Silos in the cloud
Jinfo Blog

By Tim Buckley Owen

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Information professionals have been considering the cloud’s opportunities and threats for several years now. But a new report from the global accountancy firm KPMG offers useful insights into what decision makers currently make of it.

Over 80% of the businesses KPMG surveyed are either planning or making early forays into the cloud, says Clarity in the Cloud (available through Forbes Insights). But their approach is measured, focusing for example on self-contained functions that don’t require integration with core applications, and using private clouds rather than public or hybrid ones.

Chief executives and chief information officers each think that the cloud should be their responsibility, the report also finds. Enter, therefore, the chief integration officer – a go-between dedicated to breaking down silos – and a host of big picture issues that would-be integration officers might want to consider.

KPMG’s report refers to infrastructure, platform, software and business processes “as a service” – to which the technology analyst Gartner adds “recovery as a service”. It predicts that a third of mid-sized companies will be using it within a couple of years and achieving significant reductions in their disaster recovery budgets – but Gartner nevertheless warns that hailing it as a “killer app” is largely hype.

With their heavy regulation and security concerns, banks might not seem like natural early cloud adopters – yet one senior banking official told KPMG that he didn’t see security as an issue provided banks stayed within the private cloud, and didn’t think regulators would either. Again Gartner concurs, finding that cloud is the top priority for chief information officers in financial services, many of whom are ready to move on from non-core areas and proofs of concept to mainstream business applications.

Finally, KPMG asked respondents in the United States only for their views on the tax aspects of the cloud – issues like migrating from capital to operating expenditure, or the impact of using third parties instead of internal employees. To its surprise, almost half didn’t seem to have thought about it, even though they would need to reduce their tax exposure, and might even unlock significant value for the organisation.

Not to mention providers of cloud services acting as tax collectors when it isn’t always necessarily clear which tax jurisdiction they’re operating in. Veteran cloud service provider Amazon, for example, has just come out in support of the United States Federal Online Sales Tax Bill, which if enacted would require out-of-state retailers to collect the tax on customers’ behalf and send it to the state concerned.

Chief integration officer is a role to which many senior knowledge and information managers might perhaps aspire. If so, the issues raised by KPMG and others are ones on which they might care to chew.

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