What is this 'cloud computing' thing anyway?

I’ve been getting this question quite a bit from clients / their staff in the last year or so.  It’s no surprise, though - who, other than the IT industry, could rename “The Internet” as their new sales tactic and get way with it?  Well, not quite…  To keep it simple, “Cloud computing” is the outsourcing of applications (e.g. email & ‘groupware’, document storage, CRM, accounting software) and their underlying platform, databases and server infrastructure to be hosted by a 3rd-party, usually in consolidated data centres that you’re sharing with many other users. 

In fact you’ve been personally using “The Cloud” for as long as you’ve used “The Internet”.  Email is the original and classic example of a ‘cloud service’, where you and all the ISPs customers share the ISPs email infrastructure.  The main difference now is that “The Internet” can be used for a lot more things, and geeks like me love scribbling network topology diagrams with a big fluffy cloud in the middle representing The Internet ;)

The prime enabler of Cloud Computing is the near-ubiquity and rising speed of broadband almost everywhere, which means it’s becoming practical to store and access more stuff on the internet, instead of isolated on our home computer or office servers.  It’s enabled a huge number of new services and applications that just weren’t practical before (the whole “social networking” paradigm in all its thousands of flavours is basically putting your - and everyone elses - personal info into a 3rd-party’s computing facility), and it has the potential to lower costs for the consumer / business by leveraging the economy-of-scale that comes from sharing computing resources amongst many users, rather than having your own dedicated server(s) and software in your office, and in many cases you don’t have to bother with maintenance, updates, upgrades, backups, and all those pesky IT intricasies - that’s usually done for you. 

Here’s some obvious examples:

  • Office 365, Microsoft’s new cloud computing service, incorporates Exchange-based email, calendar & contacts management, web-app versions of Microsoft Office (Word, Excel, Powerpoint) and the storage & sharing of these files in ‘the cloud’ via SharePoint, Unified Messaging (meetings, instant messaging, fax, VoIP & ‘presence’), and optionally free updates to the Microsoft Office suite of apps installed on your own computers, all for a not-so-low monthly cost per user.
  • Google Apps / Google Docs - Google had been putting together their suite of cloud services for many years, aimed at both individuals and SMBs/SMEs, including Email, Calendar, Documents, Spreadsheet, Presentations, and the new Google Drive for storing all your stuff, and a whole lot more.  It’s free for organisations of 10 or less users, but $50/user/year above that.
  • Apple’s iCloud, aimed more at the individual consumer, includes the usual Email, calendar, contacts, document storage, and some other features like Reminders, Bookmarks (for websites), Notes, Photo Stream, Find My iPhone/iPad/Mac, other niceties like Facetime (video-calls) and iMessage (free SMS/MMSing), and is free for the first 5Gbytes of storage.  You can also add the $35/year iTunes Match which uploads your entire music library to iCloud and makes it available on all of your iDevices &/or iTunes on your computer(s) (Mac or Windows) without the usual syncing, or tedious manual copying.  Unfortunately iCloud is not (yet) geared towards business needs for collaboration with multiple iCloud users.
  • There’s dozens of cloud file storage and syncronisation products, many of which work across multiple platforms & mobile devices, like Dropbox, Carbonite, Google Drive, JungleDisk, Windows Live Skydrive, and Amazon S3, to name just a handful, including a bunch of others in Australia aimed at the business / corporate data backup market.  It’s a zoo catering to varying features, costs, purposes, levels of security, and target markets.
  • Do you have a line-of-business application running on your own in-house server?  Accounting software?  CRM?  ERP?  Practise Management?  Then there will either be cloud options or equivalents, or you can even move your own server-software & data into someone else’s data centre, where scary terms like “virtual private server”, “dedicated hosting” and “colocation” will keep you on your toes.  Reasons for doing such a thing include faster access for staff outside your office; multiple sites, potentially lower costs (compared to owning your own hardware); possibly having 3rd-party specialists taking care of the infrastructure for you; and better protection from disasters like theft, fire, & power-outages.

However there are several things to consider with “cloud computing”:

It all resides out there on the internet, somewhere other than your own computers/servers in your own premises.  So if your internet connection goes down, you’re screwed for as long as it’s down.  Broadband is fairly reliable in many Australian locations, but not all, and SNAFUs still happen.  As for mobile access, you’re always at the mercy of the 3G/4G gods cloud or no cloud.  Having some kind of backup internet connection (eg. a router with 3G fail-over) is a wise choice for a business heavily dependent on cloud services.

Most cloud services are not based in Australia, and thus your data is not residing in Australia.  You (or at least your data) are in fact subject to the laws of a foreign jurisdiction.  This topic can be complicated, and is exacerbated by the concept of trust, and whether or not you beleive that all parties involved observe which ever laws govern access to your data.

Security - that thing some people like to think of as a binary quality (it’s not & never has been) - in the Cloud context exposes you and your data to a whole new universe of risk.  Your lone ACME Widgets Co. in-house server connected to the internet is only likely to be a low-grade target for hackers or scammers, principly from opportunistic infection by malware from websites & phishing emails.    The unfortunate reality that’s become apparent over the last year or so is that there’s precious few if’s or maybes about getting hacked - anyone who’s big has already been hacked, whether they’ve admitted it publicly or not.  So when you put your business in the Cloud along with thousands or millions of other customers of that cloud service provider, the whole lot becomes one big juicy target for various types of exploitation, data theft, or identity fraud.  This is a fairly rapidly evolving landscape, and each Cloud service provider needs to be evaluated on its individual merits and shortcomings according to your businesses needs.

Last but not least is cost.  Google Apps is free for organisation with 10 or less users*, or us$50/user/year for more than 10 users.  Microsoft’s Office365 comes in a range of plans and features, ranging from au$7.90 to au$33.30 per user per month.  (*Call me cynical, paranoid, or just plain uninformed, but if you aren’t paying for a service, then there’s a pretty good chance that YOU ARE THE PRODUCT bieng sold for advertising or marketing purposes.  Some people are OK with that, some aren’t.)

In comparing a cloud service billed on a per-user per-month basis, one has to compare that cost - which is essentially perpetual, and predictably scaled to the number of staff - to the TCO of a self-owned in-house server solution that in most cases will likely support however many staff the business needs to throw at it, on infrastructure that will likely have a 5+ year lifespan.  One must also factor in the cost of support, updates, upgrades, maintenance and backups, much of which is included in the price of these cloud services.

The Cloud is here to stay, and the chances are that most SMBs & SMEs will migrate much of their computing resorces to cloud equivalents sooner or later, most well before thsi decade is out.  The question is when, and which cloud services are right for your business.  No doubt I’ll be talking a lot more about these questions…

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