Jesper Nielsen, Director of Technology & Enterprise Application at Deloitte Luxembourg.

Despite cloud computing being a tried-and-tested source of extremely stable, secure and flexible server capacity and applications, take-up has been relatively slow in Luxembourg. CSSF regulations make this a readily available option, so how to get started?

“According to current trends and industry knowledge, 80% of IT infrastructure will be on the cloud within 10 years, so it makes sense to embrace this technology and learn how to use it,” was the stark assessment from Jesper Nielsen, Director of Technology & Enterprise Application at Deloitte Luxembourg.

Until now, businesses in the Grand Duchy have been dipping their toes into this movement. This is understandable, as Luxembourg trades on its reputation as a reliable business hub, which means local decision-makers have been wary before embracing this revolutionary technology. Not least of their concerns have been questions around security and the potential for data breaches.

“Its proponents claim that there is nothing more stable and secure than the cloud,” said Mr Nielsen. Providers such as Amazon, Google, Microsoft and others deploy sophisticated tools, sometimes driven by AI, that are at the cutting edge of data science and thus ensure the highest levels of performance. “These firms make investments which are beyond the budget of almost all organisations deploying on-premises servers,” he added.

The term ‘cloud computing’ covers a vast range of options. They go from ‘infrastructure as a service’ (offering raw server capacity), through to ‘software as a service’, both of which allow access to capabilities when and if required. Between these are ‘platform as a service’ options, which generally include operating systems and application capabilities. Clouds can be private (operated by niche players) or public (such as from the big global tech firms). From this palette of options, each individual organisation can meet its unique needs.

Software as a service has been the most popular option in Luxembourg so far, used for applications such as Salesforce (for CRM) or ServiceNow (an IT service management tool). However, Mr Nielsen recommends that businesses should move away from this piecemeal approach. “Organisations need to think pro-actively and ambitiously about how they can better deploy cloud-based options,” he said.

Cost is of course a major factor, and this varies with every case. For example, if a service only needs to be run at the end of the month then it might not be economic to have a sophisticated system sitting idle on premises. For larger, on-going solutions, the cost may be similar or more expensive in terms of the bill for storage capacity. However, one must also factor in the added services that come with the cloud: flexibility, added security, greater stability, pre-set structures, the latest software updates, and more.

CSSF Circular 19/714 published on 27 March 2019 has just clarified and expanded regulations initially laid down in circular 17/654; the rules, which initially paved the way for Luxembourg-based financial services players to embrace the cloud. “My initial advice to organisations, is to embrace this technology, find some potential best cases for cloud migration, start experimenting to see how it could suit your way of working, and thus learn how to use it,” said Mr Nielsen.