Posted by: Phil Clark Posted date: 14 December 2016

Cloud benefits are not just for christmas

cloud industry forum

I recently attended our first meeting of the Cloud Industry Forum (CIF), an industry body established to drive best practice for cloud adoption and offer a forum for discussion around cloud service provision.  A UK entity, it has interesting insights into the future of IT Services, with a bias towards cloud services, attended by a real mix of entities from vendors and channel partners, to advisory bodies such as accounting and legal firms.

The interesting takeaway from such an industry forum is the breadth of impact cloud services have.  As a self-observant industry, generally debating the technical implications of new innovations or technology developments, we nearly always forget the broader impacts of such technologies on departments beyond IT.  Clearly we pay a polite nod to the rest of the business functions, but these are often outweighed by the benefits to the IT team. 

The content of the forum however dramatically changed my perception.  The engagement of IT leaders in the adoption of our cloud solutions is clearly still very important, but the financial and legal impacts are something that should not be overlooked.  We have beautifully formed and perfectly functional technology, but have we really considered the best way to price our services or comply with legislation in this context?  Maybe not.

The financial side of things is by far the most interesting area for me.  We had a long debate with a major accounting firm about the methods of capitalising cloud projects. The benefits of cloud to IT costs,  moving costs from capital to operational expenditure, are clear and valid.  However, many industries would rather take a capital cost than an operating cost, and even though a lot of cloud revenues are by definition “ongoing”, the accounting treatment of cloud projects can massively benefit the business case for cloud adoption.  Clearly we are not armed to provide accounting advisory services to our clients as part of our sales campaigns, but being aware that there are options to move costs around in the context of a client’s specific financial objectives could make or break the sign-off of a project.

The legal side of things has been rumbling for a while, but is shaping up to be more critical than ever.  Most of my colleagues and clients are aware of GDPR and its impacts on data privacy, consent and liabilities for service providers, however methods of enforcing compliance and establishing appropriate dialogue with service providers appears to be a bit of an evolving minefield.  EU Data Privacy regulation and GDPR, if I followed the dialogue, not only has an impact on the relationships between clients and service providers, but can also have interesting implications for in-house IT departments and passing the liabilities between in-house and outsourced providers. This is going to be fascinating.  Also, timelines in some cases are likely to have passed; even though GDPR is predicted to be a May 2018 piece of legislation, many people are in services contracts that go past this date, begging the question on how to negotiate a beneficial position for clients in sharing the responsibility of GDPR liabilities.

CIF is a fantastic concept and is probably the leading industry advisory body in the UK on cloud services.  We are already seeing a benefit of being a part of its movement, and as it evolves to influence and inform some of the less technology specific parts of our world we are in a great position to advise our clients on a broader basis.  Next meeting is in a few months and I’m already trying to work out what non-technical questions to ask.

Phil Clark