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As the impact of a double-dip recession takes hold, the increasing need to curtail costs is driving a growing number of businesses to adopt cloud-based solutions to their IT needs. According to KPMG’s latest Technology Issues Monitor, the dominant model in cloud computing is now Software as a Service (SaaS) which provides businesses with on-demand software, eliminating the need to install and maintain programmes or pay for licences. It is a market worth $12.3bn worldwide in 2011, with projections to reach $14.5bn before the end of 2012. Latent concerns over security, stability and suitability are also not enough to stop growth – but they are causing businesses to focus on more stringent service level agreements, contract terms and governance. Steve Watmough, a partner in KPMG’s CIO advisory team, said: “As the current tight economic conditions are felt across the globe, tight IT budgets are pushing demand for cloud computing services. The attraction, especially for the smaller business, lies in organisations no longer needing to find funds for infrastructure, deployment or training. “With an increasingly mobile workforce, there is a greater need to access data from smart phones or tablets. SaaS allows for the integration of powerful business apps on mobile devices, meaning that it is only likely to increase in popularity with the corporate environment.” The analysis shows that as the demand for SaaS grows, service providers are competing to launch new offerings and add new capabilities, with many trying to differentiate themselves by introducing industry-specific solutions. However, a number of high-profile problems have ensured that customers still have four key concerns – security, network stability, the limited integration with their existing systems and the time it takes for organisations to implement new technology. Steve added: “The need for security means businesses are pushing for stricter governance controls around cloud computing and SaaS. But security is not where concerns stop, and customers are also increasingly emphasising uptime and performance in their negotiations with suppliers. “They want opt-out clauses which weren’t so easy to secure with infrastructure investments, and suppliers would be well advised to take these concerns seriously or lose out to the competition.” Other Business Money News
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