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Clouds in the Forecast

Finance departments will invest heavily in cloud computing and mobile technologies in the coming year.

As to Big Data, two facts will drive it into the disillusionment trough, Gartner reports. For one, tools and techniques likely will be adopted before learned expertise and optimization exists, creating confusion. Also, businesses are still fairly poor at spotting Big Data opportunities.

About 75% of respondents to Gartner polls say they will pursue a private cloud-computing strategy — where a company’s data does not reside on servers that also contain others’ data — for at least some purposes by 2014.

Also by the end of 2014, the adoption rate for cloud office systems, such as Microsoft Office 365 and Google Apps for Business, will accelerate, Gartner expects.

“Adoption of cloud solutions is getting a little easier and, more important, predictable,” says John Lovelock, a Gartner research vice president. For example, mature SaaS applications — those that have been around for several years — are getting more predictable to install and run. By 2015 about 50% of customer relationship management activity will be cloud-based, “and sales-force automation is going to be leading that charge,” says Lovelock.

Problems Ahead
Still, according to a recent KPMG report based on a survey of 674 C-level and IT executives in 16 countries, there is a “growing recognition that cloud adoption is significantly more complex than originally anticipated, particularly in terms of data management, system integration and the management of multiple cloud providers.” But, the survey respondents said, over the next 18 months they expect to spend less time building and defending their business cases for moving more processes to the cloud.

One underreported cloud issue that soon will gain more publicity is loss of control, says Livingstone, noting that cloud vendors are often unable to accommodate the change requests of clients that they’ve engaged. For example, when a company takes on a significant new client or acquisition that shifts the company into a new business sector, the inflexible response of its cloud provider can force the company to run two systems, change cloud providers or make modifications to accommodate the inflexible cloud solution.

13Dec_Outlook_p35Another little-publicized cloud problem that will draw more attention in 2014 is cost. While the cloud is extensively promoted as less costly than traditional software, in some cases the expense of integrating a cloud solution with other company systems may be far higher than that of procuring the service, according to Livingstone.

One of the key challenges in integrating cloud solutions and existing IT systems will be their different architectures for infrastructure, data and applications, he says. Related costs will come not only from the integration process but also from data leakages.

The main cause of problems with cloud implementation will continue to be organizations focusing on the short term, without performing appropriate prepurchase due diligence for the lifespan of the overall system, Livingstone says.

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