Public cloud remains difficult sell for financial firms

Thursday, October 14, 2010

Regulatory issues around data protection are causing financial firms to turn toward private cloud computing rather than the public cloud, Computerworld reports.

Despite the higher cost of infrastructure associated with private cloud computing, many IT managers in financial firms say public cloud-based systems are not yet ready for enterprise adoption.

According to Computerworld, highly regulated industries are not yet convinced public cloud vendors can offer the same security as private clouds. The absence of standard service level agreements are also a cause for concern.

Jeffrey Lass, a network operations and virtualization engineer at Munder Capital Management, said his company opted for a private cloud because it “has many of the same characteristics of a public cloud but with much higher control, security and availability.”

Research firm IDC predicts the cloud computing market will grow from $23 billion today to about $55 billion in 2014, but much of the growth so far has been in new hosted services. IDC analyst Richard Villars noted that most enterprises aren’t yet replacing existing applications with cloud-based offerings.

In September, technology executives from several major cloud vendors met with a congressional committee to advocate stronger data protection standards. The cloud vendors told lawmakers the lack of legal certainty is deterring some businesses from adopting cloud services.