Industry news

NOA Monthly Seminar

Cloud Computing – Sponsored by IBM

Tuesday 15th February 2011

As the world of industry changes, the outsourcing sector has found it increasingly important to adapt to new technologies which are continuing to drive forward new, innovative services. If 2010 was the year of the Cloud, then 2011 looks to be no different as the market matures, and Cloud services continue to gain momentum.

The NOA Monthly Seminar on Cloud computing focused on a comparison of traditional methods versus current Cloud computing, Cloud models, risks, security, G-Cloud and case studies.

Andy Rogers, NOA Board Member and Chris Mole, IBM, chaired the event and outlined that the seminar would be based around the practicalities of Cloud along with the risks.

Chris said: “There has been a fundamental gear change regarding Cloud. Most organisations now have a ‘Cloud first’ IT policy and it is absolutely imbedded into our strategy. Although it is important to mention that Cloud will and can not solve all problems.”

John Willmott, NelsonHall, looked at why companies should move to the Cloud and focused on a comparison of Cloud computing models, Cloud’s use in private and public sectors, differences between SMEs along with the medium and large corporate enterprises use of Cloud.

Attitudes Towards Public Cloud

• While private cloud has benefits of security it tends to lose on every other measure. The scalability isn't present and the level of internal management makes it difficult to see where the benefit would lie.

• The main benefits in public cloud are very transparent - private cloud still relies too heavily on investment and administration time. There is not the same level of scalability.

• Public cloud is the only way to achieve good scalability and companies would probably struggle to find cost benefits in implementing private systems

• Buying SaaS lowers security risks when compared to with core applications in the cloud therefore public systems would meet cost and security criteria best.

Attitudes Towards Cloud Delivery: Hybrid Cloud

• To meet cost expectations, elements of public cloud are needed to provide the acquired scalability - the private cloud element, although easier to add resources to, is still less scalable but may be necessary to achieve a higher level of security.

• To ensure improved privacy, better control and still benefit from the scalability

• It looks likely NelsonHall will opt for some sort of hybrid and are less concerned about the data security for cloud based applications and more concerned about what access that application has to internal enterprise systems and the potential security gaps they may have to deal with.

Regarding the initial adopting of Cloud, John believes that SaaS will be present in several forms. “Email is likely to move that way as are desktop office suites and the specialist applications used within some sales teams and niche product support teams. We already have some SaaS in administrative and management desktops.

“Cloud is limited to applications around the periphery of the business. We think this will change through 2012 with some desktop applications, email especially being largely hosted in the cloud. Major infrastructure will remain internal until we can be certain of security risks.”

Half of organisations expect to begin to implement Cloud in production environments by end 2012. The production environment that will initially be moved to Cloud are typically those with high and variable storage environments such as contact center systems and CRM systems and those already regarded as being exposed to outside scrutiny such as Web-based and e-commerce systems.

NelsonHall Conclusions

• Despite the hype, Cloud is real

• Improving the business’ access to technology, and pay-per-use scalability are key drivers

• Hybrid cloud favored in short-term

• Initial adoption around email, collaboration, and desktop applications

• Initial production applications will be storage-intensive and web-based

• SaaS will be used for fringe functionality

Shiv Kumar, Executive Vice President, Zylog Systems Limited discussed the options and advantages of the various Cloud models and what Cloud computing can offer in its various forms.

Shiv said: “Cloud computing can provide more dynamic, resilient and cost-effective IT systems. A different user experience and business model which can offer standardised offerings, rapid provisions and flexibility on price.

As an infrastructure management and services delivery method it utilities virtualized

resources, it can be managed as a single large resource and has the ability to deliver services with elastic scaling.

Cloud Competency Focus

• Establishing cloud reference architectures and framework – Cloud/SaaS -> BPM/SOA

• Delivering cloud enabled business solutions/products pro-actively . Enterprise 2.0 SocNet, PowerCube DaaS, PowerMigrator, Business Solutions & Mobile Solutions

• Best practices to address the known challenges and limitations – Compliance and Regulatory issues

• Providing consulting and implementation services

• Address the time to market and TCO/ROI

Rob Sumroy, Head of Information Technology and Outsourcing Practices, Slaughter and May, outlined the risks associated with Cloud computing however emphasis was placed on risk being a good thing – risk is why we do business.

Risks associated with data include locality, security, confidentiality, retention / preservation, access and deletion.

Most standard Cloud contracts will carve out typical liabilities – even direct losses for standard services. Pay as you go provides no guaranteed income for service providers.

Cloud risks include service availability (service credits), warranties and indemnities, liability, governing law, jurisdiction / arbitration and variation - reserving right to vary Ts&Cs without notice to customer.

Risk Conclusions

● Risk is not inherently bad

● Greater rewards often flow from higher risk

● Challenge: to find the right level of risk in the relevant circumstances

● Cloud contracting presents altered risks and new circumstances

● Informed engagement with Cloud providers

● Strategic embracing of Cloud opportunities

Darren Argyle, IBM UK Security and Compliance Offerings Leader, IBM,said: “There is no other tech trend like Cloud that has put security in the spotlight. Like any technology, we need to take a risk based approach.”

Darren provided an overview of Cloud security and describe how to address the challenges to ensure security.

“The right security must be embedded in the Cloud. Every business today has an element of their business outsourced –Cloud risks are similar to the key outsourcing risks. If security is approached properly, it can actually be an enabler.”

Companies moving to Cloud should:

Define a Cloud strategy with security in mind

• Identify the different workloads and how they need to interact.

• Which models are appropriate based on their security and trust requirements and the systems they need to interface to?

Identify the security measures needed

• Using a framework such as the one IBM uses, the IBM Security Framework and Blueprint, allows teams to capture the measures that are needed in areas such as governance, architecture, applications and assurance.

Enabling security for the Cloud

• The upfront set of assurance measures you will want to take.

• Assessing that the applications, infrastructure and other elements meet your security requirements, as well as operational security measures.

After the break, users of Cloud provide case studies which included presentations from Mark Farrell - CSC, Adrian Steel - Royal Mail, Paul Davies – Verizon and Pete Beevers – IBM.

Copies of all the case studies and presentation slides can be found on the NOA website - http://www.noa.co.uk/

In recent times, we’ve seen remarkable progress made on public sector transparency in this country, a development which has been helped by the government’s decision last week to announce that it is launching a new website for procurement contractors looking to win public sector jobs that cost over £10,000.

The announcement is aimed at encouraging more small businesses to get involved in the procurement process, while ensuring that procurement opportunities will be available for everyone, free of charge. This will, inevitably, make government deals more transparent than ever, and will see the end of what Minister for the Cabinet Office, Francis Maude, calls ‘the procurement oligopoly’ which has seen innovative, small businesses and organisations shut out of contract processes early on, largely because of unnecessary bureaucracy.

Clearly, the government’s move is a positive one – after all, larger organisations hogging public sector contracts is not only bad for those affected, it's also bad for government, as it stifles competition, and means that they have fewer options. Public sector procurement has long been an issue for SMEs, with a huge number struggling to bid for public sector contracts due to a lack of awareness of the opportunities that are available and the red tape surrounding the application process.

Greater transparency will make public authorities more accountable, and could be an effective tool in deficit reduction, driving out waste and double spending. However, the large scale release of data will almost certainly bring with it a number of issues – not least of which are significant privacy issues and a hefty price tag. It also looks as though public sector organisations will need to transform the way they operate as a direct result of the government’s transparency campaign. Not only will they be asked to re-think their systems, processes and culture, but also the ways in which they share information in order to drive efficiency, improve public trust and increase engagement with public services.

The desire to see a more open, transparent government – driven initially by the expenses claim scandal, but subsequently filtered into other areas of policy – means that we’re certain to see more investment in this area in the months to come. There’s been a longstanding desire to see the government becoming more accountable in the way it tenders outsourcing contracts, and uses data.

SMEs are a key area for the NOA and with greater levels of transparency in place we will be able to measure the success of smaller organisations and hold the government accountable if the new initiative is deemed unsuccessful. It is this type of measurement and transparency that needs to be adopted more widely across the public sector. Will these plans result in greater transparency? Or is it all just smoke and mirrors?

Like all new initiatives, the proof will be in the pudding – but if you are an SME and would like to find out more about outsourcing, you can find out more at: www.noa.co.uk

Logica has posted financial results for 2010 which shows that they are "positioned for growth".

At £3,697 million, full year revenue inched up one per cent on an adjusted 2009 total, but revenue in the fourth quarter was up 4 per cent.

The results were ahead of analysts' predictions of £3,683m even though major public sector contracts have not been forthcoming.

In the past, Logica has been better known for its consulting work than outsourcing. But last year the group's consulting and professional services business shrank 5 per cent while outsourcing grew 10 per cent

CSC have launched Patient in Your Pocket™, a wireless application for BlackBerry® smartphones that enables on-the-go healthcare professionals to deliver quality patient care.

Patient in Your Pocket equips mobile healthcare professionals with immediate, secure access to patient information whenever and wherever care is provided.

The solution integrates with clinical systems, enabling caregivers to retrieve current and accurate patient information, update patient data and conditions while care is being given, collaborate, and conduct administrative functions such as coordinating appointment schedules – all while away from the desktop.

Patient in Your Pocket is also available in the UK and in the Middle East, and it has already proven to be valuable for mobile doctors, nurses and health workers delivering front-line care to patients,” said Mark Roman, president, Global Healthcare Group, CSC.

Carrenza Powers the Cloud for Red Nose Day 2011

Technology partner delivers scalable solution, ensuring zero downtime for charity’s websites and donations platforms

Comic Relief has announced that it will be working with its trusted cloud computing partner Carrenza, to provide and oversee the donations and core websites platforms for Red Nose Day.

Carrenza’s enterprise cloud computing platform will be used to process hundreds of thousands of donations, in just a few hours, raising funds that will give extremely vulnerable and disadvantaged people in the UK and Africa a helping hand to turn their lives around

This partnership builds on the success of Carrenza’s work with Comic Relief for Sport Relief and Red Nose Day over the last four years.

During Sport Relief 2010, Carrenza provided the same trusted technology to handle a staggering 125 donations per second at its peak, contributing to the £44.2 million that was raised in total. Carrenza is providing the same scalable hosting solution for Red Nose Day 2011, which has the processing power and resiliency needed to support Comic Relief’s record-breaking donations platform.

Tim Savage, Donations and Web Technology Manager, Comic Relief, said: “Red Nose Day only takes place once every other year, so it’s crucial that we get it right every time. This is especially true for the technology that we bring on board.”

Savage continued, “We need to be able to scale up to meet spikes in demand over a matter of seconds, avoiding any downtime and without wasting resources on latent hardware for months in-between. Carrenza has enabled us to overcome this challenge, providing us with a resilient platform that can scale immediately to meet our needs and has never let us down.”

KPMG have announced the closing of an agreement to acquire the business of advisory firm EquaTerra.

The transaction focuses on organic and inorganic opportunities in select high-demand market sectors. It is hoped that the agreement will provide clients with a full life-cycle of capabilities for companies seeking to reduce costs and improve effectiveness and efficiency.

“EquaTerra is an ideal fit for KPMG and we look forward to welcoming the EquaTerra team to the KPMG network family,” said Timothy P. Flynn, Chairman, KPMG International. “Through this acquisition, clients of KPMG member firms will benefit from the addition of a market-leading sourcing adviser to help them transform their organizations into more flexible enterprises in a way that meets today’s complex market demands.”

Mark Toon, former Chief Executive Officer of EquaTerra and current KPMG LLP principal, said that the deal adds value for clients of both organizations. “Joining a network with KPMG’s capabilities and global scope provides great opportunities for our employees and clients,” Toon said. “KPMG’s extensive sourcing experience, its Big Four market presence and its reputation for relentless execution is an ideal complement for EquaTerra’s business transformation capabilities and highly respected reputation in the shared services and sourcing advisory sector.”

Mahindra Satyam, a leading global consulting and IT services provider, has announced that its business process outsourcing arm, Mahindra Satyam BPO has renewed its existing contract with NAVTEQ for a further period of two years. Mahindra Satyam BPO’s relationship with the customer is over five years old and provides a wide portfolio of services to the customer.

Luther Siebert, Vice President of Global Production Operations at NAVTEQ, said, “We are delighted to extend our contract with Mahindra Satyam BPO. Mahindra Satyam BPO has always displayed initiative and enthusiasm to support the complex processes required in the creation and updates of NAVTEQ’s digital maps. They have played an important role in helping Navteq provide best-in-class geospatial services to its customers globally.”

Steria, a leading European IT-enabled business services provider, today announced it has signed a Strategic Outsourcing Framework Agreement with the Financial Services Authority (FSA) to support and develop operational and regulatory systems.

The framework agreement includes seven aspects of work, wherein Steria has secured the right to bid within the following three areas: Infrastructure, Applications Management and BPO. The agreement will enable the FSA to be a more efficient regulator through technological upgrades, streamlined processes and enhanced productivity.

Gareth Lewis, chief information officer at FSA, commented, "The rationale behind the new supplier framework is to provide increased competition amongst our supplier base given the enormous volume of work we anticipate in the next 4 years. Steria has a proven track record in delivering cost-efficient support functions to the FSA, and we are confident in the team's ability to continue to deliver. My team and I look forward to working with them."

Businesses may be investing in IT at the expense of hiring employees, a Forrester Research analyst has suggested.

In a report entitled “IT Investment May Be Hurting US Job Growth”, Andrew Bartels observes that while IT investment by US businesses rose 11% in 2010, and profits grew 28%, employment was flat. “It certainly appears that businesses have been buying technology instead of hiring workers.

Bartel said: “This pattern was most pronounced in manufacturing industries like mining, forestry products, fabricated metals, motor vehicles, and machinery. In a quarter of industries, tech investment rose by 7% on average while employment was down by 2% on average.”

The Chancellor’s Autumn Statement on 29 November 2010 announced a consultation on some radical improvements to the tax treatment of intellectual property.

The consultation was undertaken on the proposed introduction of a preferential regime for profits arising from patents, known as the ‘Patent Box’, which could see royalties and other profits from patented products and technologies being taxed at just 10 per cent. The consultation ends today with a report to follow shortly.

John Dethridge, Tax Partner & specialist in R&D tax reliefs at Menzies comments: "It seems unlikely there will be major changes to the taxation of innovation and intellectual property (IP) tax relief as the Government is satisfied with the effectiveness of the current Research and Development Tax Credit regime. This encourages early stage research and follow up development where technological uncertainty exists. However, further consultation will follow in spring on the proposed new Patent Box.

“This is being proposed to improve the tax regime beyond the R&D stage, when the product is complete and the IP created is generating an income stream. Many other countries have a reduced tax rate for such income and the UK is currently seen by many corporate investors as uncompetitive, leading to IP being located in other tax jurisdictions, with potentially damaging implications for tax revenues and for the UK economy.

“Any improvement in the taxation of IP is to be welcomed, but we are some way off seeing what the finished article will look like. Some IP is not patented, and it seems this may be overlooked altogether. The identification of embedded patent income may also prove to be far more complex than anything in the current R&D tax credit claim process. Specialist tax advisers are going to be needed to ensure that taxation of innovation is minimised."