Legislation and regulation hold back cloud in the UK

Issues around data protection, legislation and regulation are cited in a new report as being the prime reasons for the slow adoption rates of cloud computing in the UK.

The report, commissioned by NTT Com Security, which was formerly known as Integralis, shows that just over a quarter of the decision makers in UK organisations that were surveyedsay these issues have been the ‘primary reason’ for slow adoption. Another 31 percent admit they have ‘significantly’ slowed adoption and 29 percent say they have affected it ‘to some extent’. That is a total of 86 percent in the UK, which compares unfavourably against a global average of 76 percent across all of the other countries surveyed. 

These results would seem to suggest, as has happened before with new developments in technology, that legislation and systems of control are once again not keeping pace with what is happening in the real world. They do seem to indicate that there is a growing need to rethink legislative frameworks on issues such as data sovereignty, protection and management.

At a global market sector level, Financial Services (36 percent), Petrochemicals (39 percent) and Healthcare (27 percent) organisations are most affected by legislation and regulation issues, citing them as the primary reason for slow cloud take-up.

The research, which covered 700 organisations in the UK, USA/Canada, Germany, Nordics, Singapore, Japan and Hong Kong, shows that while 36 percent of UK companies have adopted cloud in the last one to two years,22 percent have yet to adopt it. This, again, compares unfavourably with the rest of the world, where the average of non-adopters is 14 percent.  

Although just 10 percent of UK respondents have already moved the majority of data and services into the cloud, 42 percent expect to transition it in the next two years, with a further 18 percent making the transition beyond this period.  Yet, 30 percent remain adamant that they will never move their data, a figure only topped by the Nordics with 42 percent.

Despite these concerns, when asked which infrastructure they would choose to deliver secure services to the business, 42 percent of UK respondents still opted for some form of cloud, with 22 percent selecting private, 19 percent hybrid and 1 percent public cloud. However, when questioned about regulatory issues, 48 percent would choose a corporately-owned datacentre and 20 percent a third-party hosted datacentre as the best means of delivery to adhere to new regulations, with less than a third opting for a cloud model.

This last statistic arguably also highlights how the issue of confusion over what is and is not `cloud’ comes into play. For example, a `third-party hosted datacentre’ will be considered a cloud service to many people, even if it is a co-location service. It may even be just a facilities management shop but, but if communication is via the internet rather than a dedicated leased line it could still be argued to be `cloud’.

Garry Sidaway, Global Director of Security Strategy at NTT Com Security, says: “The report suggests that UK organisations could be falling slightly behind others when it comes to integrating cloud as part of their infrastructure, or moving data and services into the cloud – and it seems the growing challenges of legislation, regulation and compliance are playing their part in this.  With increasingly complex data laws here, it’s becoming something of a minefield for businesses looking to become more agile, efficient and competitive using cloud, and perhaps feeling they are being held back.” 

Organisations in the USA/Canada are the most cloud enthusiastic, with 28 percent saying they have already moved the majority of their data and services into the cloud, followed by Germany (24 percent).

When it comes to innovation, USA/Canada also stands out, with 59 percent actively seeking out and experimenting with new and emerging technologies, followed by Singapore (41 percent), Japan (26 percent), Germany (21 percent) and the UK (20 percent).

Cloud adoption has increased in the last two years, with 36 percent of UK companies indicating deployment within that timeframe, followed by Germany (34 percent), the USA/Canada and Singapore (31 percent each), Japan (25 percent), and Hong Kong and the Nordics (18 percent each).

While on average only 22 percent of IT budget is dedicated to cloud, versus a global average of 29 percent, UK businesses are still enjoying the financial benefits – 40 percent acknowledge an increase in revenue and 23 percent an increase in profits from cloud computing. 

Over 40 percent of USA/Canada respondents say cloud is ‘critical’ to how they deploy and maintain services, compared to 32 percent in Singapore, 29 percent in Germany and 9 percent in the UK.

Singapore (45 percent) places most emphasis on ‘cost’ as a factor when considering deploying a new service or changing the delivery of an existing service.  Hong Kong, however, places most emphasis on ‘security’ (38 percent), followed by the Nordics (36 percent) and UK (33 percent).