Cloud Computing – is switching worthwhile?

What’s the cloud?

A commonly cited first definition comes from the American National Institute of Standards and Technology:
“Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”
We will now take a closer look at exactly those services which by far exceed free-of-charge services like Dropbox or Windows Live Skydrive and are aimed specifically at businesses.

Which services does the cloud offer?

A lot of the things you have running on your own PC or in your internal company network can now be put “into the cloud”. Especially computationally intensive processes or services using a lot of disc space, like software development, download services and CRM-programmes (customer relationship management) are prime candidates for outsourcing.

The definition differentiates between these basic types of service:

• IaaS – Infrastructure as a Service

With this service, you are provided only with computing capacity and the necessary storage space. Your company IT department needs to take care of setting up and taking care of everything. With IaaS, your assets are not spent on quickly outdated hardware. Just like with a rental car you get the capacity and don’t need to worry about writing it off, physical maintenance and the most current technology.

• PaaS – Platform as a Service

Besides storage space and computing power, the customer is provided with a runtime environment like Java or .NET. This type of Cloud Service is mainly useful for software developing companies.

• SaaS – Software as a Service

SaaS is the all-inclusive solution which takes care of all your software needs depending on the provider.
Cost for software updates and upgrades don’t apply, possible incompatibilities between software and hardware used are irrelevant – the cloud service provider has to take care of all of this. This way, you are always up to date, without investing any time and money into installing updates.
If you need certain software licenses only for a short time, you will pay only for this time instead of the total license price the software manufacturers ask for.
Usually, you get a provider-specific user interface, which means the desktop will look different from the one you’re used to on your local PC.

• DaaS – Desktop as a Service

Besides the three classic distinctions, there are also cloud services as a further development of SaaS. With desktop virtualization you can just log into the cloud via your browser and get a user interface which is very similar to the one you have on your own desktop. Providers offering DaaS are for example Pironet or IBM. This way, you feel at home straightaway and don’t need to get used to a completely new working environment.

Who are the cloud providers?

Small to medium-sized businesses working mainly with office applications and are looking for flexible ways of collaboration may want to have a closer look at Office 365 or Google Apps.

For more specific requirements, you can choose among an abundance of providers. First of all, there is Amazon, who were more or less the first to market their computing capacities – those they only needed to manage all the Christmas shopping - to developers and have since extended their services. Then there are T-Systems, HP, Dell, IBM and many others offering cloud services for businesses. Microsoft are also in this segment with their Azure Platform. Salesforce offer specialist CRM solutions.

Typically, companies use cloud capacities to outsource customer databases (CRM), resource planning (ERP) and services for music and video downloads.
Not all cloud service providers offer all types of application for their customers, so you should inquire in advance whether a service is tailored exactly to your specific needs.

Outsourcing your own data

When you are working in the cloud, you are not saving your data in a local network, but on the server of a cloud service provider. The employees of a company access a secured datacenter via an encrypted connection like SSL or VPN, and will “remotely control” all applications and activities via their device.

If you are thinking about outsourcing your entire CRM, you should consider the data protection laws of your country. In Germany for example, you will always need your customers’ consent to handing over their data to a third party, and, if the servers are outside of the EU, you even need your customers’ extended consent.

Is my data safe in the cloud?

Even though security is one of the main sales points of service providers, standards are still subject to controversy. Legally, the company has to vouch for security, not the service provider. And when data is not stored locally and internal IT can’t oversee access to the servers, the companies cannot be sure about a third party gaining access to their sensitive data.

Cloud service providers claim that businesses can encrypt their data to prevent anyone - even the service providers - from reading the data except for authorised users.
Security standards in the data centers are constantly increased and will be improved further by measures such as biometric procedures.

However tight security: passwords and very sensitive data should never be outsourced.

Accessing cloud data

Most cloud service providers guarantee a downtime of less than 0,1%, which is a maximum of only about 9 hours per year that a company may not be able to access their own data and purchased services.
On top of that, the providers claim that customers will be safe from data loss. This, however, is not always the case, as last April’s data loss incident at Amazon Web Services proves. You always need to be certain of which data you will hand over to a cloud service provider.
Besides the uptime and bandwidth guaranteed by the service providers, you always depend on your own internet connection, its speed and the reliability of your internet service provider.

Greater flexibility

By working via the cloud you and your employees remain flexible and can make use of various possibilities of collaboration.
If you have different project sites or do a lot of business trips, you will benefit from switching into the cloud: no matter where you are, you can always access all of your data in its entirety, even if you are working in a hotel lobby or an internet terminal at an airport. This reduces data traces, like temporary files saved locally on a PC, to almost none.
With cloud computing, lost or stolen laptops in combination with irreplacably lost data are a thing of the past.

Cost savings for internal IT infrastructure and staff

When cloud providers take over almost all of a company’s IT, it significantly reduces cost for labor, hardware and electricity. On top of that, the scalability of storage space and cloud services on demand are substantial arguments especially for large businesses.

Is cloud computing useful for my business?

If you have constantly changing demands on your IT – when working at different sites or in projects with a fluctuating number of employees and correspondingly changing amounts of data or computing power, the great scalability and flexibility of cloud services will reward you with great savings. If you don’t have a project going on, you don’t have any expensive servers or computers idling.

On the other hand: you always need to remember the data security your company needs: how safe is the current company network from outside access? How much does it cost to keep internal security up to date?
Another disadvantage of flexibility: you must have internet access everywhere you want to work at.

What will the future bring?

One thing is certain: there is no stopping the development of the cloud. In a few years, devices like Google’s Chromebook will be normality, with almost no installed software and booted within seconds of switching it on.
All functions are handled via the cloud, all end devices like PC, tablet and smartphone will be synchronized. Memory and processor capacity do not need to grow as much as in the past – causing lower priced hardware.

The cloud has the potential of saving a lot of money, as long as you don’t have to pay with a piece of data security.