Cloud computing on the rise despite security concerns

‘Like online banking, once you’re used to it, you want to use as much data
storage online as possible,’ so says Vipul Shah, a partner with accountancy firm
Carter Backer Winter, on the subject of cloud computing.

Nothing unusual in that but he was responding to research out last week
offering a serious warning about security when dumping data in these web-based

Cloud computing has attracted much attention in recent months, but the
research from
concluded that companies looking to use online data storage should undertake
very careful security due diligence before taking the plunge.

Shah adds: ‘The concern for people is that they are used to having a computer
with data on that computer, this is a different step forward. It’s opened up new
doors for accountants.’

The Forrester report ‘How secure is your cloud?’ underlines the stigma
attached to entrusting a third party with sensitive financial data but Shah,
whose firm has over 2,000 clients, adopted cloud computing two months ago and
believes it is a vital adjustment.

Stefan Reid, an analyst at Forrester, disagrees and is still uncertain
whether there will be a wholesale move of confidential data, such as financials,
to cloud centres.

He says: ‘Companies like car manufacturers would generally keep financial
information in-house and move supply chain or classifying data and business
processes, into cloud.’

But David Turner, marketing director of Coda, which provides access for
clients to Salesforce data centres, says they are protected like military bases
with many needing retina, and fingerprint scans just to enter.
‘Security is at the core of Salesforce, their reputation depends on it and it
would kill them overnight if there was any data loss, so their security is world
class,’ he says.

Forrester highlights a high-profile case between civil liberties lobbyists
the Electronic Privacy Information Centre and cloud provider Google Docs, which
was taken to the US Federal Trade Commission when users inadvertently shared
their documents with a wider audience due to security flaws.

Duane Jackson, the CEO of online accountancy software provider KashFlow
dismisses the risk of security problems.

He says: ‘They feel uncomfortable about the data being in the cloud.
Customers will accept it is more secure but are uncomfortable with it being out

Reid points out that cloud computing is an emerging market and at present
there is no regulation governing best practice or codes of conduct for cloud

‘There are not enough standards on cloud computing or a manifesto to align
the industry,’ he says.

Despite these concerns, Forrester expects that revenues from cloud-based
software will increase to 20% of global software revenue in 2-3 years and that
50% of vendors will offer online technology in eight years. A clear indication
of the future.

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