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The potential storms of cloud computing

The gap in expectations and perception of risk between senior business and IT executives is likely to be a major challenge to the expansion of cloud computing, according to a new report from LSE.

computersWith cloud computing becoming an increasingly important element of the IT function of most organisations, leading academics from The Outsourcing Unit at the London School of Economics and Political Science, undertook research to review the key features of cloud computing and its likely near-term and longer-term development trends. The research was undertaken from late 2010 into 2011 and included a survey of more than 1,035 business and IT executives.

The Unit has now released the second part of the report, which looks at the challenges cloud computing presents for businesses and service providers. These challenges include data security, compliance with regulation, the lack of strong service level agreements, and the potential for businesses to be locked in with service providers.

Notably the report found that senior IT executives weighed the risks of cloud computing quite differently from business executives. While both business and IT executives were worried about data security, the IT staff also expressed particular concern about potential contractual issues with service providers.

The report identifies this ‘Risk Perception gap’ as a challenge in the development of cloud. There is also an 'Expectations Gap'. Business executives are convinced of the potential of cloud and look to in-house IT executives to steer success. But these IT executives see many more barriers to delivery than their business colleagues.

The first and second parts of 'Cloud and the Future of Business: From Costs to Innovation’ are available here: http://outsourcingunit.org/

The third part of the report will be released by the end of June.

15 June 2011