Continuing our 2010 theme of speaking with European industry thought leaders for our Experts Corner Q&A series, this week we interviewed Tony Lock, programme director of Freeform Dynamics, to get his thoughts on where the industry is heading, especially regarding the Cloud and IT. At Freeform Dynamics, Tony is responsible for driving coverage in the areas of Systems Infrastructure and Management, IT Service Management, Outsourcing, and emerging hosting models such as Software as a Service and Cloud Computing. Beyond technology, Tony also considers the role of financial models in relation to IT investment. Based in Germany, Tony joined Freeform Dynamics in 2007, and has been an industry analyst since 2000, originally with Bloor Research, then later with Sageza. Before this, he gained extensive experience in the vendor arena working for companies such as Amdahl, and also has a strong IT practitioner background with companies like BP and BT.

i365: Tony, as someone working in Europe, do you see any major differences between the development and adoption of cloud technologies in Europe vs the United States? If so, do you believe that these differences will level as the technologies involved become more universally accepted? If not, what do you attribute the similarities to?

TL: When we survey IT professionals and business users around the world we do find differences between attitudes to using Cloud systems in business life. For example, many European states have significant data protection and privacy laws that make it difficult, and in some instances impossible, to move data out of country or out of the trading block. With many cloud services this can act as a significant brake on adoption. But the term “cloud” is itself now seen to be almost entirely a matter of vendor hype and our surveys show it to be consistently disliked.

But beyond the straightforward, at least theoretically, issues of external legislative constraints on data storage and processing there are many other factors that are holding back wide spread adoption of Cloud, PaaS, IaaS and some SaaS services around the globe, few of which are technical. Some of the most important are related to the long term cost of service, lack of clarity on SLAs, security and data integration with existing systems.

Finally there is the small matter of trust. Who do you trust to be able to deliver your services when you need them, at a price you are willing to pay and on whom you feel certain you can rely not to misuse, misplace or mistakenly reveal your data? And how comfortable would it be to change supplier at some point in the future if needed?

Apart from network bandwidth expense in some geographies, technology is frequently not the major challenge that Cloud services need to address. Getting the term better clarified would help as would suppliers offering better guarantees around location, security, performance / SLA and cost.

Then there is the small matter of contract law and whose will be utilised in cases of dispute. Some US vendors assume that if they have sufficiently clear get out clauses in their terms and conditions there is little a customer can do if the service does not meet their expectations. Alas for the suppliers, in many nations such get out clauses can be deemed to be unenforceable as the states or trading blocs provide certain expectations of service delivery on all suppliers who sell and deliver in their markets irrespective of the T&Cs.

As these matters are far removed from technology, I do not believe that advances in the technologies utilised by cloud systems will level the adoption rates. That comes down to getting services lined up to meet legal and frameworks and customer expectations of QoS. This will take significant effort and the investment of time, resources and money.

i365: Your recent “Inside Track” column, “Can IT Financing and Management Models Survive IT Change?” suggests that as IT technologies become more flexible (Cloud, SaaS, etc), IT budgets need to mirror this in order to most effectively be managed. Since many cloud, SaaS, and virtualized IT technologies are commonly viewed as “new” technologies, do you see this happening in many IT departments? How will slow adoption of these technologies due to inflexible budgeting affect organizational IT and business demands in general?

TL: IT organisations today have to work to fixed budgets. They do not have the luxury of a pay per use funding model by which their customers are charged back for the IT services they deliver. Therefore it follows that today it can be difficult for IT departments to utilise pay per use cloud resources except in exceptional circumstances. This is why most mainstream use of SaaS and other cloud options tends to take the form of fixed annual agreements for certain numbers of users. As this column points out I believe that IT budget models will have to change if IT is to work effectively in its ability to support flexible business requirements in the coming years. This change will not be driven by cloud alone but by a raft of more general IT funding challenges.

i365: More generally, where do you see IT in two to five years? Are there any technologies currently breaking through or on the horizon that you and your team at Freeform Dynamics believe have the potential to really take off and become IT institutions within that time frame?

TL: If I could read the future that clearly then I would probably not be here. We do expect things to get a lot more complex in the coming years and this will mean that management and automation tools will be far more important going forward, a trend that is already becoming visible today.

I see several new, or not so new, technologies becoming embedded into operational platforms by default. For example, I believe that encryption will become reasonably pervasive as concerns around security of information continues to rise and as the systems become able to make it work without disruption to the experience of users. But this in turn will throw the focus onto managing the keys required to make everything work. Everything really does come down to management.