A Measurement of Trust and Confidence in the Cloud

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A recent Gartner study predicts double-digit growth in all cloud sectors, reaching a total spend of $210 billion dollars by 2016. But as enterprise organizations continue to investigate the benefits to moving data and application management to third party cloud service providers, concern for data security and privacy remains the primary reason for a pause to full implementation. According to a 2014 global study from BT, data security and trust in cloud-based services is a cause for unease among IT decision makers within large organizations.  Almost half of respondents admitted that they are “very or extremely anxious” about the security implications surrounding the cloud. The question many IT decision makers are asking is; When relying on a cloud provider, how do you know what security protocols are in place and how well are they performing? As is the case with all partnerships, trust is paramount to a relationships success.

Prof. Edward Humphreys, Convenor of the ISO working group is responsible for information security management standards including ISO/IEC 27001, ISO/IEC 27002 and the cloud security standard ISO/IEC 27017. He believes that creating a climate of trust is the most important prerequisite when outsourcing IT. “Companies need to have assurance in the underlying cloud provider,’ Humphreys says,  “Many users may not understand that they need to select a cloud service provider that has good governance over the processing of personal data; and those that do know this may have difficulty knowing how to verify that good governance is in place. This situation can lead to increased risks for the protection of personal data.”  ISO/IEC 27018:2014 establishes commonly accepted control objectives, controls and guidelines for implementing measures to protect Personally Identifiable Information (PII) in accordance with the privacy principles for the public cloud computing environment.

Microsoft has announced that it is the first major cloud provider to adopt the first international cloud privacy standard developed by the International Organization for Standardization (ISO). Independent auditors at the British Standards Institute (BSI) have verified that Microsoft Azure, Office 365 and Dynamics CRM Online are all in compliance with the standard. “Adherence to ISO 27018 provides a number of important security safeguards,” said Microsoft executive vice president and general counsel Brad Smith, “It ensures that there are defined restrictions on how we handle personally identifiable information, including restrictions on its transmission over public networks, storage on transportable media and proper processes for data recovery and restoration efforts. In addition, the standard ensures that all of the people, including our own employees, who
process personally identifiable information, must be subject to a confidentiality obligation. The validation that we’ve adopted this standard is further evidence of our commitment to protect the privacy of our customers online.”

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Is the Cloud about to Run Microsoft Aground?

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Marketers are facing a similar circumstance whether selling service based offerings or the latest product.  The storyline goes something like this; long standing market leader sees dominance in market challenged by new technology and competitors that under-cuts the existing marketers position, future profitability, viability and industry relevance.

Microsoft Corporation, not all that long ago, was the target of anti-trust legislation to curb what legislative proponents argued was unfair business tactics that limited competitor’s access to the huge business and personal software market that much of the computing world used to access the world of digital technology. Today the giant’s software sales market position is beginning to shrink as corporations and large organizations move their in-house computing functions out to the cloud. The migration has Microsoft initiating a shift from the old model of selling software to companies to install on their own computers to a cloud-based model where customers pay a regular subscription to share use of centralized computing servers. The course correction is generally viewed as a positive move for Microsoft but the transition to cloud based services is proving to be a bumpy ride for the behemoth.

Shares of the world’s largest software company fell more than 4 per cent after the company management forecast a drop in commercial licensing sales for the most recent past quarter. Microsoft’s cloud-based services revenue failed to make up for the loss over the same period. “The rotation from license to subscription is going to have pain points and they are starting to show,” said Colin Gillis, an analyst at BGC Partners.

Microsoft’s Chief Financial Officer, Amy Hood, expects sales from commercial licensing, which covers Windows, Office and server products for businesses, to be around $9.7 billion to $9.9 billion in the current quarter, a sequential dip from the $10.7 billion it reported for the last quarter, meanwhile Microsoft is forecasting only a modest growth in its emerging cloud-based businesses. “We view this softer guide as another indication of the near-term pain for long-term gain that CEO Satya Nadella and Microsoft must undergo as they make this cloud transition,” said Daniel Ives, an analyst at FBR Capital Markets.

Today the cloud market has many players but the market leader, Amazon, is writing the manual on how to take a lead and pull away from everyone else. If Amazon’s entire public cloud were a single computer, it would have five times more capacity than those of its next biggest 14 competitors, including second place Google, combined. Every day, one-third of those who use the internet will visit a site or use a cloud service that is running on Amazon’s cloud. It is doubtful, even just a few years ago, that the executive suite at Microsoft would have anticipated that their industry position would be diluted by the likes of Amazon and Google but the persistent and methodical advance of technology has a way of making once mega market players ill relevant. Can you say Kodak?

The market for cloud services is expected to grow considerably as concerns about security, integration challenges and information governance issues are adequately addressed. Small and mid-sized organizations are just now beginning to identify how cloud computing can benefit their operations and 56% of all enterprises are still identifying IT operations that may be candidates for future cloud hosting. The size of the cloud space will continue to grow for all competitors but in a computing service segment that sees market front runners navigating the space with the agility of jet skis a battleship like Microsoft will likely continue to struggle as it maneuvers deliberately among the competition.  As it continues to implement the change in course Microsoft may find itself running aground more often as it charts its new direction.

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Colleges are Innovating to Connect Graduates with Prospective Employers

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Soon a new flock of college students will be facing the end of their educational experience and embark upon a journey to secure a job or a career of their choosing. Most, given the recent record of unemployed educated classes, are facing the challenge with more than just a little trepidation and uncertainty. Having spent significant sums of money, time and effort to acquire an opportunity at a job and career that repays them for their efforts and expense of acquiring a degree, many are feeling less that optimistic about their career prospects.

But the National Association of Colleges and Employers (NACE) 2015 Job Outlook Survey is providing some encouraging news for the class of 2015. According to the results of the survey, employers expect to hire 8.3 percent more new college graduates from the Class of 2015 for their U.S. operations than they did from the Class of 2014. Citing company growth and attrition, caused by retirements, as the main drivers behind the increased hiring employers are expecting to increase the number of new college graduates they bring on board. Most of the renewed interest is for new college graduates at the bachelor’s degree level in the business, engineering, and computer information sciences field. Among individual majors; finance, accounting, and computer science graduates are most sought-after by survey respondents. Approximately 36 percent of employers say they will hire more full-time, permanent staff in 2015, up 12 percentage points from 2014 and the best hiring outlook since 2006. With only 17 percent of May 2014 grads having jobs at graduation last year, connecting eager graduates with employers remains a challenging tasks for both sides of the hiring equation.

Large employers continue to dominate on-campus recruiting, seeking to connect to STEM students who are in the top 10 percent of their class with mostly liberal arts majors. However, small and medium-sized employers are driving the majority of the increased job growth. According to ADP’s monthly employment reports, nearly 75 percent of all new jobs filled in 2014 have been with companies of 500 employees or less. But due to the cost of on-campus recruiting these employers don’t interview on campus, making successful student/employer connections more challenging. Robert J. LaBombard, the CEO for GradStaff, Inc., says graduates miss out on opportunities because smaller companies don’t have the resources to recruit on campus, and college career counseling hasn’t kept up with an evolving job market.

The entry-level job market has changed in recent years but colleges have not adapted or kept pace with changes in the new grad job market. With many graduating seniors unprepared to find a job in a very competitive market, leading colleges and universities are reevaluating their efforts to provide effective career counseling and job search training to their graduating students and are looking to more innovative ways to bring the two wanting parties together.

One innovative approach to improve outreach to the small and midsized employer market is for colleges to partner, or outsource completely their job placement efforts, with experienced third party intermediaries who know how to identify students with desirable and transferable skills and who have the experience to connect them with hiring companies. With the right strategies, educators can position themselves to more positively impact the efforts of their job-seeking graduates.

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Moving the Help Desk IT Function Back On-Shore and in the Neighborhood

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The help desk function is a people-intensive operation that has been a target for efficiency and cost cutting in small to large organizations for years. Comprising nearly 10 percent of the typical IT staff, the functions are often seen as a prime target for commoditization and ripe for third party outsourcing. In the past many companies jumped on the cost-cutting, outsourcing band wagon and eliminated internal IT help desk services altogether in favor of off-shore resources. But recently many organizations are reevaluating the practice of moving their help desk staffs over-seas due to concerns for service quality, data security and industry specific compliance requirements such as; healthcare, accounting and finance organizations that face significant financial penalties for failing to meet regulatory and information proprietary handling standards.

Initially offshoring of repetitive IT functions was seen as an opportunity to take advantage of lower hourly rates for employees who performed repetitive and routine help desk functions.  Soon it was discovered that lower up-front costs didn’t always translate into lower, more effective cost at delivery and the level of experience that off-shore help desk talent suffered in comparison to domestically outsourced services or retaining in-house staffs.

Some of the most dramatic challenges are based on understanding specific markets and cultural differences. Liz Herbert, principal analyst at Forrester Research says, “If Walmart is outsourcing a business process to a service provider in Kansas, they don’t have to train them on how Walmart operates.  I’ve been to labs in India where they have to explain what a Walmart is and why people go there.”

Most societies around the world have demonstrated advanced proficiencies in understanding and speaking second languages than the vast majority of Americans. But many English speaking-only American consumers, who sought help in a time of technical need, discovered that understanding the English spoken in a foreign land was considerably more difficult to comprehend than that which is spoken and understood in the land of the languages origin. Companies soon experienced an increase in frustrated consumers who were unable to receive the level of service they expected. In addition, political uncertainty abroad, rising wages, difficulties of overseas travel, and time zone differences are motivating many company executives to rethink their help desk service strategy.

The off-shore model is quickly giving way to increased interest in “domestic sourcing”; small, lower-cost rural, urban, and semi-urban IT services firms located in the United States and Canada. These firms can offer outsourcing contracts that are priced based on business outcomes rather than number of calls filled, which result in not only lower costs but improved customer service quality. Determining the best and most cost effective approach is always dependent on evaluating the needs and goals of the individual industry and company but, for many, bringing the help desk IT functions back home and keeping them in the neighborhood is proving to be a winning strategy.

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