Industry news

Cloud Compliance Meeting

12th July

Cloud services and platforms have been employed within business for some time, particularly within the outsourcing sector. With many companies feeling the pinch of the economic downturn, the cloud is becoming increasingly attractive for businesses looking for cost-savings.

This seminar continued on from a series of NOA cloud focused seminars which seek to identify best practices and address concerns and questions regarding the technology. This cloud special interest seminar was chaired by Andy Rogers, NOA Board Member, and Natalie Donovan, IT professional support lawyer at Slaughter and May, and focused on the importance of compliance in cloud contracts.

The Cloud Compliance Meeting began with a detailing of the expansion of cloud services within the business market by Dr Bharat Vagadia, NOA Board Director. The prominence of cloud services in big business has been apparent over the last couple of years, however the deployment of the cloud is now being seen in other areas. A recent Microsoft survey, (SME Cloud Adoption Study 2011) of 3000 SMEs in 16 countries showed that nearly 40 percent of SME’s are now buying cloud services. This is an increase of a third from 2010, while a 2012 IBM study recorded that two thirds of businesses have or intend to implement cloud services.

The IBM study highlighted the need for agility in cloud deployment and predicted that in three years, 1 trillion cloud-ready devices would exist, allowing for increased mobility.

The Microsoft SME survey predicted that cloud adoption by SMEs will nearly double over the next three years. The survey also identified that the larger the business, the more likely it was to adopt cloud services.

The meeting looked at recent developments in cloud technology including an increased focus on scalability, which goes against the past trend of providers offering one-size-fits all approach to delivering cloud service packages.

The survey also looked at the practical concerns surrounding the cloud and the additional infrastructure that is required. 82 percent of surveyed cloud users said that it would be ‘critical’ to have local support cloud services.

The meeting covered the main reasons for cloud adoption with cost and flexibility ranking as the most prevalent reasons for employing cloud services. Standardisation of service was also identified as a key caveat in attracting SMEs to employing cloud services despite the growing demand for scalability within the service.

The meeting addressed key concerns, including the scale of impact disruption of internet services could have on the use of cloud and how precautions and safeguards could be established to diminish such risk. Future trends were also addressed by the special interest group and identified mobile applications and simplification of software as key areas of development for cloud services.

Natalie Donovan, Slaughter and May, detailed the risks associated with cloud services. Natalie described how cloud services and platforms represent a relatively new market, and as such new models exist, in regard to creating standardised contracts. Natalie described how: “At this stage early procurement is far away from being fully optimised.” Most current contracts are first generation. The relative immaturity of the cloud market is reflected in the basic nature of the current common contracts that are being employed. The attractions for using basic contracts were explained, with the ability to implement a speedy procurement ranking highly.

The meeting identified that a new legal approach was needed when looking at cloud compliance. In her presentation Natalie demonstrated the need to focus on the key issues while employing the correct contract base. A new legal contract approach should be carried out alongside a new procurement approach which should provide tending based on user reviews.

Quality of service, changes of service and security remain the major issues in employing cloud services and in standardising cloud contracts.

The meeting covered the termination of cloud services and the best practice in regard to exit strategies. Natalie spoke on the importance of exit assistance and the need for suspension and termination clauses built into the contract.

Data regulation was also identified as an area of importance with the need to understand the laws surrounding data privacy in cloud services. A new cloud approach should be undertaken which focuses on securing the key issues, such as security while trying to avoid the undermining of commercial benefits, such as agility.

At this early stage in cloud service employment, uses are wary of uploading data to the platform because of the perceived security risks involved.

While risk was identified as not being inherently negative, efforts should be made to find the right level of risk based on the circumstances.

The meeting closed with a roundtable discussion on who has the most insight into IT services, whether SMEs or big businesses. The meeting identified that SMEs and big businesses have different requirements in regard to cloud services, and that the SME cloud market is rapidly opening up to the employment of cloud technology, however contracts, understanding of the service and compliance still need to develop.

Please visit www.NOA.co.uk for the full set of slides from this event.

Professional Outsourcing magazine has been appointed to the advisory board of the new Centre for Global Sourcing and Services at Loughborough University School of Business and Economics, and has also been chosen as media partner for the new centre.

The centre, led by Professor Ilan Oshri, will carry out independent research into key trends across areas such as captive shared services, outsourcing, offshoring and back-sourcing, with the aim of improving sourcing practice through ongoing engagement with both managers and policy-makers.

Managing Editor Chris Middleton said: "I'm delighted that Professional Outsourcing has been appointed to the advisory board and chosen as media partner for a brand new research centre at one of the UK's leading academic institutions. This magazine is founded on the principles of providing in-depth, independent research, expert analysis and thought leadership - aims that we share with Loughborough University School of Business and Economics. We look forward to working with the Centre for Global Sourcing and Services to bring our readers the very latest research from some of the leading academics in the field."

Professor Oshri said: "In many ways, this is a perfect time to launch a research centre on global sourcing of IT and business services. With mounting reports that many organisations struggle with their outsourcing and offshoring engagements, the unprecedented growth in shared service investments and - on the other hand - recent reports about significant back-sourcing, it has become imperative to understand the effects of such trends on management practices, policy making and society."

Oshri added: "Partnering with Professional Outsourcing is key to achieving the research centre's key objectives. First and foremost, we will work closely with the editorial team of Professional Outsourcing to disseminate the results of our independent research and achieve a high impact on the magazine's broad readership. At the same time, we will be looking for valuable input from the magazine and its readership about contemporary and long-term trends in the sourcing domain that will guide our research agenda."

The Centre draws upon an outstanding network of researchers from the School of Business and Economics, London School of Economics, Warwick Business School, Bath University and Said Business School

www.professionaloutsourcingmagazine.net

The first privately run NHS hospital, Hinchingbrooke Hospital in Cambridgeshire, has claimed that waiting times, cost savings and care have all improved under the new management.

The Hospital has been run by the private company Circle since February over a 10-year contract.

The hospital prior to the takeover had been identified as failing to offer effective clinical care as well as being financially unviable.

Circle chief executive Ali Parsa described how the hospital had been improved. “You let the doctors and nurses and the healthcare professionals - who know the patient best and who know their services best - and let them take charge.”

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Staff at Atos IT have voted to strike over pay. 89 percent of Atos IT workers and 95 percent of healthcare workers of the Public and Commercial Services Union (PCS) voted against below-inflation pay offers.

In rejecting the new pay offers PCS Atos members then voted in favour of a strike. The action could impact on a range of current projects including BBC technological support, MoT test center facilities and backup services for the Welsh Assembly.

The strike action could take place as soon as the next few weeks according to the PCS. Mark Serwotka, PCS general secretary, said : "Atos is desperate to bolster its damaged image by its association with the Olympic spirit of hard work and success, but that the reality is that it makes its profits on the backs of its low-paid staff and from taxpayer handouts.”

Eric Van Der Kleij, the outgoing chief executive of Tech City Investment Organisation (TCIO), has become an advisor to the Canary Wharf Group.

The move comes as the development group seeks to enhance Canary Wharf’s offering, and increase the links between financial and professional services in the area, as they seek to attract new businesses and increased investment.

Sir George Iacobescu, Chairman and Chief Executive Officer of Canary Wharf Group, said: "We welcome Eric's expertise on to the team. He will help us to create new, customised business locations, fused with technology and an attractive lifestyle, that aim to match exactly what businesses will require twenty or thirty years into the future".

Microsoft has announced the closure of its acquisition deal with Perceptive Pixel (PPI).

In buying PPI Microsoft has added the company’s expertise in multi-touch large-scale displays to its roster of services and enhancing Microsoft’s presentation and collaboration products.

The deal was announced back in July and comes as Microsoft seeks to make large-screen touch displays the norm in workplaces.

Over the last few days and the weekend, reports have emerged demonstrating that digital communications have been unable to cope with the rise in users.

On Saturdays the BBC suffered technical difficulties with GPS services due to overloaded communication networks, including reports of twitter use being responsible.

Reuters quoted an International Olympic Committee as saying “if it's not an urgent, urgent one, please kind of take it easy” In reference to Twitter use.

HP have announced the release of new services from its Enterprise Services department, aimed at helping clients to enhance customer satisfaction and increase revenue.

The new Customer Engagement Management (CEM) services are designed to deliver greater customer experiences for clients across a range of mobile devices, as well as social media.

Danila Meirlaen, vice president, Business Process Outsourcing at HP, said in improving the customer experience: “HP consultants help drive this transformation based on our deep heritage of contact-center operations, industry experience and global presence, assisting clients so they can increase revenues and customer satisfaction.”

Mexican cement giant Cemex has entered into a deal with IBM to create savings of $1 billion over 10 years. The deal will see the company outsource jobs globally to IBM as part of the companies cost saving measures.

The move is expected to affect between 1,500 and 2,000 staff and comes after Cemex posted heavy losses from the housing market collapse in the US and a $16 billion acquisition of Rinker.

Cemex Chief Financial Officer Fernando Gonzalez spoke to Reuters, saying “Starting 2014 is when we will have a full year of savings.”

The contract ranks as one of the largest outsourcing deals in Latin America.

Oracle has announced the purchase of Xsigo which specialises in network virtualisation. While the finical details of the purchased were not released, the move is expected to be finalised by the autumn of this year.

The move comes as Oracle looks to create its own virtualisation offerings. Xsigo currently has companies such as eBay and BT among its customers.

Lloyd Carney, CEO of Xsigo, said “with Xsigo, customers can reduce the complexity and simplify management of their clouds by delivering compute, storage and network resources that can be dynamically reallocated on-demand".