Cloud Computing – Just Right for Small Business

April 20, 2011

Business

cloudsecure_14_full image | Cloud Computing - Just Right for Small Business

Cloud Computing is one of those technology buzzwords that is everywhere. Just about anything you read on the topic talks about a mass movement to the cloud. It’s almost as if the train has left the station and if you’re not on it you are far behind or too late. Add to this that cloud computing can be considered mysterious as you can’t really see it or touch it.  The reality is that cloud computing is not new. It’s been around a long time and all of us have accessed data or applications resident in the cloud. We might not have always realized it. While the train has left the station the good news is that there are plenty of other trains that haven’t and there is one that’s perfect for you.

Cloud Computing is self-service which is on demand, elastic, measured, multi-tenant, pay per use, cost-effective, and efficient. It is the access of data, software applications, and computer processing power through a ‘cloud’ which is a group of many on line – demand resources. Tasks are assigned to a combination of connections, software, and services accessed over a network. This network of servers and connections is collectively known as “the cloud.” Cloud computing is not just a technology, IT methodology, or a science. It redefines how people get work done and how information is accessed.

Over time Cloud Computing will put more universally acceptable intelligence in the hands of more people at disruptive costs of computing and access

Cloud computing is an expected evolution in how computing gets done. As social tendencies, business requirements, and technology improvements (functionality and price) come together moving computing centrally, allowing more universal access makes sense. Phone companies did this many years ago by moving telecom intelligence to their version of the hosted data center – Colocation or “COLO”. Phones (standard and mobile) today are thin clients accessing a myriad of applications, content and computing power. As technologies and business processes matures it is natural to move them to a more efficient and effective model. This occurs across other industries outside of IT.

The cloud can deliver:

  • REDUCED COST - Cloud technology is paid incrementally, saving organizations money.
  • INCREASED STORAGE - Organizations can store more data efficiently than on private computer systems.
  • HIGHLY AUTOMATED - No longer do IT personnel need to worry about keeping software up to date.
  • FLEXIBILITY - Cloud computing offers much more flexibility in configuration, access, and administration than past computing methods.
  • MORE MOBILITY - Employees can access information wherever they are, rather than having to remain at their desks.
  • ALLOW IT TO SHIFT FOCUS - No longer having to worry about constant server updates and other computing issues IT can now become a tool to help the business compete better.

cloud-delivery image | Cloud Computing – Just Right for Small Business

silver-lining image | Cloud Computing – Just Right for Small BusinessThe Perfect Storm

If we assume that cloud computing is disruptive in that it dramatically alters how computing gets done, then it’s important to consider what characteristics must be in place for disruptive technology to take hold.

All 3 of these characteristics are in place today.

1.   First is a business need that drives the use of the technology.

2.   Second is availability of supporting or enabling technologies that individually are proven and cost effective.

3.   Third is social acceptance which drives mainstream acceptance. While each factor on its own is interesting putting them together drives mass acceptance.

cloud-delivery-model image | Cloud Computing – Just Right for Small Business

Cloud service delivery is divided among three fundamental classifications referred as the “SPI Model,”

  • SaaS – Software as a Service – Examples include Google Docs, Zoho Docs
  • PaaS – Platform as a Service – Example – Google App Engine
  • IaaS – Infrastructure as a Service – Examples include Amazon EC2, S3

There are four deployment models for cloud services regardless of the service model utilized (SPI).

Public clouds refer to shared cloud services that are made available to a broad base of users. Although many organizations use public clouds for private business benefit, they don’t control how those cloud services are operated, accessed or secured. Popular examples of public clouds include Amazon EC2, Google Apps and Salesforce.com.

Private cloud describes an IT infrastructure in which a shared pool of computing resources—servers, networks, storage, applications and software services—can be rapidly provisioned, dynamically allocated and operated for the benefit of a single organization.

Hybrid Cloud represents composition of two or more cloud deployment models (private, community, or public) that remain unique but are bound together by uniform or proprietary technology that enables data and application portability.

Community Cloud represents infrastructure as shared by several organizations and supports a specific community that has shared concerns. E.g. FDA compliance needs specific controls where audit requirements can’t be met by other deployment models.

Cloud computing brings efficiencies and savings. The diverse benefits of cloud computing are undoubtedly worth pursuing. Cost-cutting is at the top of most companies’ lists of priorities in these challenging economic times. In only paying for the resources used operating costs can be reduced. After all, in-house data centers typically leave 75%-80% of available capacity idle. Cloud computing can lead to energy savings too, removing from individual companies the costly burden of running a data center plus generator back-up and uninterrupted power supplies. Thus it results in reduction of CAPEX & OPEX.

Information Security image | Cloud Computing – Just Right for Small Business Information Security

For all the benefits of Cloud Computing the nature of the fundamental technology raises issues for consideration in the areas of data and information security.

Some things to consider:

1. Privileged User Access. Sensitive data processed outside the enterprise brings with it an inherent level of risk, because outsourced services bypass the “physical, logical and personnel controls” IT shops exert over in-house programs

2. Regulatory Compliance. Customers are ultimately responsible for the security and integrity of their own data, even when it is held by a service provider. Traditional service providers are subjected to external audits and security certifications.

3. Data Location. When you use the cloud, you probably won’t know exactly where your data is hosted. What’s important is to understand how secure your data really is and the steps your provider is using to assure it remains secure.

4. Data Segregation. Data in the cloud is typically in a shared environment alongside data from other customers. Encryption is effective but isn’t a cure-all.

5. Recovery. Even if you don’t know where your data is, a cloud provider should tell you what will happen to your data and service in case of a disaster. “Any offering that does not replicate the data and application infrastructure across multiple sites is vulnerable to a total failure,”

6. Long-Term Viability. Partner with a service provide in which cloud computing is a core competency and an aspect of a more complete managed service offering. Effective Managed Service Providers realize that cloud computing is just a piece of an overall IT strategy. This IT strategy should be co-developed with your MSP and align to your business goals which highlight the security requirements you have for your data, customer’s data, access, and availability.. Only when this occurs will you be more certain that the cloud technology recommendations are the right ones that benefit your overall business plans as well as your IT security needs.

Costs Can be Deceivingdeceiving image | Cloud Computing – Just Right for Small Business

There are fundamental financial advantages in cloud computing. Some are obvious and others aren’t. The cost of mass-centralized computing and storage has advantages over smaller less efficient data centers. Add this to an environment where you move towards a model where you only pay for the processing you use, the storage you need, and the applications being utilized and the cost advantages can be significant. Keep in mind that there are other aspects you need to consider that factor into the overall price. Increased requirements around security, network connectivity, redundancy, and remote secure access and can add costs in areas that are insignificant today. Thus, it’s important to look at all the factors and costs in addition to understanding the educational and productivity impacts on employees. Smart companies consider direct and indirect costs in deciding how to implement cloud computing over a reasonable (1 to 3) year period of time.

So how can Cloud Computing be beneficial to Small Businesses?

  • Allows more focus on core business
  • Cloud computing is particularly valuable to small and medium businesses, where effective and affordable IT tools are critical to helping them become more productive without spending lots of money on in-house resources and technical equipment.
  • Overall IT cost savings
  • Remote access
  • Ease of availability
  • Real-time collaboration capabilities
  • Gain access to latest technologies
  • Leverage significantly more processing power to do things that traditional productivity applications cannot do. “For instance, users can instantly search over 25 GB worth of e-mail online, which is nearly impossible to do on a desktop.
  • To take another example from Google each document created through Google Apps is easily turned into a living information source, capable of pulling the latest data from external applications, databases and the Web. This revolutionizes processes as simple as creating a Google spreadsheet to compare stock prices from vendors over time, because the cells can be populated and updated as the prices change in real time.
  • With mass adoption Cloud computing will dramatically lower the average cost of computing for both processing and cooling.

Cloud computing helps small businesses avoid capital expenditures on hardware, software and other services because you only pay the provider for what you use.  Billing is typically based on consumption similar to utility services or on a subscription basis.  Cost is further minimized because you are sharing infrastructure costs across the cloud with other users.

Trusted AdvisorTrust2 image | Cloud Computing – Just Right for Small Business

The question is not about whether cloud computing is right or wrong for you. We access for too many cloud based applications, services, and data today both as businesses and consumers.  The real question is how businesses capitalize on utilizing cloud computing to your company’s advantage today and tomorrow. You must figure out how to develop a strategy that encompasses current and future requirements tied to business goals with a keen eye on what technologies are available today and expected tomorrow.

You have options for getting expert advice and support. One is to attempt to figure this all out on your own. While this was a viable option when your IT was within your 4 walls the added complexity and risk associated with cloud computing takes your requirements to a new level. You can reach out and partner with hosting companies and cloud providers directly. While this might make sense for larger enterprises that carry more clout, for small businesses this can be tough.

Find a Managed Service Partner that can assist you in determining what you cloud computing strategy should be. Your results will be a plan that is both strategic and tactical while looking at both today’s needs and tomorrow’s challenges. The better MSP’s treat cloud computing as an element of a larger IT strategy and, as a result, will partner with the best providers by category of service and deliver the integration and oversight that can only be provided by a service provider with your business objectives in mind.

About Frank Picarello

Frank is a well-respected leader in providing technology services to small and medium-sized businesses. He is currently COO for TeamLogic IT, Chairperson for CompTIA's Small Business Owner's Group, and a member of CompTIA's Unified Communication Committee.

View all posts by Frank Picarello

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