Cloud Computing: a 3-page Primer
Cloud Computing: a 3-page primer
By Pete Clouston
Cloud Computing is an exciting, compelling and affordable concept that enables businesses to operate using world-class software and infrastructure. Picture the future. Your business runs its systems and applications 'online'. Not a server or piece of shrink-wrapped software in sight. And a few more dollars left in the coffers, too. I wouldn't mind betting that this could be the picture for a lean, competitively-edged business in a year's time. Embracing Cloud Computing can put a business in a position that allows it to focus on and invest in growing its core strengths, excelling at what it's already well known for and perhaps innovating into new areas. Today's picture will, probably, look rather different.
Revolution and Evolution
Despite the nay-sayers, cloud computing is both revolution and evolution - and it's certainly changing the shape of technology, as well as the value proposition of the traditional IT function. Cloud computing is a revolution for those who decide to embrace it, extend it or build upon it for competitive advantage. For those who want to stand back and move slowly towards it from their present picture, Cloud Computing is an evolution.
Imagine moving your IT provision - servers, disk space, applications, data - beyond your business and into 'the cloud'. It's a real paradigm shift, that's for sure. As we'll discover, it's not an unproven or risky path for New Zealand businesses to take. Rather than the traditional model of purchasing a physical software or hardware product, cloud computing introduces the notion of subscription to a service.
Example 1 - Software as a Service (SaaS)
Background You decide your existing accounting software package is not meeting your company's requirements. Embracing the Cloud Instead of committing to purchase an alternative 'product' and arranging to have it installed across your company's PCs, Macs or server, you undertake a free trial of a software program used through your web browser (Internet Explorer for example), via the Internet. The latter is what we mean by software as a 'service'. Following the trial, you can subscribe to the software service - with no multi-year
contracts, or complex licencing structure to fathom out. To help your business move across, you may want to enlist some external expertise. Kiwi customers Major Kiwi organisations are moving to embrace SaaS. These include New Zealand Post as well as the Universities of Auckland and Waikato. They're all using Google Apps, which is a suite of office, collaboration and web site applications. Should an Internet connection get interrupted for a period (note the brief Google outage on 2 September), staff can even carry on working in an offline scenario.
Example 2 - Platform as a Service (PaaS)
Background Your business employs external software developers to create a new web browser-based application, which your workforce will be able to securely access via the Internet whether in the office, or working from home. Your business needs to run this application on a specific technology platform, such as Microsoft’s .Net. Embracing the Cloud Instead of purchasing and installing new production/backup servers, technology framework and database instance, your business looks to utilise a cloud-based Platform as a Service resource. Your business pays a monthly subscription to utilise the computing platform which hosts and delivers the new application. The computing resource scales according to demand, so if your headcount increases by 25% over the next few months, you can easily allocate more computing resource, literally at the click of a mouse. You avoid the worry of needing to buy/install a hard drive (say), how to install and maintain the technology framework or how to back up data. That's all now the responsibility of the PaaS provider. Kiwi customers One example of a Kiwi company utilising PaaS is Christchurch-based Trineo, founded by Daniel Fowlie. Using PaaS, Trineo is developing LegalSoftOnline.com - an online practice management tool for legal firms. LegalSoftOnline.com is based upon a PaaS solution called force.com. The force.com PaaS solution used by Trineo offers programmable business logic and user interfaces, as well as customisable databases.
A new opportunity for innovation
There's more to the cloud than SaaS or PaaS. Embracing the 'cloud' is more than simply an exercise in smart outsourcing. Cloud Computing is also about using technology - web standards, clever software coding and cloud service providers - to create new value for your business. By 'new value' I mean things like a competitive edge, innovation and even a new business model.
Pros and cons
I'm a realist/optimist more than a blind optimist. So let's clarify that Cloud Computing is not perfect in every sense. In the cloud, data is stored somewhere else other than your office (maybe that happens already). So while in the cloud your business would still own its data, the data would be
managed by another party. Naturally due diligence would mean you'd want to clarify how responsibly and securely the data is stored. The silver lining - excuse the pun - is that your data's secure storage and backup typically operates in a secure data center in Asia, Europe or the US, typically at a far higher standard of security and backup than you would get by hosting your data 'onpremises', backed by attractive Service Level Agreements.
For you, the customer, there's a new value proposition on the table. While there is an amount of 'hype' around the cloud, Cloud Computing itself is not hype and, for business, will be an enabler and growth agent for the long term. Not surprisingly, a few technology companies are spreading fear, uncertainty and doubt in part due to playing catch up with the cloud, and in part due to wanting to protect their traditional revenue streams. Meanwhile some small (but flagship) Kiwi companies are punching well above their weight right now with their SaaS solutions - three examples being Xero (accounting www.xero.com), Pocketsmith (budgeting - www.pocketsmith.com) and Sonar6 (performance/talent management - www.sonar6.com). A bit more on New Zealand-based Xero - which proudly claims to be 'the world's easiest online accounting system'. Xero is doing rather well, with revenue on the rise, customers across 71 countries, a headcount of 73 and offices in Wellington, Auckland, Christchurch and London. The cloud is a great reason to think beyond the mundane or average and think 'excellence', competitive edge and innovation - all potentially at a significant dollar saving. Take a look!
Pete Clouston is a Waikato-based IT architect and entrepreneur with 18 years IT experience in the UK and NZ. He is a passionate about helping New Zealand business embrace the new opportunities of Cloud Computing. Pete can be reached on 021 072 9901, or via Twitter at @peteclouston. Pete works for Optimal Technology Solutions Ltd, advising on, and deploying 'best of breed' cloud computing solutions. Sign up to a quarterly cloud newsletter at www.opteso.co.nz Pete also runs Bringing Clarity Ltd, an advisory service, with an unashamedly webcentric focus, for businesses wanting to simplify or re-align their IT and business architectures. www.bringingclarity.co.nz