Adoption of the public cloud for Canadian firms is still a couple of years away because of concerns

Canadian firms shy from cloud because of Patriot Act

Fear of the U.S. Patriot Act and lack of familiarity are the final hurdles to clear before Canadian firms are ready to adopt cloud computing beyond the company firewall, says CA Technologies’ country manager for Canada.

Jimmy Fulton says Canadian firms are currently open to cloud computing so long as they can control the entire process on premise. CA refers to this as “private cloud”, an IT infrastructure that includes defined resources and a flexible way to deploy them.

It’s an approach many Canadian firms prefer, instead of surrendering control to data by putting it in a public cloud and likely have it reside somewhere south of the border.

“The Patriot Act is the most real, tangible and widely known challenge for SaaS [software as a service] and the cloud,” Fulton says. “It’s not insurmountable – you have to host it somewhere else.”

The Patriot Act was one piece of anti-terrorism legislation enacted in the aftermath of the Sept. 11, 2001 attacks on the World Trade Center. It gives American authorities sweeping powers without the need for transparency. That includes the ability to retrieve data stored on U.S. soil and scour it without the need to inform the owner of the data.

Some Canadian security experts say the concern is overemphasized and Canadian law enforcement has similar capabilities. But whether a real or perceived threat, the Patriot Act has hindered cloud-based adoption in the Great White North.

But according to Fulton, it’s not the only factor at play.

“The biggest obstacle is familiarity,” he says. “If you think about what slowed down the move to client-server, what slowed down the adoption to zero-client Web-based applications, it was the uncertainty.”

Still, the tide will turn and Canadian firms will start testing the waters in the public cloud within two years, Fulton predicts.

Current adoption of virtualization projects will provide firms with the experience of a cloud-based approach and help build confidence.

His views echo those of his CEO.

Bill McCracken has been at the helm at CA since January and under his steering, the software vendor has made a big bet that cloud computing is more than just a buzz word.

“I think it’s going to grow faster than any of us believe,” McCracken says, responding when asked where cloud computing will be in five years. “New firms adopt new technologies faster than old companies do. Once they do, that starts to shift the industry … the ones that don’t shift are uncompetitive.”

CA has acquired five companies over the past six months in a bid to arm itself with top-notch cloud management capabilities. Those companies include Nimsoft, 3tera, Cassatt, Oblicore and NetQoS Inc. But CA may not be done yet, the CEO hinted.

“There’s advantages for companies to merge,” he says. “We are hiring companies that fit directly into our strategy and give us unique capability.”

CA still sees about 60 per cent of its revenue come from mainframe software clients they are supporting, says Nancy Cooper, chief financial officer. But the growth of that business is slowing and other models of software delivery are on the rise — in the high, single digit growth rate.

The cloud may be ambiguous and hard to define, Fulton says. But CA still wants to be the software vendor that is known for managing it.

“If you think about ‘cloud’, nothing could be more ambiguous and lofty and intangible,” he says. “We want to facilitate the cloud. We want to be the company others look to manage and secure it.”

Companies will be driven to the cloud when they want to further optimize their IT department, Fulton adds. Computing will increasingly be though of like a utility that is turned on when it’s needed, and turned off when it’s not.

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