Wednesday, December 28, 2011

What is cloud computing and is it right for me?

The term “cloud computing” is everywhere these days. It’s not a new phenomenon, but rather it is continuing to evolve.

The simplest, nontechnical definition of cloud computing is using an Internet browser to access software applications over the Internet. People who use Facebook, LinkedIn, or free email services are using a form of cloud computing.

The recent surge in popularity in cloud computing is driven by the fact that businesses do not need to make a large capital investment in servers or licensing fees. In other words, the future of computing becomes subscription-based, and not ownership-based.
Like any type of business evaluation, the simplicity of subscribing to computer services has both advantages and disadvantages. Cloud computing for contractors can range from easy to complicated, depending on numerous variables.

The important thing to consider has nothing to do with technology. Instead, the starting point in the evaluation begins with how a firm conducts business operations. Companies can embrace cloud computing by understanding the five major components surrounding cloud-based technology. Those are:

1. Operational/functional standards
Every contractor has both standard business needs and unique operational functions. For example, we all need standard business functions such as email, invoicing, check writing and general ledger activity. That’s the simple part.

But we all have more customized operations that might include quoting, timekeeping or unique reporting standards such as “board foot,” “gallons per minute” or “percent of completion.” One additional function for contractors to think about is mobility and how cloud computing will impact secure access to data in the field.

In other words, data is no longer in the office. It is sitting somewhere out in the “cloud.” How a contractor accesses, manages and utilizes that data will become the key in deciding when and how to use cloud computing in the business.

The important issue to understand before moving to the cloud is whether those established functions might change or even be eliminated. Moving to the cloud without conducting enough due diligence may result in a loss of control within the organization.

2. Cost
Most cloud computing solutions have a monthly subscription fee. That’s a huge advantage, because contractors no longer face large capital expenditures for hardware, software or licensing fees.

However, there may be hidden costs that are not obvious. Those costs could range from something as simple as data retrieval to something more significant like purchasing additional bandwidth to handle increased Internet traffic. Most information technology professionals agree that cloud computing will not be cheaper in the long run.

3. Security
A company’s most valuable business asset is its data. All of that data – such as invoices, drawings, spreadsheets, proposals, customer lists or email correspondence – is a critical, ongoing concern.
Admittedly, there are security risks when the infrastructure and data are managed in-house. But once that data is moved into the cloud, companies expose themselves to different forms of security risk.

Companies need to consider an entirely different approach to data security. If a firm deals with government agencies or HIPAA customers, this will add an even greater level of concern.
Knowing who has the keys to the kingdom is an important consideration when evaluating cloud solutions. It requires careful attention to make sure data does not end up in the wrong hands or subjected to a higher risk of hacker attacks or virus infections.

4. Service
When managers think of customer service, they might compare cloud-based solutions to “self-service” environments. That means service may be lower than the company needs.

Even as cloud solutions improve in speed and reliability, customer service will always be needed. It would be unrealistic to believe that cloud-based computing will eliminate end-user incidents or questions. Help desk issues will more than likely still exist after a shift to the cloud.

Understanding the level of service provided by vendors will be important. An IT adviser can help determine whether customer-service levels will be satisfactory.

5. Timeline
Time can change everything. There will be changes in cloud computing. Hopefully, risks will be mitigated and service levels will improve. But no one knows for sure how this trend will unfold.
The act of moving data and operations to the cloud does not need to be rushed, especially if investments have been made already in servers and licensing.

The best way to think about cloud computing is in the same way as a purchase of a large piece of business equipment. That usually begins with evaluating viable equipment, the features and benefits different vendors offer and what best suits operations.

Fortunately, there are qualified IT professionals who can help guide companies in the selection of a technology vendor that can match their operational needs. Technology is a tool that serves the contractor.

About the author:
David Murray is CEO of Convergence Networks. Contact him at 503-906-1539 or at

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