IT Seeks a Safe Road to the Cloud

CIOs describe starter cloud efforts that are designed to minimize security and legal risks

The road map for expanding enterprise use of cloud computing is being drawn by IT executives like Mark Stone, CIO at Safety-Kleen Systems Inc.

Safety-Kleen, an environmental services company with about 4,200 employees, has turned to cloud technology to run 15% of its applications, mostly for functions like CRM and travel management, Stone said. About 35% of the company's application portfolio, including its general ledger systems, could be hosted externally within three years, he added.

"I can go to a variety of [software-as-a-service] providers and put in software that's every bit as functionally rich as anything I've developed on-site," without having to worry about the upkeep of an IT infrastructure, Stone said at Computerworld's Storage Networking World conference earlier this month in Grapevine, Texas.

Cloud-based services are proving to be increasingly viable options, according to several IT executives. Research firm IDC pegs the cloud market at $23 billion today and projects it will grow to about $55 billion in 2014.

But obstacles remain. Experts note that many IT executives are still concerned about cloud-related security and legal issues. A number of CIOs said their companies are launching small cloud projects designed minimize those potential problems.

For example, security concerns are stopping RAE Systems Inc. from moving core ERP software to hosted setups, but the maker of multisensor chemical and radiation detectors is using Informatica Corp.'s cloud-based data-integration service to combine an Oracle ERP system with CRM software.

CIO Lien Chen said the alternatives to hosted integration -- packaged Oracle integration software or on-premises appliances, plus consulting services for each -- would have cost much more. Robert Scott, managing partner at Scott & Scott LLP, a law firm that advises clients on IT contractual issues, says he routinely sees conflicting forces at work among users considering a move to the cloud. "There is this great pull toward cloud and SaaS offerings," he said, but added that there's also "a lot of anxiety."

Managing risk isn't a new discipline for Tom Honan, senior vice president and CIO at CapitalSource Bank, where the cloud is seen as a viable alternative to in-house systems.

Honan said that about 15% of the bank's application portfolio is now in the cloud, and he continually explores the viability of cloud-based platform and infrastructure services.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is

Copyright © 2010 IDG Communications, Inc.

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