Cloud computing scuds back into sky over CeBIT (Feature)

By Renate Grimming Mar 2, 2011, 2:06 GMT

Hanover, Germany - If you use webmail, post on Facebook and upload photos to Flickr, you are already using cloud computing, the style of data processing that is in focus at this year's CeBIT trade show.

CeBIT opened its doors in Hanover, Germany on Tuesday morning for a five-day run with tens of thousands of business visitors expected. The dominant message: cloud computing can help businesses save money.

Consumers are estimated to spend 1.6 billion euros (2.2 billion dollars) annually on cloud computing. Including business customers, the sector is expected to have global revenues of 3.5 billion euros this year, a rise of 55 per cent from last year.

With that kind of growth, cloud computing is the buzzword in Hanover. Applications and services which can be accessed via a web browser, without having to install any software in the customer's home or office, are likely to be top sellers.

They especially save money for companies because they solve a capacity problem in businesses which have to deal with slower and busier periods.

When business is going well, the services and infrastructure are available out on the web. When business is quiet, the outlays are minimal because the company does not have to lock up capital in maintaining its own powerful servers.

A chief information technology officer who advises his employer to go the cloud computing way may be putting his IT technicians and system administrators out of a job.

The move does shrink IT departments, agrees Bastian Stein, technical director of the web lab run by German computing magazine Chip. The system administrators, who run the servers, need retraining and to adopt a completely different approach.

Microsoft is one of the software companies that have hooked onto the trend and aims to set the pace in cloud computing.

This may seem surprising, since it achieved greatness as a maker of operating systems for PCs and servers which the customer must buy, install and maintain. Windows and Microsoft Office continue to be 'cash cows' that the company milks for vast revenues.

But little noticed by the general public, Microsoft long ago established a big presence in web services, the cloud variation.

'Cloud computing is a game changer, a source of impulse for the whole economy,' said Ralph Haupter, chief of Microsoft Germany, in Hanover as the week began. As he sees it, cloud computing also means societal change.

'Cloud services are the key to solving many of our social challenges, such as coping with demographic change, improving health care and making public administrations more open and efficient,' he said.

At CeBIT, Microsoft has an exhibit publicizing its 'German Opportunities' programme. It has pledged support to 30 projects that will each develop innovative solutions based on cloud technology.

'We have expectations of making Germany the leading cloud nation in Europe,' Haupter said.

Germans themselves are not so sure. A survey by TNS Infratest this week showed a majority thought their nation was not particularly innovation-friendly. And in cloud computing, none of the leaders are German based.

The front runners are IBM, Amazon, Google, Microsoft and Salesforce.com.

Another limiting factor is fear in Germany that Big Brother is watching.

Buyers worry that data stored offsite might be seen by prying eyes. It makes them nervous that they do not even know for sure where it is stored. Putting data in the 'cloud' means just that: shifting it somewhere indeterminate in a vast web of connected computers.

If the data is lost, vast amounts of money might be lost, but would the cloud company pay?

Vendors say the Germans are a particularly hard sell on these issues.

Christian Kirsch, who edits a German computer magazine, iX, says such criticism tends to be ignorant of the facts. 'Acceptance of the cloud is limited by the lack of education about the data security,' he said.

The cloud is secure, thanks to existing encryption technology.

Robert Horndasch of consultants Deloitte said 50 per cent of German companies were certain they would continue to run their own servers, believing they were more in control and could manage the data best themselves.

August-Wilhelm Scheer, president of the German digital industry federation Bitkom, which sponsors CeBIT, suggested in Hanover the Germans should make a virtue out of necessity and offer the world's most secure cloud computing solutions.

But he cautioned that a Germany-only set of standards would be fatal to exports. The Germans must fit in with internationally-agreed standards of data security, he urged.

Read more about Business

Read more about Germany Technology