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Blogs > Banks Statement

Psychology of data ownership may be changing at last
Martin Banks By: Martin Banks, Proprietor, Lian-James Consultancy
Published: 17th November 2008
Copyright Lian-James Consultancy © 2008

The customer base of Edinburgh-based data centre hosting company, Scolocate, is starting to demonstrate what should be an important trend as interest in cloud computing ramps up. The psychological issue that currently faces many vendors of outsourced services such as SaaS and remote hosting—namely that potential customers are concerned about losing control and ownership of their data—at last seems to be dwindling.

Many of those customers are amongst the most naturally security conscious businesses and organisations around. Not only does it have some 25 communications carriers located in its 16,000 square foot facility, but it also hosts the Scottish Health Service, one of the two data centres run by the Scottish Police Force, several other Government Departments, and is now operating as the backbone of the Scottish Education Service.

The fact that with a remote service the user's data is not definably close at hand has been one of the stumbling blocks over which many have baulked when it came to considering using remote hosting services and SaaS. This is despite the fact that companies such as Scolocate can offer far greater levels of data security than those companies can normally provide for themselves, if only because that is core to its business proposition.

To some extent it is, perhaps, the very public losses of valuable, sensitive data that is at last driving businesses and Government departments to look at how the security of their data fits with the opposite requirement of making it readily available to those that need it. In this context, well-managed remote services may at last be seen as providing a better answer, if only because it provides the customers with one, definable, throat to choke.

In addition, it also allows them to provide more services to customers, such as capacity and availability management for example, together with expertise in operating systems management. Patch management in this area can be an issue for users even in a co-location environment and the cost-effectiveness of off-loading these non-core management issues is starting to show through. These are services that have to be undertaken, but can be a burden for many companies for they are not core to their business. But they are the core business for the likes of Scolocate.

Indeed, they are—or at least should be—capable of providing tasks that many customer businesses would prefer to avoid, such as backup management, business continuity, and disaster recovery. Having not only testable, but also fully tested plans for these steps—rather than just an untested, write-up of plans that fulfil an appropriate tick-box—is becoming increasingly important, and providing this is core to the likes of Scolocate.

Though the psychological mood is starting to change, it is still throwing up stumbling blocks. Users may be willing to let their data off premises, but many still like to be nearby. Most of Scolocate's UK-based customers, for example, come from the east coast of the Scottish lowlands rather than a wider geographic spread. Some of it is still obviously practical in nature, as some co-location users still provide their own support for their systems, and therefore do not want to travel too far when problems occur. But the suggestion that this is at least in part a psychological issue is evidenced by the fact that a good measure of Scolocate's business comes from overseas companies operating UK-based subsidiaries.

As these psychological trends pick up speed, the company should also be able to build on its ability to provide hosted backbone services to a wide range of small and medium-sized businesses, removing the need to build their own data centre services, with all that that entails. The backbone hosting side of the business is a good development of that core hosting/co-location business and is in discussion with the Scottish Enterprise Board about providing such a service for the Scottish software business, particularly the smaller start up operations.

Here, SaaS and backbone hosting services like Scolocate have a significant role to play in providing the agility needed to meet changing business requirements without the significant infrastructure investment, energy costs and real estate issues. In addition, the current economic situation plays to its capabilities, particularly in terms of exploiting data centre management expertise. For example, many server vendors quote energy consumption figures that, in practice, are rarely reached, so with good management consumption per rack can be a good deal lower than expected. In addition, experience shows that many systems can be run hotter than specified, requiring less air conditioning resources. Such management skills can reduce the cost burden for users even further.


Published by: IT Analysis Communications Ltd.
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