While companies are increasingly making use of cloud computing for their accounting software and other applications, theyre not completely ditching their enterprise resource planning software either.
That was one of the messages at a luncheon presentation in New York on Tuesday by PricewaterhouseCoopers Advisory practice. Some PwC clients are combining their ERP systems with cloud computing, unwilling to completely give up control of their data, even if it means they end up hoarding years of outdated information.
Virtually every company we come across today is somewhere along that journey with the cloud, said PwC Advisory partner Phil Garland, the firms National CIO Advisory Solutions Leader.
In some cases, companies are using a kind of hybrid cloud. Jacqueline Olynyk, who leads the SAP consulting practice, noted that SAP now has ways to integrate with cloud computing systems like Salesforce.com. She likened the strategy to opening up the kimono.
However, companies still have concerns about the security of cloud computing. Blake White, a director in PwCs Advisory practice who focuses on the entertainment, media and communications industries, sees concerns in areas like digital rights management, especially as new technology platforms constantly emerge like Apples iPhone 3G and the new iPad. Entertainment and media companies are still struggling to maintain control of their content as it flows across YouTube and the rest of the Internet, while Apple too finds itself hustling to keep its latest prototypes from accidentally getting left behind at the local tavern.
PwC has been rebuilding its technology consulting business in recent years after selling it to IBM in 2002 for $3.5 billion. That was during a period when the major accounting firms were spinning off their tech consulting businesses to avoid conflicts of interest and further Sarbanes-Oxley-like regulation. Garland and many of the other consultants have now joined the firm after PwC acquired BearingPoints North American Commercial Services business last year for $44 million. BearingPoint used to be KPMGs consulting unit, but parts of it now belong to PwC and Deloitte. PwC has also bought smaller consultancies in specialty areas like identity management in the past year, bulking up just as tech spending finally appears to be ramping once again as the economic recovery slowly picks up speed.
However, the PwC consultants said that clients are still being very cautious about their spending, and many still find their budgets are severely constrained. Cloud computing can certainly be a less expensive investment than a full ERP implementation, but companies nevertheless have to spend money to use many of the applications right now. Unfortunately, not a lot of them are willing to open their wallets just yet.
