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“It’s in the cloud.” But really, where is your data?

Posted by on September 23, 2015

Back in December 2014, technology news website ZDNet ran an end-of-year feature entitled; ‘2014: The year the cloud killed the datacenter’.

Written by Jason Perlow, the article argued that a sea of change was taking place in the business IT market, with large organisations increasingly turning to cloud providers to provide a broadening range of services.

Despite the provocative title, much of Perlow’s argument was relatively non-controversial. Few would argue that the software as a service model is gaining traction in a business environment where cost reduction and operational efficiency is an imperative. And as businesses move functionality onto the cloud, it may seem only natural to see some reduction in the demand for traditional data centre capacity, both in-house and outsourced.

But does that spell the end of the data centre. Actually no. What we’re really seeing is an evolution the in the marketplace.

It is certainly true that that over the next few years, organisations will be asking themselves the “cloud versus data centre” question. Or to put it another way, they will be looking at a broad range of IT functions and asking which should be retained in-house, which should be outsourced to a data centre provider and which should be supplied by a cloud provider.  

The key attraction of the cloud is often defined in terms of cost coupled with the removal of the administrative and technical burdens associated with running, say, e-mail, CRM or accounting functions in-house or in tandem with a data-centre provider. Indeed, one perceived advantage of the cloud model is that it does away with data centre costs.

The data centre hasn’t gone away – it’s just somewhere you don’t have access to

Of course, the data centre hasn’t gone away. Cloud providers operate their own data centres and they colocate within other data centres. The in-house managers of a newly cloud-enabled company see only browser-based software, but somewhere in the world the server banks and cabling still exist.    

This raises an important question. When businesses consider moving at least some IT functionality to a cloud model, concerns about data security, resilience and service quality tend to rank high on the list of questions asked to providers and it’s right and proper that they should. But is there an equally important issue that can be forgotten? The issue being…”where on earth is my data?”

An organisation that manages its critical IT functionality tends to know where its data is stored. That’s true if the data sits within the four walls of their own office building or if it is outsourced to a provider with facilities in clearly specified geographical locations.  

The same is not necessarily true when organisations use cloud providers. For instance, a UK business may be using a number of cloud providers, each with their own data centres. Crucially those facilities could be in the US, Europe, India or the Galapagos Islands (how did they even manage to get connectivity?). The point is your data still lives in a physical location somewhere. You just don’t always know where that somewhere is. And do you care?

The data sovereignty issue

On the face of it, not knowing where your data lives is not necessarily an issue. We live in a globalized, wired world and we’ve all become used to the idea of virtual space. But, in reality, the place where data is stored and processed matters a great deal. 

It’s a recognised convention that data is subject to the laws of the jurisdiction where it is stored and while cloud computing has to some extent broken down geopolitical barriers, that principle of data sovereignty remains iron-clad. 

In practical terms, a UK company that has no interests beyond its national boundaries could find its data subject to the rules and regulations of the US Patriot Act if a cloud provider’s data farm is in the States. Equally a US business’ data could fall within the European Union Data Protection Directive. Organisations also face potential security and legal problems if their data is stored in jurisdictions which are less stringent in terms of privacy and intellectual property laws than their US or European counterparts. 

The cloud is undoubtedly changing the way organisations approach IT but the issues surrounding security and privacy remain in play regardless of whether a business stores and processes data in-house, outsources to a data centre or takes advantage of cloud services. The difference is that those who use the cloud have not necessarily been aware of the geographical sovereignty issues.

But awareness is growing. A recent report from technology research firm Vanson Bourne recorded 86% of chief information officers saying that UK data should be stored in UK data centres.

And the cloud industry is responding, with big international players such as Google and IBM rushing to build local data centres to address concerns about sovereignty. Additionally cloud service providers including Amazon and Microsoft are choosing to partner with local data centre providers, to offer connections directly to their cloud platforms from within existing data centre spaces.  In other words, we won’t necessarily be seeing fewer data centres. In fact, as the industry evolves, local data centres serving local businesses will be a key feature of the cloud industry.


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