By Jennigay Coetzer – Business Day, 12 April 2011

Using standalone applications like sales force automation and accounting systems on a pay-per-use software as a service basis might raise trust issues on the basis that the data could be stored anywhere and it is difficult to audit what is happening to it.

But smaller companies may balance the risks against cost, says Greg Montjoie executive for cloud services at Internet Solutions. “Policies and procedures can be put in place to mitigate against the risks.”

He says some service providers will guaranty that data is encrypted and secure and the level of encryption that is used, and provide full audit reports of where the data is stored and who has access to it. Another approach to cloud computing is to rent IT infrastructure capacity from a service provider, who would then host their applications.

In this case the company would own its own software applications, the service provider would configure a server to run Windows and load the applications, and users would access them over a secure connection. Some companies will go for a hybrid model and only put applications in the cloud that do not result in losing control over confidential information and run those that do in-house.

But as the market matures, companies will become as comfortable with running their business applications in the cloud as they are now with internet banking, says Montjoie. “Companies do their banking online as a matter of course, despite all the publicity about the risks,” he says.

Jennigay Coetzer is a freelance business and technology journalist with 25 years experience, and she writes regularly for Business Day. She also runs media training and writing skills workshops, and is the author of A Perfect Press Release – or Not?, a guide to writing and distributing effective press releases, an electronic version of which can be downloaded free from her website: www.jennigay.co.za.

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