Should we sit on a cloud?

Sunday, 01 December 2013
Mick Jones on what questions to ask when considering moving to the cloud.

Cloud computing appears to be everywhere. The websites of the major suppliers of professional software indicate they are either in the cloud or headed there soon. Let’s look at what it is and what it offers, and consider the risks and benefits.

What is the cloud?

You may have heard of NIMBYs – people whose objection to something can be summed up as ‘not in my back yard’. Well, cloud-based software can be described as NOMS, or ‘not on my server’. Cloud-based software doesn’t exist on your laptop or desktop or on your network server; it’s on a server owned or leased by the software vendor.

The software is accessed by you via the internet from anywhere, as long as you have an internet connection. The vendor doesn’t have to send you a CD or come to your office to install software and wrestle with your IT department. They simply have to control your access to a website. From the customer’s viewpoint it should mean a better match of resources. More server space at busy times, less at quiet times. Low staff costs in managing the installation; in fact, no installation. In short, to use another acronym, it’s SAAS: ‘software as a service’.

This has an attraction: good use of resources and the ability to match costs to revenues

Your software vendor will charge you for the use of their software and you will pay only for what you use. There are various pricing models, but most seem to have a charge for the number of people requiring access and another for the amount of space used. This has an attraction: good use of resources and the ability to match, in an ideal world, costs to revenues for the user. There can be more complicated pricing models, of course; it all depends on the nature of the application. It all sounds good, and it probably is good, but there are some considerations.

Risks

First: access to the software. It’s via the internet, so what if the internet connection is lost? If this occurs, the software cannot be accessed. Think about how critical the application is. Most internet connections today are quite robust. However, if you are really concerned, consider having a fallback in the form of an alternative provider.

Second: control over the software. For simple applications this probably isn’t an issue, but for more complicated ones, where you may not want to take the latest update, it can be more problematic. If the software is in the cloud you will have no choice but to accept what you are given, as it is outside of your control. This may also be a benefit, as you have no upgrades to manage and will always be using the most recent version.

Finally: data. It’s your data and it has value. The data will not be totally under your control. Ask about backup policies. Not just how regularly they back up, but also where backups are held. You can, and may wish, to specify a geographical area where backups are held. While you are thinking about where your data is being held, give some consideration to data protection and confidentiality.

Conclusion

It is likely that more applications will move to the cloud. The simpler applications moved first and more will follow. Customer relationship management and simple bookkeeping systems have all made a home in the cloud. They tend to be standalone applications; for obvious reasons it would be difficult to link cloud-based proprietary data with other data in your organisation.

Is the cloud right for you? Only you can decide, and if your existing software supplier is moving into the cloud they should be able to give clear reasons. Look at the three key areas mentioned above, and remember to ask the vendor lots of questions.

Points to consider before rushing to the cloud:

  • If use of the software is critical, what happens if your internet connection is lost? Consider having a fallback provider.
  • Your valuable data will be up there and you won’t have complete control of it, so ask about backup.
  • What jurisdiction will the data be stored in?
  • Consider data protection and confidentiality issues that may arise from having data stored on a remote server.
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Mick Jones

Mick Jones is Managing Director of thewealthworks.

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