For a business, Cloud Computing means storing and accessing data and programs over the Internet instead having on-site computers with local data-storage. 

Connection to these cloud services can be from anywhere, removing potential constraints of where you and your staff can work. But, as these services are external to your company, what is essential is having the necessary, stable, high-speed Internet connection so that you can connect to these cloud-based services. For some companies, or their staff this may be a key constraint, until further progress is made within the UK with high-speed broadband or 3/4G mobile network deployment.

One of the confusing aspects of “The Cloud” is that many companies have adopted this term to help promote or sell their services - in practice there are different types of cloud service, with different implications and benefits. In many businesses, there may be a mix of these cloud services, alongside some internal IT infrastructure.

1. Software-as-a-Service (SaaS) – this is where a business subscribes to one or more applications, accesses over the Internet – for instance - Salesforce.com or Microsoft Office 365 or Google Apps for work. 

2. Platform as a service (PaaS) – this ‘cloud’ flavour provides a capability (termed ‘platform') that allows the business to develop, run, and manage Web applications without the complexity of building and maintaining the infrastructure required for developing, launching and then running the application (or ‘app’).  This application development capability can be delivered in two ways:

• As a public cloud service from a provider, where the business (consuming the service) controls the software deployment and configuration settings, and the provider provides the networks, servers, storage and other services to host the business’s application(s);

• Or as software installed in private data centres or public infrastructure as a service (see below) and managed by their internal IT function.

The benefit is that the business does not need to manage the capital cost and complexity of buying and managing the underlying hardware and software layers. Instead, these PaaS services will generally be billed on a monthly or annual recurring revenue cost related to the capabilities that are being used.

3. Infrastructure-as-a-Service (IaaS) - where providers such as Amazon, Google, Microsoft and Rackspace provide a basic computer infrastructure (e.g. computer servers and network) that can be rented on a pay-as-you-go basis – with the costs related to the actual level of usage (consumption) of services. This capability requires the business to use their technical (or third-party) staff to manage and configure the required computing resources that are needed. IaaS services are billed on a utility computing basis: cost reflects the amount of resources allocated and consumed.

In addition to the 'big-name' companies, there are a growing number of smaller IT businesses, that provide PaaS and IaaS services to local SME businesses.  

Are Cloud Services a good idea?

Adoption of cloud services in these different forms is growing.  The attraction is the opportunity to deliver cost efficiency and ease of use.  Cloud Services can enable new capabilities to be provided very quickly and can support rapid volume growth (or indeed down-sizing) supporting business agility, seasonal variations and cost-control.

Yet, as with most things – ‘all that glitters is not gold’ - there are a number of considerations which do need careful assessment and review to ensure a successful adoption.  Examples include data security of sensitive customer or business data, the risks associated with dependence on a third-party organisation to manage a key element underpinning your business operations and ensuring that the cloud service costs do not result in unplanned costs. Appropriate business process and technical design may be required if multiple cloud services are being adopted, or the implications of a mixture of internal and external cloud services. 

Another consideration is the essential pre-planning of the right exit strategy should things go wrong, or as your business needs change, you retain the capability to change cloud providers.

For larger organisations, one of the challenges is that individuals or teams within a company may purchase a cloud service simply using a company credit card, bypassing purchasing or agreed on policy standards.  Whilst benefit can be achieved through the rapid provision of new services, the downside is that the business may be exposed to longer-term risks and implications in relation to data security, hidden escalation of costs and fragmented business processes. 

Good practice for organisations of all sizes is to have clear policies in place, involving the relevant business leaders who are accountable for HR, Legal, Finance, Operations and IT – and to ensure that such policies are communicated and explained to everyone in the business, and that they are updated and maintained as the business needs change and technology capabilities evolve. 

Opportunities

1. Innovation - there are some great applications in the cloud, which you can test and trial quickly, simply and at minimum cost.

2. You can quickly scale up your business - without the corresponding increase in fixed technology assets or specialised technical staff - so your cost per unit, project or product plummets.

3. Reduce spending on technology infrastructure - reduce capital costs - Maintain easy access to your information with minimal upfront spending. Pay as you go (weekly, quarterly or yearly), based on demand. The 'win' is that there is no need to spend big money on hardware, software or licensing fees.

4. Improve accessibility. You have access anytime, anywhere, making life so much easier.

5. Globalise your workforce - People worldwide can access the cloud, provided they have an Internet connection.

6. Moving to popular standard solutions can reduce training costs, and make it easier to recruit staff with the business application process knowledge you may need.

7. Improve flexibility - you can change direction without serious “people” or “financial” issues at stake.

8. Reliability - With a managed service platform, cloud computing is generally more reliable and consistent than in-house IT infrastructure. Most providers offer a Service Level Agreement which guarantees 24/7/365 and 99.99% availability. 

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