Head in the Clouds

Revolutionary, cost-effective technology. Is cloud computing the way forward for the development finance sector?

Cloud computing by popular definition is an emerging technology where all types of resources are centralised and can be accessed for a fee. All data is stored not on a grid or a peer, but in cyberspace. A popular example of cloud computing is the ubiquitous e-mail. Touted to be the next big wave in enterprise technology, cloud computing is making corner offices sit up and take notice world over. What may the silver lining be?

Cloud computing has managed to morph technology into a public utility. Cloud computing is testimonial to Nicholas Carr’s argument that IT is increasingly becoming a commodity. This technology boasts of a goliath advantage over all others; its customers need not invest in expensive infrastructure and can easily access services for a subscription or pay-per-usage fee. Not only are they able to do away with capital expenditure, they can also avoid operational overheads, servicing and maintenance costs and provisions. Since these systems are constructed with diligently controlled interdependence between modules, there exists a high degree of reliability and consistency.

The main advantage of cloud computing is flexibility; the hardware infrastructure can be scaled up and down based on the requirement. Other features include easy recovery from failure; bringing up development or test instances; and easy upgrading to new software release”, says Raman Taneja, Head of Technology at IFMR Rural Finance.

Cloud computing possesses features that seem ideal for the development finance sector. It is therefore imperative that we take a closer a look at what it means for microfinance as a whole and what promise it holds as the perfect enterprise technology solution.

“This is one of the solutions, an organisation can look at. Organisations find cloud computing attractive because of less capital expenditure and per-usage operational expenditure model. Organisations need not spend extra money on managing resources (human, servers, data centres etc). This is not their core competence either. Cloud computing is agnostic to any sector and can be deployed based on requirements and future roadmap”, says Raman.

However, will organisations in the financial inclusion space find it viable to venture into cloud computing territory? And if they do, will they be able to execute a smooth technology transition? Raman is of the opinion that, cloud computing creates flexibility in terms of resources.

Transition of course, is a more subjective issue and depends on what technology the organisation is currently using and what they desire to use in the future.

Given the sensitive nature of enterprise information, managing it in a centralised architecture is no smooth ride. Threats to data security rear their ugly heads even in the most idyllic security scenarios. Data Security and Governance in cloud computing are battles that service providers fight and this does little to allay the concerns of organisations, since as users, have no control over security mechanisms.

This is a challenge the entire industry must overcome by investing in efforts to create unassailable solutions for Data Governance and Data security. But again, this is true of every market created for data management purposes and with the heightened sense of awareness about data security; the solution cannot be far.

Critique aside, this technology is no passing cloud.