There has been a lot of buzz around the Cloud in the investment management world over the past few years. Reality is now settling in and issues such as security, vendor-lock-in and interoperability are becoming front of mind. CIOs have to start thinking about the business future outcomes now if they want to achieve the full value of the Cloud.

We are still in the embryonic days of the Cloud and very early on in the standards adoption process. Given the increasing need for many firms to comply with industry regulations, they often face issues with security, data classification, cross-platform reporting and back-end integration requirements that the Cloud just doesn’t cater for currently.

So what will the future look like? Cloud will certainly play a key role, as it’s simply the most cost effective approach and will continue to evolve. Furthermore, firms need to act now to lessen the risk of implementing services that are not correctly provisioned for their future needs. This may lead to difficulty scaling, vendor instability and poor security.

Highlighted below are the 5 top trends that are shaping the future and the potential pitfalls for firms to overcome when preparing a technology roadmap:

1. Standards: It’s unlikely that there will ever be one set of Cloud standards, as everyone’s needs are different and one size does not fit all. The launch of the European Cloud Partnership (ECP) is seen by many as the European Union trying to ‘define the undefinable’. The EU should help European organisations filter out the type of standards instead, rather than imposing a single standard.
2. Interoperability: The Open Data Center Alliance (ODCA) is working actively to create a future based on open, interoperable standards and facilitating the movement between compliant PaaS vendors. The main driver for banks is to find a measure of comfort to surround their investment. Are their hardware platforms (either in-house or in the public Cloud) future proof? What happens if they need to change software vendors at a later date?
3. Regulation: The government will undoubtedly influence the Cloud, mainly in the area of data security. Direct regulation will fail and ultimately the market will end up creating those standards in the same way as HTML 5 was developed.
4. Big Data: Cloud will make it easier for financial firms to deal with big data, as it provides  tremendous storage space and easy processing. They need to get to grips with the capabilities they have to handle vast amounts of data, being able to interpret this and conduct analysis in parallel to tight deadlines. Do they have the disk space and processing power to do this in-house? If they do, will these firms find themselves with huge amounts of spare capacity?
5. Elastic provision: The ability to elastically purchase capacity on demand is the most powerful element of Cloud provisioning. There is a high level of interdependence existing between meeting requirement needs and ensuring vendors are willing to accept the far lower predictability of licence revenues. Vendors are blocking moves, as they seek to protect revenues and avoid creating the complicated algorithms required to enable access to further capacity. This conflict needs to be resolved.

By predicting where Cloud is going and identifying mega trends in the industry, firms will not only avoid disruption, but harness it to meet new challenges and goals.