This continuous barrage of hype surrounding the cloud has left many business owners and executives scrambling to understand if and how the cloud fits into the IT strategy for their organization. In order to bypass the hype to make a well-informed business decision, there are a few key things you need to understand, namely; what the cloud is, how we got here, and the pros and cons of cloud based solutions.
“SAAS” (SOFTWARE AS A SERVICE) VS “THE CLOUD”.
So how did “The Cloud” enter into our everyday lexicon? It’s been a slow progression starting with time-sharing back in the 1960’s. Time-sharing allowed limited and expensive computing resources to be utilized by multiple individuals and organizations, greatly reducing the cost for each organization. With the expansion of the Internet, Application Service Providers (ASP) and Software as a Service (SaaS) eventually replaced time-sharing, but the premise was much the same.
Since the late 1990’s, SaaS has leveraged the growth and ubiquity of the Internet to grow into a $10 billion dollar industry. Despite it’s explosive growth, the industry still faced one major issue, no one outside the industry had any idea what SaaS meant and the term was seriously lacking in “sex appeal.” Somewhere along the way, some creative marketer decided that the term “cloud” had just enough ambiguous sex appeal to work better than SaaS, and it stuck.
BENEFITS OF CLOUD COMPUTING.
Cloud computing is generically used to describe anything running off-premise (not on site within an organization’s IT infrastructure). It allows an organization to shift away from a traditional capital expenditure (CAPEX) model, of on premise hardware and software and the expenses that go along with obtaining, installing, licensing, maintaining and supporting it, to an operating expense (OPEX) based model that affords economies of scale through an environment of shared infrastructure, hardware, software and services.
In layman’s terms, moving to the cloud means that you are no longer required to purchase expensive hardware and software that your organization would have to support and maintain. Rather, you can rent hardware and software from cloud providers on an as needed basis. Users of cloud-based solutions typically access business applications and data from web browsers and/or mobile applications, which cangreatly reduce upfront investments as well as total cost of ownership (TCO).
Moving to the cloud also offers the potential to shed the management and expense associated with relatively low value-add processes surrounding software maintenance, server management, user support, and the painstaking firefighting that inevitably comes with it. Cloud computing may allow organizations to reallocate difficult to find and expensive IT talent to work on high-hanging improvement and growth opportunities. An assessment of where your IT team is spending their time as well as the opportunity cost of on-premise support should be factored into your organization’s evaluation of cloud based solutions.
Many of the largest software vendors such as Oracle, IBM and Microsoft, as well as Internet companies like Amazon and Google, are now in the game with very robust, stable and secure cloud platforms. In some instances, these platforms compete with their own products. For example, Microsoft still sells traditional Office and SharePoint software, or you can use their Office 365 and SharePoint Online cloud products for a monthly fee based on number of users.
RISKS OF MOVING TO THE CLOUD.
Despite the benefits described above, and the fact that cloud computing is now mature enough to host mission critical business applications, there are some cons, the most frequently cited being security. Rarely does a day go by without a new story of a company whose systems have been breached. While a strong case can be made that cloud providers can offer a more secure environment than you can on-premise, they also provide a much larger and more attractive target to hackers. Why attack a single organization when you can hack a cloud provider and potentially access hundreds or thousands of organizations? Security should be a key driver in any and all IT decisions; your reputation and your business may depend on it.
Other key factors that should be carefully evaluated before jumping into the cloud include reliability, stability, availability, compliance, control, and intellectual property. If you choose the wrong provider, you could experience unacceptable down time and unreliability. Even the big players such as Microsoft and Google have had outages, which may only cause a minor inconvenience for a corporate knowledgebase hosted in the cloud, but might put you out of business if your ERP system is offline for several days, or if the system can’t be reliably restored after an outage. While outages do occur with on-premise systems, an outage with cloud based systems leaves you at the vendor’s mercy.
Ownership of intellectual property is another important factor. If you use cloud based software applications that your organization doesn’t own, who owns the data? Even if you own the data, it may be difficult and costly to extract your data out of a proprietary cloud solution in a timely fashion. Finally, it’s important to consider what might happen if the vendor suddenly goes out of business? Again, you may find yourself at the mercy of an uncooperative or bankrupt vendor.
Finally, you should understand how much control your team will have over the cloud environment. Unlike on-premise systems where you ultimately have complete control over the hardware and software, cloud based solutions may limit your control, restrict your access, and create barriers that may be difficult or impossible to overcome when integrating with existing systems and processes. If you have complex systems and processes that are tightly coupled, understanding your control over the environment will be very important.
Fortunately, cloud computing is not an all or nothing proposition where you have to keep everything on-premise or move everything to the cloud. The smart money is on evaluating your systems and processes individually to determine which systems are low-risk and potentially ripe for a move to the cloud, while other sensitive, mission-critical systems may need to stay on-premise. For those that stay on-premise, you may elect to utilize a private cloud.
CHOOSING BETWEEN A PUBLIC OR PRIVATE CLOUD.
A private cloud provides many of the benefits of public cloud computing such as rapid scalability, extensibility and cost reduction while reducing the risks of the moving to the cloud because it’s implemented on-premise behind the corporate firewall and safely under the control of your IT team. For many organizations, this is an idea whose time has come. Gartner found that 75% of respondents to their poll plan to pursue a private cloud strategy in 2014.
The bottom line is that no one-size-fits-all solution exists; each organization should weigh the pros and cons of cloud computing against their specific needs and constraints to determine if an on-premise, private cloud, public cloud or some combination of all of the above approaches makes the most business sense.
The following questions will help you decide if the public cloud is right for your organization when talking to cloud vendors:
- How long have you been in business?
- Can you provide references?
- What is your up-time percentage?
- Where are your data centers?
- What is your backup policy?
- What is your disaster recovery policy?
- What is your service level agreement?
- Do you have liability insurance?
- Who owns the data?
- Will my data be used for data mining purposes?
- Will my data be aggregated with other data or shared in anyway?
- If I choose to quit your service, how can I get my data?
- Will there be any additional costs to get my data?
- How much control will I have over the cloud environment?
- What is your security policy?
- Have you had any known security breaches?
- What is your policy in the event of a security breach?
- How quickly can I add resources if needed?
- Can I commission new resources when they are needed, and decommission them when they are not, and how does that affect my pricing?
- What is my total price and what factors can increase the cost?
If you have additional questions or need help to determine if the cloud is right for you, call us today at 513.381.7200!