Why an irrational fear of cloud computing could harm UK manufacturing: David Richards

That chance encounter revealed something very concerning. Despite the many obvious and very well-proven advantages, some industries continue to resist adopting cloud technology. My first experience of the emerging “cloud computing” movement was at Silicon Valley conferences in the mid-2000s. Initially, I was puzzled by Amazon’s presence among pioneering technology firms. Why was an online bookseller appearing alongside cutting-edge tech innovators?

The answer soon became clear: Amazon was quietly building Amazon Web Services (AWS), destined to become one of the most influential technology companies in history, reshaping the global technology landscape and enabling breakthroughs in artificial intelligence. Amazon had originally built enormous computing and storage capacities primarily to handle peak demand during the Christmas period. Realising this expensive infrastructure lay idle much of the year, AWS began offering it to universities and research institutions. Previously, academics had to buy costly hardware that quickly became obsolete when their research was complete. AWS changed everything, democratising computing resources and reshaping innovation.

In the late 1990s, half of the venture funding at my new start-up vanished immediately on hardware. Today, I can summon 2,000 high-powered computers from my phone for an hour for just a few pounds. Startups can now invest modest sums for immense computing power, enabling them to rapidly build and test without spending millions on hardware. Most don’t even have what we used to call a “machine room”. Many British manufacturers are still not using cloud, often it seems due to a misunderstanding of the term "public cloud”. The term emerged to differentiate shared cloud infrastructure from private, company-owned data centres. It does not mean public access. Many manufacturers mistakenly fear their data will become publicly accessible, which is simply not the case.

Security concerns against cloud adoption lack foundation. Do companies genuinely believe they possess the vast resources and specialist skills in security, failover management, and threat detection that major cloud providers offer? I’ve sat in the control centre of one of the largest cloud providers and watched a specialised team snuff out attempted hacks before they even started. Leading providers handle trillions of secure transactions daily, rarely suffering breaches. Conversely, traditional sectors such as banking and manufacturing frequently experience security incidents. Financial services alone reported a 47 per cent increase in cyber-attacks between 2022 and 2023, underlining vulnerabilities in outdated systems. Even America’s CIA, one of the most secretive and security focused organisations in the world, confidently adopted cloud technology over a decade ago, awarding AWS a $600m contract in 2013. It makes the reluctance of manufacturers to trust cloud infrastructure with their data seem not just misplaced, but utterly illogical. We must move past outdated and plain wrong views and rely on evidence to evaluate the benefits of cloud computing. This evolution offers British manufacturing the opportunity to reclaim technological pre-eminence.

David Richards is a leading technology entrepreneur