Everything I have read about cloud computing, like so much else in the world of information technology (IT), is so full of jargon it tends to make the understanding ever more, well, foggy. Last week I participated in an event at the BT research and development centre at Adastral Park near Ipswich that was set up to help them discover what business might want from BT relating to cloud computing services.
I'm left asking myself, is it really necessary for us to feel stupid everytime there is a new technology innovation. Mostly, they are not. The technique, deliberate or accidental, is to create an industry vocabulary for ideas that are not yet fully developed and use it publically is if it were all well defined and fully working. Please, do not feel stupid. Cloud computing has been vague, ill-defined and theoretical. Whilst there are some really good working examples the concept as a whole has been badly presented.
The term 'cloud computing' is a term applied to a wide variety of real services that work and conceptual services that might work one day that are supplied over the internet. There are green credentials for the cloud. It really is much more efficient with a significantly smaller carbon footprint to move computing power from a miriad of PC's and Macs to secure centrally run machines in data centres. When you buy 'cloud' you get to pay as you use or in predetermined monthly amounts avoiding up front costs and licences.
One good example many readers will have experienced is with email services. Most company email runs on a server at your employers business premises, they will have paid for both the equipment and the software licences to make the email work. Quite separately you might have an email account with, hotmail, or Gmail, or yahoo, where the email is not stored on your machine (you might be allowed to keep a copy of your mail) but rather it is stored centrally on the provider's equipment and you access it from anywhere there is an internet connection.
For small businesses there are many opportunities to make big savings on their total expenditure on IT in equipment, running costs and servicing, and software licences. For bigger businesses the case is less obvious because they are able to do some things very efficiently internally. However, there are still big opportunities for even the biggest organisations to procure some of their IT needs in the form of 'cloud' services. For bigger businesses, data back-up, excess demand contingency, and specialist software applications might all be more efficiently procured as cloud services than traditionally purchased and managed in-house.
For a small business, procuring cloud services can mean huge savings and reductions in risk. They need not buy a server, or run it, or impose the cost of arranging back-up, but rather buy in all of that as a service to an agreed service level for a lower and fixed monthly cost. They can purchase the use of specialist software, including accounting software, and pay for it as they use it and have it guaranteed as working and available at all times. No more nightmares about getting help to visit your office and it taking too long and it both seeming and really being too expensive to fix.
For even a good mid-size business, hiring a person to manage IT is expensive and inefficient. A much better arrangement is to get a fully defined service from a team of people that have the full range of skills and experience to satisfy all your needs. They will stay up-to-date with those ever changing innovations, and charge you for it on a fixed monthly priced contract. It is simply more efficient to run a team of IT engineers centrally for many businesses than to try to employ the same skills in a single business.
For the accountants among you, there is another big benefit to 'cloud' business models for the purchaser of the services. Typically the upfront capital expenditure is exchanged for revenue expenditure, spread out over several months.
They may be rare, but there are a few IT professionals that both speak plain English and live the philosophy that IT systems exist to serve the businesses that pay for them. The not unreasonable perception amongst most non-IT business managers is that their business and a big chunk of their hard earned cash goes to supporting a system. An increasingly important part of my work is helping business owners understand how they can use IT to improve the running of their business and cut cost. There is nothing special about IT, it is a commodity service that should be purchased to a specification for a value price. If it is all a hazy cloud then find an independent advisor to understand your need and help you procure the appropriate help.
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About the author Tim Meadows-Smith is an experienced non-executive chairman, director and business advisor, from a classical sales and marketing background gained with famous global FMCG brand owners. He has worked with businesses in Europe, North America, Asia, The Pacific Rim and Far East in the hospitality, FMCG, logistics, service and technology sectors.
