Search I95 Business Magazine




Cloud Computing

December 2011

A Shift is Upon Us

“Get your head out of the clouds” is an old saying disparaging someone who is thought to be dreaming too big. In the age of the Internet and digital information, being in the clouds might just be the next big thing.

References like going to or being in the cloud describe the relatively new scenario of cloud computing – the virtualization and optimization of the desktop computer. Instead of outfitting individual computers with licensed software programs and sustaining the need for increased storage or speed, an end user accesses and runs multiple software applications through a network of linked computers, servers and data storage units.

Similar to the advent of computers in the workplace when employees had dummy terminals that linked to the company’s mainframe computer, cloud computing shifts the utility to the back end. IT departments can alleviate the worry of continually installing new versions of programs on every computer or adding external drives when storage space is at capacity. Instead, depending on the composition of the cloud, all those adjustments take place somewhere else, seamless to the end user.

For many businesses, IT budgets are one of their largest expenses. With rapid fire development in technology, keeping up becomes cost prohibitive, yet necessary to maintain a competitive edge. Cloud computing allows scalable functionality without the escalating costs. When you add employees, the upfront costs are minimal to get them plugged in and ready to work. Managers won’t have to increase IT staff at the same rate since most of the troubleshooting would be handled where the company’s cloud is hosted. And, when an application comes along that can improve your business operations, implementing is as easy as flipping a switch.

How does cloud computing actually work? Well, if you have an e-mail account through Hotmail, Yahoo or Google, you have already stepped into the arena. You access your personal account through your web browser, which acts as the interface to the email program. There is no software installed on your computer. The program and the storage for your e-mail account is offsite wherever those companies have set up their own computer cloud.

When you set up your company’s cloud, you could also use existing Web browsers as the interface or choose a proprietary application to give access. The cloud itself is a number of databases, applications, programs and computers that work together in the background to give virtually unlimited computer functionality to the front end. Cloud computing host companies will have a central administrative server that monitors their client’s activity for optimum efficiency and utilization.

One of the most appealing benefits of cloud computing is its flexibility. Although there are currently three basic cloud models to use as a guide in setting up the cloud for your company, keep in mind that your particular needs will dictate how your cloud will ultimately look. A private cloud provides the most security and control since the computing resources are dedicated to your organization and frequently managed on-premise. However, this model lacks the inherent benefit of cloud computing, namely low upfront costs and shared computing power. A hosted private cloud provides the benefit of off-site management but still fails to utilize the combined power of being fully networked. A public cloud provides the initial equipment savings and the full computing power as well as the ability to monitor costs in a pay as you go format.

The cost savings for a cloud environment come in many forms. There is the upfront savings of purchasing less robust computer systems for staff. Since the power is in the cloud, there is a savings realized on simpler desktop units. As companies grow, so do their requirements for data storage. In a cloud environment, the host is responsible, allowing companies to rid themselves of outside server and storage rentals, fees and contracts.

Cloud computing is especially suited for companies who need to adapt quickly to regulatory guidelines, market shifts or consumer demands. Being able to make universal adjustments to how employees can execute their jobs without intense individual modifications can save a company time and money and bring advances to market in record time.

Increased productivity is another byproduct of cloud computing – or possibly the impetus to its creation. Without the barriers of time or location, employee collaboration takes on a whole new level of efficiency. “That file is on my office computer” will no longer impede a client presentation or lose a sale. Employees using virtually any computer or smartphone in the world would be able to conduct business as if they were sitting at their office desk.

Of course, as with any process improvement, there is a host of possible negatives that every company needs to think through before making the jump to cloud computing.


If your company handles sensitive or private consumer information or classified proprietary data, security is always a concern and a determining factor in how your IT department makes decisions. Your company will have to consider those issues when reviewing your internal policies as well as choosing a service provider. How can your company ensure business continuity processes? What are the redundancy plans at the host site? How are the firewalls and encryption elements reviewed and monitored?

Performance and Reliability
When the systems you are responsible for are under your roof, accomplishments and accountability are easy to assign. Relinquishing control to your host provider, however, makes it a bit more challenging. Discuss potential situations with your staff and host that could jeopardize your company’s access and ultimately your brand. What is the process for notification in the event of a slow down or loss of access? What are the expectations on recovery time and communications?

True Savings and Vendor Dependence
Before signing a contract, make sure you have analyzed the application of cloud computing to your company. Remember the real benefit in savings comes from avoiding upgrades, maintenance and equipment investment. If, however, you only have a handful of computers or do not project a growth trajectory that would warrant resource expansion, you may not save money by going to the cloud. As a pay as you use environment, the cloud may not work for your business model. Also, consider that the cloud is new and industry standards are still in the settling stage. Carefully evaluate how the relationship with your host vendor is established so that you do not become dependent and unable to change.

The theory behind cloud computing is exciting, but it is still an emerging technology. CIOs and business owners must perform their due diligence to mitigate risks and exposure before implementing any cloud initiative. I95