By Graham Croock, Director: IT audit, risk and cyber lab at BDO SA

The world is getting smaller, and technology has a lot to do with this. As technology converges, we are seeing fascinating trends in data storage across the globe. “This convergence is leading to a state where we’ll be able to effectively have data centres on the cloud. In the past, we had huge local data centres and powerful servers in buildings and offices,” explains Graham Croock, Director: IT audit, risk and cyber lab at BDO SA. “But we are now moving towards centralised data centres.” All of this means that within the next 5 to 20 years, our data centres will be distributed across the world. By 2025, 70% of the world’s processing servers will be in the cloud – looking at the larger organisations such as airlines, banks, insurance companies and trading services. 

Essentially, the power of computing is moving to the cloud. You don’t need a powerful, clunky machine anymore because data is being accessed through even more powerful infrastructure built around the incredible processing power that now exists on the cloud.

This phenomena is leading to a growing focus in communication infrastructure, compelling people to acquire fibre and high speed Wi-Fi installed in their workspaces and homes. Companies will essentially be paying rent to host their data on cloud servers, the biggest right now being Google and Amazon.

This has major implications on business. Board members, CIOs and business leaders are resisting the move to cloud storage (although not for long). There are a variety of potential issues that raise concerns about moving their data to the cloud. “In today’s business world, companies control risk by understanding who the people are that have access to their data. Now we’re handing over critical data to a service provider that we don’t know, with the hope that they manage the risk on their side,” adds Croock.

For business leaders to be convinced that their critical data is safe, they need to see the environment that it is held in, whether it be within their own walls or with a trusted outsourced partner that they know. “The issue now is that cloud service providers cannot show us the environment that data is in. Businesses want guarantees that their cloud service provider cannot, for example, be targeted by terrorist groups or rival organisations. There is also concern that if the service providers miss something on the infrastructure side, it could cost their businesses billions of dollars,” explains Croock.

So how do we deal with disaster recovery if cybercriminals attacked or shut down one of the big data centre servers that house companies’ invaluable data? How do companies know if they have efficient redundancy built into the business? This is a tricky one, but “businesses need to relook their disaster recovery protocols and planning, because eventually we will have to move away from having control,” states Croock. 

Cost implications is another aspect of moving data to the cloud that companies need to consider. Although desktop managers and support are unlikely to be affected, hardware specialists will no longer be needed, saving companies labour costs. This is the concept of economies of scale. But on the other side of the coin, more data and analytics experts will be needed in data centres, as well as infrastructure optimisation specialists who manage the data centre’s efficiencies. This in turn has interesting implications for the job market, where there is now a demand for data engineers and data scientists. Changing the way we invest in skills and technology will change. 

The concept of Moore’s law comes into play. The law states that the number of transistors per square inch on integrated circuits has doubled every year since their invention, meaning that processing power doubles every year. Moore's law predicts that this trend will continue into the conceivable future. And if companies don’t keep up, they will be left behind by their competitors. Companies need to cover all their bases when looking to migrate their data onto the cloud, firms like BDO that specialise in IT risk should be approached to assist organisations in mitigating risks when taking the leap from the ground to the cloud.