Cloud computing has been on the agenda of technology conferences for years.
The concept is relatively simple. Instead of buying racks of servers on which to store information, businesses - and perhaps individuals - rent storage space in the "cloud" of servers provided by another company, such as Microsoft of HP.
If you have Hotmail, Gmail or Yahoo email address, you already have your personal data stored on the cloud somewhere. Even if you use a Blackberry, your information is stored overseas.
The main question being asked recently is why more businesses are not using cloud computing instead of using their own servers and employing an IT department to manage those servers and data storage.
The big driver for change could be coming as soon as September, Microsoft New Zealand general manager Paul Muckleston says.
Addressing a Cloud Summit in Auckland recently, Mr Muckleston said the concept of cloud computing was changing the physical requirements of IT.
The Government was switching to cloud storage in September with the Department of Internal Affairs given the mandate to have 70% of government services "in the cloud" within five years.
There were 70 similar sorts of government edicts around the world but only five as advanced as the New Zealand Government's, he said.
The deal had been signed off by Finance Minister Bill English and came after the rapid increase in the size of government departments.
"Chief information officers will need to explain why they won't adopt the cloud rather than why they should," Mr Muckleston said.
The Government spent about $2 billion a year on information and computer technology and with more than 160 chief information officers, there was a lot of duplication, he said.
"There is universal agreement they need to drive inefficiencies out of the $2 billion."
The Government had specified that winning tenders would be based in New Zealand, there would be two suppliers of cloud services and each supplier must have two cloud sites.
There were some challenges for businesses as technology continued to evolve.
Mr Muckleston presented data which showed that 50% of business devices were expected to be smartphones by 2014, 84% of organisations had a remote workforce, 85% of data centre capacity was idle on average, and 70% of IT budgets were spent on maintaining data centres.
Cloud computing would mean major changes for organisations because they would only pay for the storage they used, they could immediately get access to more storage during peak demand, and their IT budgets would be reduced, he said.
There had been a slow take-up of cloud computing in New Zealand and there was no "big list" of New Zealand-branded companies lining up to use public servers.
"New Zealand Post is using Google's cloud service but I can't rattle off a list of 10."
Storing data off-site did not worry small to medium-sized enterprises (SMEs) as much as it did larger enterprises, Mr Muckleston said.
Gartner principal analyst Errol Rasit coined the EGO problem for cloud computing.
When asking the more than 200 attending the conference who had attended a cloud computing seminar in the past few years, nearly all put up their hands.
People had talked about it so much but nothing much had happened, hence the "eyes glazing over", he said.
One of the main savings for businesses using cloud computing was in human resources with less demand for staff to run data storage systems.
The onus was on IT staff to save money, whiled for chief information officers the biggest issue to tackle this year was cloud computing, according to research released by Gartner.
Last year, it was the second most pressing issue.
"The promise of the cloud being cost savings is prevalent in their minds."
The benefits included that cloud computing was server-based, it was on-demand and users could add or remove resources as required, there was a shared pool of resources and you only paid for what you used.
Different departments in the same organisation would use the shared resource and levels of access could be allocated to staff with different seniority, Mr Rasit said.
One of the concerns for companies was having their data stored overseas, he said.
But when attendees held up their Blackberry devices, they seemed comfortable with the fact the data was held in Canada, and in some cases the United States, and was subject to the legal protections in both those countries.
IT staff would also have to manage using the resource rather than the provider telling a company it was not using the resource it was paying for.
That meant a different set of skills had to be developed by IT staff.
The IT role would be to govern and administer the cloud, a change from simple administration in a data service to administration within a public server.
That would mean a smaller number of administration staff with skills much less replicated - a smaller number of specialised IT people.
In a later interview, Mr Rasit said cloud computing was an evolutionary step in terms of data centres.
It was important to recognise that while the role of IT departments would change, their roles should not be marginalised.
IT still had an important role as governors and advisers.
If a client wanted a new service from a supplier, and it might take two weeks to implement, the IT staff had to find the best way to provide the service as soon as possible, even if that meant using a cloud service until its own service was running.
IT staff had to ensure the cloud server could provide all of the security and flexibility required, he said.
The charge-back model of the cloud gave a new understanding to the costs of data collection and storage.
Currently, a lot of organisations did not have that visibility.
The data centre was part of the infrastructure.
With the cloud, a chief executive could see how much money was being spent on data services rather than on maintaining hardware.
However, while having fewer servers would save money, software costs could be more because of licensing.
Capital expenditure would go down but operating expenditure would increase, Mr Rasit said.
One example of a cost-saving would be a company's email service which was critical but very expensive.
With a cloud service, a new email account could be set up without difficulty - similar to a Hotmail account.
While most of the interview with Mr Rasit involved the security provided for clients by cloud providers, the Otago Daily Times asked how much monitoring the providers did on the information stored on their servers.
Was it possible, for instance, for a terrorist organisation or a group of pornographers, to use the cloud provider's servers to store information that could be illegal? All that was needed was a credit card, to gain instant access to the cloud.
Access could be then gained from internet cafes anywhere in the world.
Mr Rasit replied that it was a "random question".
There was a code of conduct governing the use of the cloud but providers did not monitor usage closely unless there was a complaint, such as in the WikiLeaks case, or there was a legal requirement to provide data stored on the servers.
Once governments complained about WikiLeaks, access to servers was denied, he said.
