Cloud storage nebulous for Canadian firms

It’s just plain ignorance,” report author Mark Schrutt said. “Users have come back (to IDC) to say between 40 to 45% of the time, they believe there are regulations that inhibit their ability to use the cloud — strictly Infrastructure as a Service. They have concerns that are unfounded, or not based on fact.”

Cloud computing allows businesses to store, access and share data by outsourcing the information to a remote server. Software as a Service (SaaS), in which vendors grant access to already built programs (Gmail, for example), accounts for the bulk of cloud adoption focus among Canadian businesses. IaaS enables businesses to gain access to networked computer hardware, with these machines existing as virtual resources for third-party infrastructure.

The entire IT services market in Canada contributed $20-billion to Canada’s GDP last year, and IDC estimates that the figure will grow to $22.5-billion in 2014. That sum puts the report’s expected figure of cloud services generating $1-billion next year into sharp perspective: Cloud technology does not even account for 5% of IT spending.

David Brassor, the cloud lead of Deloitte Consulting in Canada, said companies should stop focusing on the cost reduction benefits of adopting cloud sourcing, which in some cases may not materialize in the early stages of cloud adoption. Instead, companies should factor in the leaps in productivity improvement and business agility as significant advantages.

“It could take eight to 12 weeks to get a server installed and configured. With some of the cloud solutions, it could take you eight to 12 minutes,” said Mr. Brassor.

The IDC-Telus report found that 66% of Canadian cloud users believe they outperform their peers in revenue growth, and 64% find themselves at a competitive advantage in terms of profitability.

Chris Weitz, Deloitte’s technology expert for Cloud Computing, said he believes Canada’s lagging adoption rate compared to the U.S. comes down to supply and demand — cloud service suppliers are investing in the world’s largest market first.

“The coverage [in the U.S.] is better compared to other markets, with more competition among suppliers, more aggressive pricing, and a more fluid market, therefore, the choices are broader for customers, said Mr. Weitz.

“Enterprises particularly are faced with a lot of good market options, so the prices are going to be more competitive with more attractive offers in the U.S. simply based on the market maturity and the size of the market.”

Adi Kabazo, manager of cloud and hosted services at Telus, cautioned that Canadian companies shouldn’t look to keep up with the Joneses in the U.S., but instead vie with local competitors.