I have been getting more and more questions about the Cloud and what is it all about? So I asked a Bradley Wilson with Iris solutions to tell us about it. Here is what he had to say.

What is the Cloud and what does it mean for you?

As almost everyone has seen and heard, the cloud has become the new buzzword in the Information Technology (IT) field. Some people think the cloud is a new technology, however, it has been around for some time. Have you ever had a Yahoo or Hotmail account? Do you realize this is a cloud based service? The cloud is not a new philosophy just a new expression for some existing and old technology. The cloud can be explained as a service that is hosted via the internet where you do not need shared resources, software and other hardware to utilize this service. All that would be required is a computer along with an internet connection.

Cloud services are great for g-mail, file sharing such as dropbox and some hosted based applications. Cloud based services have some very distinct advantages and just like anything else have some disadvantages.

Your advantages are easy to account for:
• Low cost of hardware – You will not require expensive back office equipment to run your databases and applications. All of your file sharing that was going to be stored on a server in your office will be stored online. Your upfront costs are very low. Typically, hosted services in the cloud are setup so all you need is an internet connection and a computer.
• Maximum uptime/availability – Any decent cloud based provider will have multiple customers that require use of this service. This provider would guarantee a certain level of uptime or availability of their service by having it available to you at peak times of your business. They will have redundancies (power, telecommunications, hardware and security) in place to avoid a single system failure at their site thereby maximizing this uptime or availability.
• Maintenance – Maintenance will be performed during the cloud provider’s off peak times such as the middle of the night or on weekends, minimizing your downtime during a work week. Maintenance such as enhancements and fixes to the application would be performed without client intervention and would allow for quick and easy software patches to correct an error.

The disadvantages of a cloud based system:
• Ownership of data – You do not own your data. If you use a cloud based application called XYZ CRM and you decide to move to another vendor ABC CRM, you in some cases will have no guarantee as to what data XYZ will give you. Your data is essentially stored on their system and

they will retain ownership of the information. The cloud based provider will tell you that you can retrieve your data but it may not be in a usable format or the format that you may prefer. As with all conversions of data from one software package to another, it is a very high probability that you will never get a one to one translation for your data if you were to move from a cloud based application whether it is to another cloud based provider or to host your own information.
• Accessibility\speed – In the preceding paragraphs, I wrote about how maximum uptime can be achieved with a cloud base system. However, this does not guarantee accessibility to the application or data. Many cloud based applications transfer small amounts of data down to your individual system. For applications that require more data such as imaging, calculations, or reporting a cloud based system will be slower. Should you need to transmit a set of digital images from a camera or a radiograph the access to this data will be much slower. A typical network on a customer site can work at 100MB to 1.0GB. This means that you can access your data on your network at one hundred million bits per second up to one billion. The fastest cable provider in our area can deliver from five million to thirty million bits per second. As you can see, having a system on premise will always be much faster than something in the cloud. When looking at a cloud based application it is best to determine how much speed is required and what you will be transmitting before making a final decision.
• Cost – Many would say that cost should be considered an advantage but I would say the opposite. In the determination of a cloud based system, you should determine how long it would take justify the monthly cost of the application versus what it would cost to get the system put in house. If you brought your application in house you would need hardware to run all the databases and applications, a software purchase to install on the hardware, and the cost of a qualified IT professional to set this up. However, as this cost may be high up front, it does have a low monthly overhead. The break-even point to where you would have paid off your on premise system versus the cloud based system is typically 18-24 months. When you surpass the break-even point, this is when you start to spend more for a cloud based system than on a premise application.
• Contracts – Typically, a fee for service cloud based provider will lock you into a contract for their services. These providers know what their break-even point is and how to maximize their contract with you to make the deal profitable for them. These contracts may be longer than you want and have excessive cancellation fees.
• Downtime – I mentioned an advantage of a cloud based application was uptime but how would downtime hurt you? In a traditional premise based application, if your system goes down you call your local IT support and dispatch them to correct this. Depending upon who you use for

local IT support you should get same day response. If your cloud based provider has an internet or power outage you will have to wait on them. For instance, what if your provider is based in Silicon Valley and they have an earthquake that cuts power to their facility. How long are you willing to be without your data while you wait for the local California power company to restore power to your provider? You will not have any control over downtime and it may or may not be excessive. Does your provider reimburse you for lost revenues? I would say they will not.
Overall, the pros and cons aside, it should depend on your application’s features and benefits to determine if you need cloud based services. Specific applications have been proven to be successful such as e-mail or file sharing. Application hosting has been around a very long time but may not provide you with the service you expect to differentiate your business from your competitors.
Work with your peers and local IT support to gain insight on what would and would not work to help you determine the right path. Good luck!

For more information or questions, please give me a call.