strong security and data privacy.
In their pursuit of maximum efficiency, SMEs and major corporations alike want to make their IT infrastructure as lean, cost-effective and agile as possible. This makes cloud offerings an alluring prospect. That's one side of the coin. On the flip side, however, there are still reservations against outsourcing this sensitive business area – due to security concerns, fear of compliance difficulties or a simple lack of expertise.
Yet the skepticism is evaporating. Current figures confirm that many companies are swapping their internal server rooms with an externally operated data cloud or combining their own private clouds with the useful public cloud, creating hybrid IT landscapes. According to EuroCloud, a pan-European cloud innovation hub, 80 percent of all data centers are expected to process cloud data by 2019. Data traffic between data centers could increase tenfold by then, to more than 40 zettabytes – that's 40 followed by 21 zeros – of monthly data volume expected.
Cloud computing is becoming the standard
According to the Cloud Monitor by Bitkom, the German IT industry associations, 2015 marked the point where a majority of businesses in Germany were using cloud computing – 54 percent, in fact. Overall, cloud use among German companies has nearly doubled in the past four years. Among larger companies with more than 2,000 employees, 70 percent now use cloud computing capacity. The most popular applications are office suites, groupware, collaboration services and security solutions. Despite this upward trend, according to a study by KMU Barometer 2016, German SMEs rank at the bottom in cloud use in an international comparison. Spain and the Netherlands have the lead here. Companies primarily use private clouds to date, because they believe the public Internet is too insecure. But that is now changing.
Analysts from Crisp Research predict that hybrid clouds – a mix of private and public cloud – will comprise 30 percent of all cloud computing models in the future. The use of multi-clouds, which entail managing a variety of different cloud environments with at least one public cloud, is expected to rise from a current tento over 30 percent. The main reason for the popularity of these cloud models is the costs. Strictly private clouds and internal data centers are more expensive than comparable capacities from the public cloud. Another driving factor is the customer, who is increasingly demanding live solutions – from app-based parcel tracking to heavy-duty number-crunching simulations – that can be ideally served from a public cloud.
The cloud market is changing rapidly. IT providers are moving closer to their customers, and customers are effectively becoming partners, co-developing solutions for the outside market. They are opening up to the cloud, and their use cases are getting increasingly more creative in the age of the Internet of Things (IoT): from data gloves that can be used to quickly scan product and process information, up to smart parking spaces that notify a cloud platform that they're available and can be reserved by users with an app. Ultimately, the Internet of Things is making cloud computing inevitable.
The question of data security remains
The current debate on the defunct Safe Harbor agreement and its successor, the Privacy Shield, unnerves European companies. The Freiburg-based Center for European Policy (CEP) recently criticized that the Privacy Shield agreement is insufficient: “The 'Safe Harbor' follow-on agreement with the European Commission cannot prevent mass data collection and use by U.S. authorities”, the organization concluded in a statement. The European privacy specialists in the group just recently gave their conditional approval to “Article 29”.
The greatest concern for cloud skeptics is sensitive company data. Their nightmare: unauthorized external access or even loss of data. Yet in theory, cloud computing is more secure: Companies with managed systems from the cloud have providers who monitor operations around the clock. In comparison: The company's own IT staff, who do not check the systems at night, will not notice potential mishaps until the next day. In addition to that, the cost savings that result from not having to invest in internal hardware or support for internal systems are a huge benefit.
Hosted in Germany is in demand
At the same time, there are also positive trends, as evidenced by the recent Microsoft decision: in July 2016, an American appeals court ruled in favor of the software giant. Microsoft had refused to surrender customer data that was stored on European servers to American authorities – an important legal precedent for the industry that will make it more difficult in future for U.S. agencies to access data held abroad. Other U.S. heavyweights such as Google and Facebook, whose business models are based on their users' data, also oppose U.S. government attempts to access this information.
To avoid legal uncertainties in the long term, data centers in Germany are especially popular, particularly among German businesses. After all, customer data stored here is protected against access by foreign authorities. According to a Bitkom survey, two-thirds of companies believe it is vital for their data centers to be located in Germany. Only one percent sees the matter as completely unimportant.
Because more and more companies are relying on the cloud, we will be dedicating a multi-part series of articles on t-systems.com to it, exploring a variety of facets and exciting use cases for cloud computing in the coming months. I hope you enjoy reading them.