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The cloud: Coming of age

23 June 2010

In August 2008 we predicted that the economic climate may lead to more businesses putting their heads in the 'cloud'.

The International Data Corporation now estimates that ‘cloud’ computer services could add $800 billion in net new business revenues to the economies of 52 countries between the end of 2009 and the end of 2013.

The European Commissioner has described cloud computing as ‘the medicine needed for our credit squeezed economy’. So has the industry now begun to mature?

In its simplest form, cloud computing refers to the delivery of services across the internet. For example, instead of your word processor being installed from CD-rom or internet download, a cloud service might enable you to load the application onto your web browser and save your document on a third party’s server ready for you to recall it next time you log onto the internet.

The model is widely regarded as a cost effective alternative to running and maintaining expensive hardware which is both underutilised and complicated to manage. However, it will not necessarily be appropriate in all circumstances, and whether it is a viable option for a business will depend on how it is used and how any risks can be mitigated.

In order to attract customers away from traditional solutions, and in order to differentiate themselves from competitors in what is a rapidly growing market, cloud service providers have had to evolve.

Demand has also led to new services designed specifically to address the concerns that customers had about using the cloud. This has led to a number of key developments and offerings including:

These developments have gone a long way to making the cloud more accessible to businesses, but the flexibility of providers is about to be tested even further.

The UK government has recently given cloud computing a major role in its new ICT strategy, and it believes that the G-Cloud will save it more than £1bn.

A lot of sensitive data may not be suitable for the cloud at this stage, but nonetheless it is anticipated that the varying demands of the public sector will lead to the development of new initiatives and solutions which will flow through to the wider market.

Advancements made to accommodate the Government will thereby make the model increasingly attractive to private enterprise.

In the UK, it will be the Government’s investment in cloud computing which allows it to come of age and become a viable option for those who are yet to be convinced.

Shoosmiths has advised service providers and customers on the risks associated with cloud computing, and is well placed to support you when you feel the time is right to start doing business in the cloud.

© Shoosmiths. This page is for general information: it is not legal advice. Please read our full terms and conditions for details of the disclaimers and exclusions which apply.

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Michelle Sherwood

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