This week: Economic uncertainty, Security and the Cloud

The main news of the past week in the UK has been the Comprehensive Spending Review (CSR) and the large cut backs in planned expenditure from the budgets of most Government Departments. The uncertainty around budgets and the shape of the organisations has led to a number of difficulties in the planning of business continuity activities, with a general recognition that this work needs to continue but at least some short term difficulties in arranging for planned work to progress.  In the short term this may be acceptable, however the uncertainty leading up to the CSR and continuing now will mean that many public sector bodies will have made little or no progress for some months.

Whilst debating the economic impact of the CSR is beyond the scope of this blog, it is clear that there are large scale economic shifts occurring around the Globe.  Most developed countries are seeking to quietly push down their currency value, the Governor of the Bank of England confirming as much last week, with the object of increasing exports to revive ailing economies.  It is equally obvious that this cannot work for everyone and there is a wide recognition that a "race to the bottom" will benefit nobody at all.  One effect of this is to create uncertainty in investors who are now seeking safer havens for their money, with currency, bonds and equities all producing low or uncertain yields we are seeing rising commodity prices as Gold and Silver start to look attractive.

Wide-scale disasters have also affected commodity prices, as Russia has banned Wheat exports following a dreadful summer and Pakistan has been deeply affected by the flooding.  

In addition to these events the US economy remains the largest in the world by a distance but continues to struggle as issues arise with the foreclosures where people have been unable to maintain their mortgage payments.  The scandal of selling inappropriate products to people who clearly would never be able to repay the money borrowed has now been added to, as mortgages have been sold on to new owners.  The mortgagee as often found it difficult to know who to repay the money to, and there are now people being threatened with being put out of their property even though they are able and willing to pay.  This may turn into nothing more than a short term issue, serious though it is for those caught up in it, but what is less clear is whether this turns out to be another systemic issue with uncertainty about who holds what debt and what the real situation with repayment actually is.

The UK announced a revised National Security Strategy which did not say much that was greatly different to the previous one, but it does place far greater emphasis on cyber attack than most people had previously appreciated.  The emergence of the Stuxnet worm designed to target industrial facilities confirmed that this is an emerging area of concern.

In IT, the Cloud remains the big talking point with Microsoft in particular pushing into this marketplace.  I see a great deal of writing about this emphasising the security hazards of the Cloud but little discussion of the profound failings of many organisations current provisions.  So whilst there are issues with moving into the Cloud let us not forget that many organisations continue to operate their IT in a less than professional way let alone a resilient or secure way.  To cite just a couple of examples:

• a client who lost most IT services, network and telephony owing to a power failure and was not able to restore services for 24 hours.  A Cloud data centre would not be expected to suffer such a problem;
• Cloud data centres generally provide basic good management for facilities, power, air conditioning and the like.  These are managed by professionals dedicated to the job.  Many organisations have server rooms which vary from the highly professional to the amateur - for instance UPS systems that no longer will support the kit, cables trailing across the floor and so on;
• Data Centres are secure environments with procedures to manage people who enter or leave the premises.  Many existing facilities are only partly secure and often key services are operated behind a locked door but that is the extent of the security provided;
• Cloud services are available to smaller organisations that will never be able to afford the secure, professional environment of a real data centre.

So whilst it is true that many people have highlighted security issues with the Cloud, one needs to compare this to the starting position of many organisations who are not IT professionals, do not understand the needs of IT and do not have the money to provide what is required.  In these cases the Cloud will be a massive step forward in improved resilience.

One last point about the Cloud.  Full exploitation of Cloud services requires sufficient bandwidth from where the workforce are accessing the information.  Sadly this excludes much of the UK where high bandwidth is only available in some parts of the Urban environment.  For many businesses in such remote places as, well, just outside London, they cannot get the bandwidth they need.  My local town has an industrial estate with the likes of Siemens Medical, Lucas and others - these are not small organisations - and bandwidth generally available there is not even the 2 Mbps that most think is the minimum needed.  At an event in Newmarket, this complaint was voiced by several people.  The UK is a long way from providing what is required and the big idea of the new Government is that private sector jobs will replace the 490,000 public sector jobs to be lost over the next 4 years.  This requires an expansion of our skilled high technology and knowledge based work but we will need the infrastructure to enable us to compete, otherwise the public sector workers will be stacking shelves in supermarkets rather than contributing to a growing export led private sector.