Going to the Clouds Above

Feature from: ENGINEERING NEWS- September 2009

It is fair to say cloud computing scares me as much as it excites me. The only saving grace is that most of my competition seem to have their heads firmly stuck in the ground which is as amusing as it is dangerous.

Cloud computing will signal the death knell for many IT/technology companies in New Zealand unless they can adapt, which will probably be unlikely.

For those that are unaware, cloud computing is basically application and infrastructure provided as a service. This means businesses only pay for what they use and can have access to whatever resources they need for only the time they need it. To give an example, instead of having a server onsite, businesses will pay for a defined specification of resource they require ie cpu size and HDD space etc and will pay for this virtualized infrastructure on a monthly basis exactly like a utility. If you require to change your resource allocation, your price simply rises or falls in accordance. This removes all points of local failure for server hardware and the pricing is much cheaper than buying onsite facilities and trying to do it in-house. It is fair to say that you should not be buying onsite servers if you have under 200 staff unless you are in a highly graphical dependant industry such as architecture or engineering.

Similarly applications can also be delivered through the cloud, such as Microsoft Exchange. So instead of buying a server and running Exchange locally, you only pay for the users you have for a fixed monthly fee and all licencing, storage, backups, updates, monitoring and reporting is completely taken care of.

Benefits to businesses of the cloud are price, reliability and flexibility of services. This isn’t even taking into account the removal of issues like licencing. If you don’t already know about this, you need to.

To understand why this is’nt probably being promoted by your technology company you need to understand where most of the industry currently make their money. Most technology companies in New Zealand make their money from selling technical time and hardware. This doesn’t exactly make for a mutually beneficial business arrangement. If your infrastructure works perfectly, these guys don’t make any money. An interesting clash of interests as you actually want your infrastructure to be ‘up’ as much as possible. Hence, you will have onsite servers promoted to you. Servers and onsite infrastructure have moving parts, more moving parts means more points of failure, and more points of failure means more money for your IT provider. Put all the moving parts in the cloud and what does your local IT company have?..... nothing!

This way of doing business is dead already. I don’t believe most businesses, and there are definitely exclusions to this, should have onsite servers. It doesn’t make sense

If you don’t realize this is happening, just look at what NZ Post announced in July. NZ Post has now moved all email services to the cloud using google. This is going to save them $2 million dollars as well as providing a whole bunch of services they didn’t have before.

So what are the downsides for the cloud? Well, the most obvious is data ownership. I would love to know how NZ Post tackled this. My thoughts would be that although saving themselves $2m, they have also probably locked themselves into a proprietary system that will be very very hard to move away from if the need arose. Salesforce.com which offers Sales Management tools through the cloud does a very similar thing. If you ever needed your data, you would probably get screes of 1’s and 0’s in a datafile but no way of translating this into any usuable format meaning you are tied to that particular solution. This alone is enough of a reason for seriously considering the flexibility of the solution and your ability to shift easily if prices rose too dramatically or if the solution no longer fitted the business requirements

Also, under the cloud model, everything becomes an operating expense and for some businesses this may not suit.

To be honest, probably the most important thing moving forward will be how fast, reliable and big your internet pipe is. Proper network and router management will become a big thing as people become wholly dependant on the Internet. With the advent of some of the new technologies available over copper toward the end of 2009, businesses will accept poor quality internet services less and less, however for a period these services will also be a premium price level as they become bedded into the market.

The bottom line is that if you haven’t had a look at the cloud, get on the phone and make a few calls. You need to know if it can work for you and what steps you need to take to begin this process. 

Patrick Kershaw is a Business Partner for Horizon Pacific, a nationwide technology support provider specialising in assisting SME’s with all their technology requirements. For further information, go to www.horizonpacific.com