Sharing compute resources in the cloud requires trust, and if your organisation deals with a lot of sensitive data, this means thinking very carefully about the organisations you are willing to share with, says David King, chief technology officer at business and technology service company Logica.

Most organisations are still very reluctant to put their sensitive data in a public cloud, where they know nothing about the other companies using that cloud, and have very little influence over how resources are distributed. However, private clouds often fail to deliver the elasticity and cost efficiency of public cloud.

The solution, according to King, is to create community clouds. This is where a group of like-minded organisations that share the same values, and are prepared to work together, share compute resources – and potentially information – for the benefit of all involved.

“The cloud is all about sharing,” says King. “Virtualisation is letting software share computers, and that means it's more efficient and cheaper. The next stage is shared software, so if you use instead of having an in-house CRM system you can be using it in half an hour instead of three months. It's faster and more agile.

“The real differentiator, however, is the ability to share information. That is what the cloud is outstanding for. And then you get social or business or economic growth. You just need to look at what's happening with things like Amazon and Facebook to get a sense of that.”

King explains that when a consumer buys a product on Amazon, thousands of other companies are able to see what that consumer is buying, enabling them to recommend similar items that may be of interest. This is because Amazon shares its customers' information in the Amazon cloud, and access to that information is precisely what attracts other vendors to sell on Amazon.

“It's not because they get a cheap web service. It's because they're part of that ecosystem,” says King.

This model has been proven in the consumer world, but can also be replicated in an enterprise environment. One of Logica's customers – Finnish insurance company Fennia – has built a community cloud that allows infrastructure and information to be shared between all of its brokers.

Before Fennia moved to the community cloud, it took a long time to transact sales through the brokers. However, by putting the brokers into an environment where they are sharing the same information and the same software in the cloud, they are able to sell the right policies and resolve claims more quickly, because all of the customers' information is readily available.

King says that Fennia can now take on a new broker in a matter of days, whereas before it might have taken weeks to buy the new computers, install the software and set up the new broker's profile. Allowing the brokers to co-exist in a community cloud has also made the whole ecosystem more agile than if the brokers were in separate clouds.

“The broker could have been sharing hardware on Amazon, and the insurance company could have been on Microsoft's cloud, and it would have been cheap and quick to deploy, but the information isn't shared. When you put them into an environment where the information is being shared, you get that Amazon effect," he says.

G-Cloud communities

Logica is one of the many suppliers to the UK government's G-Cloud, an initiative designed to achieve cross-government economies of scale and deliver ICT systems that are flexible and responsive to demand in order to support government policies and strategies.

King believes that, while it will inevitably take time to become established, the G-Cloud is a relatively substantive move on the part of the government, and will enable a wide range of departments to become more agile and work more efficiently together.

“You'll see local governments in the UK starting to partner together in communities because they trust each other, they're like each other, they play by the same rules, they understand each other, they have the same values - so a community cloud makes sense for them.”

King says that the government has been pioneering in its move to digital business, allowing UK citizens to do things like pay their taxes, get healthcare, and renew their driving licenses online – which is far more than many commercial businesses have managed. However, many of those systems are not on elastic shared platforms that are pay-per-use.

The economic argument for cloud is somewhat undermined by the vast scale of the government's IT estate, because when you have more than 20,000 servers, a private cloud can be as cost effective as a public one. However, King believes the elasticity of the cloud will be invaluable to the government when it comes to managing seasonal peak loads, like when everyone submits their tax returns on 31 January.

Although hundreds of cloud vendors are currently listed in the government's CloudStore – an online catalogue of cloud-hosted IT services for use by public sector organisations – King is not worried about cloud sprawl.

“I think economies thrive by having multiple players,” he says. “The list will get whittled down. There will be some blockbusters that take most of the revenue, but there will also be a very long tail that still make a respectable business out of it.”

King points out that few of the services currently offered in the CloudStore address all of a government department's needs, so buyers will be looking for solutions that bring together a selection of services.

“Partners look for collaboration between vendors – ecosystems of vendors that between them make a package of services that work for local government,” he says. “I think an important aspect of that is the service integrator or the cloud broker, which is the orchestrator of many of those cloud services. That's where Logica positions itself.”

Dealing with data

While the cloud offers a lot of technical and economic benefits, the thing that really makes organisations sit up and take notice is the potential for business agility and growth, according to King.

“When it's easier to do things with someone else than do them yourself, you get trading. And when you get trading, that's when you get economic growth or social growth,” he says. “That's why I think the cloud is the internet’s unfinished business.”

If businesses are to become more agile, however, it is essential to have a regulatory environment that is receptive to the idea of information moving around. King believes that the European Union's moves to become more cloud-friendly and make data privacy regulations consistent across all countries will be key to driving cloud adoption.

“The railways only really started working in a cross-border sense when you managed to work out the regulatory controls for trading across boundaries, and all the tariffs that happen when you cross borders,” he says. “In a sense the same thing needs to happen in the cloud.”

Meanwhile, as cloud computing becomes more prevalent, IT architectures are becoming more complex. For example organisations might choose to put some of its applications in a community cloud, others in a private or public cloud, and keep others on-premise. According to King, the trick is to architect solutions at a business level as well as a technical level.

“In the insurance example, for instance, the insurance company and its brokers share details of the policies they're selling in the same cloud, but their HR systems are all different, their email systems are all different,” he explains. “You could paint yourself scenarios where it would become important to get more and more into the same cloud, but actually the real business benefit comes from having the policy shared, and you could say you don't need to worry about the rest of it.”

As a result of this evolution, the role of Chief Information Officers (CIOs) is changing; they are becoming less concerned with technical implementation and more focused on managing the company's information.

Once organisations come around to the idea of cloud, they often end up using several cloud services, and this means CIOs have to deal with a whole range of cloud vendors, on top of managing their traditional applications. King says that bringing everything into one service management environment becomes increasingly important.

“That's the sort of thing that CIOs are concerned about – how do I manage this hybrid estate? Is my data safe? Am I legal with it? And also, am I exploiting it well?” says King. “Data is basically free, it's the knowledge of what to do with it that is valuable, and people that understand what to do with it in a business context are the ones that will success.”