IT providers are resisting the cloud, says BT

Speaking on Tuesday, JP Rangaswami told the audience at the Powered By Cloud event in London that he was "disappointed" at cloud adoption levels. He said there was "pushback" from suppliers about moving to cloud computing, as well as a lack of demand due to a paucity of innovative services.

The cloud represents an opportunity to "compress" wasted resources such as hardware and storage, Rangaswami said. He added that the prospect of cutting that waste, and of customers saving money that way, has to make providers "start thinking turkey, Christmas and kitchen".

"Who stands to lose, if the growth in the software required to manage that hardware eases up?" Rangaswami asked. "Who stands to lose if the way we license software changes dramatically? People don’t like talking about the fact that there’s a $200bn [£130bn] industry that’s desperate not to become a $50bn industry."

Rangaswami added that if the IT industry does not contract through a shift to the cloud, "the cloud hasn’t actually happened".

‘Lack of imagination’
The second major barrier to the spread of cloud computing, according to Rangaswami, is "a complete lack of imagination" about the new products and services that are going to emerge for the cloud.

"What new business models have emerged in the last 18 months to take advantage of the cloud?" he asked. "I could die of boredom every time I hear about ‘new ways to collaborate’. The demand side has a problem. If we thought the demand side was cost driven, guess what, we had the environment [during the recession], but there were no biters. The cost driver alone is not going to solve the problem."

Asked what BT itself is doing to move to the cloud, Rangaswami said the company is mainly focusing on educating its own staff by getting them to use the cloud within the organisation. However, he conceded that BT has not yet fully worked out what cloud services it wants to offer to its customers, and the company is itself wary of moving away from its current business model.

"Own use is a vague driver to getting the proposition understood," he said. "On the supply side, it’s investment, but what do you invest in if you haven’t got your proposition straight? We take [the cloud] seriously, but unlike other industries, we know something about declining business levels."

Rangaswami also suggested that potential customers’ concerns about compliance and security in the cloud are "usually good for a delaying tactic".

"The cloud is not going to stop people being stupid," he said. "The cloud doesn’t represent a change in security. I’m not denying we have issues to do with migration, data portability and data protection, but these are not new things. We have dealt with them for a while and will continue to deal with them. They are not reasons to avoid the cloud."

Regulations warning
Data-protection regulation could even become the new trade protectionism, Rangaswami warned, referring to rules such as those that force European companies to keep sensitive data physically within the EU.

"When I ask [customers] why this is important, I say: ‘Do you know where your corporate voicemail resides? No. So why is it suddenly so important in the cloud, if you didn’t know in the first place?"

This suggestion earned a retort from Microsoft UK’s platform evangelist, Mark Taylor, who noted in a later presentation that "assuming that you can overcome the regulatory environments that exist in most businesses is probably not the case for most people".

However, Taylor echoed Rangaswami’s point about legacy providers being wary of changing their business models in a shift to the cloud.

Asked when Microsoft is going to provide virtualised desktops as a service, Taylor replied: "For companies like Microsoft, it’s really a matter of balancing the stake they already have within their customers against the opportunity that this presents. It’s a commercial challenge and about ensuring the infrastructure that delivers it is up to snuff."