What does “the cloud” mean for my firm?

With over 300 days of sunshine per year, no major city in the country has fewer cloudy days than Phoenix. Despite the sunny weather, it’s impossible these days to avoid the latest technology buzz word – “the cloud.” Cloud computing refers to storing data or running applications from remote or “hosted” servers which are accessed via your (hopefully) high speed internet connection.

Beyond the fluffy white imagery, there is real-world appeal to the cloud. The promise of paying a simple monthly fee to subscribe to services that might otherwise involve buying servers, software, and management is extremely compelling. Concerns with the cloud are no different than with any other type of computing approach: functionality, security, reliability, performance, and price. If those issues were addressed to your satisfaction, who wouldn’t want to pay a simple monthly fee for all your computing needs to “just work” so you can run your business and not deal with technology?

So why do very few firms choose to host all their data and applications in the cloud? Despite the promise that the cloud holds, the cloud doesn’t fundamentally change the equation. Software, hardware, and technical support are still required to make everything work. Take a server, plug it in to power and network at your house, and you can call yourself a cloud computing provider. For most firms, if you were to attempt to simply “pick up” the servers in your office and “put them in the cloud”, it’s likely going to be more expensive than what you are doing today. You can take larger capital expenses and turn them into smaller monthly operating expenses, but leasing or other financing approaches do the same thing. There are compelling cloud based solutions, but the cloud itself is simply a technology approach, not a magical “easy button”.

Cloud options should be considered in your business technology plan. Several cloud-based applications make particularly good sense today and more will make sense over time. Anti-spam generally belongs in the cloud. Understanding why this is so can help you evaluate the merits of any potential cloud solution.

Initially, anti-spam software was loaded on in-house servers. Very rapidly, cloud anti-spam became extremely popular, and Google’s Postini service became the market leader. This is the service we utilize for our full service clients and is the most popular solution for our larger firm clients for whom provide strategic consulting. Why did this go to the cloud? Once again: functionality, security, reliability, performance, and price. Google and other anti-spam providers have the benefit of incredible economies of scale and all internet email by definition is already processed “in the cloud”. Simply inserting a service like Google Postini as the destination for your email before it gets to your system is “a no brainer”. Management is still required to work with Postini, but it is reduced with Google handling the heavy lifting. With less than 10% of all email being legitimate, Google filters out all the garbage before it hits your system. Even if you were to have an in-house anti-spam service that was better than Google’s (good luck with that), you would be wasting precious internet bandwidth receiving and processing spam internally. Your firm likely already relies on hosted anti-spam and this is why.

Other popular cloud applications include: system backup, system monitoring, and various specific applications. The appeal of cloud based backup is easy to see. A critical component of any backup strategy is ensuring secure transfer of the backup off-site in the case of disaster. As backups have shifted from tape to disk, the process of getting the data off-site has moved from manually rotating tapes off-site to either manually rotating portable hard drives off-site or using the cloud. Not only is cloud off-site backup automated and easier to ensure that it’s being done, failover capabilities can be substantially improved. I recommend a hybrid-cloud backup approach that ensures you can restore your data locally very quickly with rapid failover available locally and off-site.

While running your entire office “in the cloud” on an ongoing basis will likely be too expensive today, it can be extremely cost effective to run your entire office “in the cloud” only as needed on an emergency basis. Disaster is more common and comes in different shapes than you might imagine. Just this past summer, there was a large office building in downtown Phoenix that lost power to half the building for an entire week due to a transformer fire. This is a situation where the cloud can help speed recovery by having an on-demand hot site available. Cloud-enhanced solutions for backup, disaster recovery, and hot-site are now cost-effective and simple for firms ranging in size from 5-500 people.