Over the last twelve months, one of the big buzz words in business system computing and accounting circles has been 'The cloud', although it has actually been around for ten years or so – a delivery model for IT services where business applications are provided via a web browser with software and data stored remotely 'in the cloud'.
The overarching goal of cloud computing is to provide easy, scalable access to computing resources and IT services. It can be either public or private. Commercial public cloud services are sold on demand on a subscription basis and are fully controlled by the providers.
This means that for end-users there is potentially no requirement to spend on IT equipment and software. All that is needed is a computer and internet access. Users rent 'the cloud' space and/or relevant applications and access these remotely from wherever they may be.
There are essentially three service categories available to users: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS).
With the SaaS model the hardware and software is provided by the hosting company and services can include anything from web-based email to accounting and CRM.
In the main, there are two schools of thought about the viability of 'the cloud'. The first is that it is certainly not the future and that 'the cloud' has no compelling case. The second, more progressive view, often highlighted by more technologically savvy types is that 'the cloud' is the best development for many a year and has a wide array of benefits for business.
The debate has caused a certain polarisation of views. Commercial cloud proponents are missionary-like in their zeal and promotion of their services, whilst the sceptics proclaim weaknesses in the cloud model, supporting more traditional 'on-premise' systems for businesses. In a recent article entitled 'How cloud computing is like the credit crunch' a Gartner analyst VP called it "over-hyped, complex and potentially toxic". A January 2010 survey by CommVault of 535 companies of all sizes showed that, whilst 52% stated they would consider cloud at some point in the future, 75% expressed concerns about moving to a cloud storage model. Security/privacy were the biggest issues, with 30% of participants considering them as their number one issue.
My own view is that it is very much a matter of horses for courses, but that perceived control of information and concerns about security will remain key factors for those so adamantly against 'the cloud'.
A major issue often raised is appropriate protection of user data. One concern is that cloud providers themselves may have access to customers' unencrypted data. In addition, service providers may not have appropriate physical or network security measures in place. These concerns are major obstacles to broader adoption of cloud computing.
Part of the problem is that cloud advocates do not successfully get across the main features and benefits and the added-value that cloud computing can deliver, especially for micro businesses such as plumbers, electricians, decorators etc or some SMEs. They have failed to do justice to their cause and their approach can often be seen as patronising when dealing with non-IT professionals or clients.
The main commercial cloud SaaS benefits are that:
Some issues with commercial cloud SaaS are that:
It is worth remembering that there are various alternatives to SaaS hosted solutions – for example, a business could rent their own server in the cloud and run their desktop applications on it so these could be accessed from anywhere. This would be classed as IaaS or PaaS.
Or a business could merely use their existing in-house server and give people access to it and their desktop via a password and log-in.
Alternatively, Citrix offers its GoToMyPC which lets you access files, programs, email and networks enabling you to take your office with you no matter where you are. It works with almost any operating system through a secure, private connection.
Citrix XenApp Fundamentals is aimed at small to mid-size businesses with up to 75 remote users and allows them to securely access applications and files from anywhere at anytime – in essence a private cloud.
Increasingly, mobility is very important to the way that business is being done and what users need is a balance between portability and a reasonable size of real estate to work with e.g. a small laptop or a portable, pocket-sized computer, perhaps with a roll out screen to allow maximum usability. A consistent level of IT functionality is also necessary – people need their business services delivered to them at any point, and in any location.
The cloud debate is certain to continue for some time to come, but it should be remembered that whatever the arguments on both sides, customers vote with their feet. At the last count that I saw, the three biggest players in the micro-business and SME accounting space (excluding Excel!) were Sage, QuickBooks and TAS with about 1 million customers between them (about 75%, 15% and 10% respectively). I would hazard a guess that more than 50% of that 1 million was acquired in the last 10 years or less, i.e. over roughly the same period that the SaaS/hosted service solutions have been around.
It would be helpful to compare these figures with the number of customers using each of the well-known UK and Irish hosted cloud accounting solutions. At the very least we would get a better idea of the rate of adoption and, assuming reasonable numbers, this would give a lot more credibility to their proponents. Unfortunately, no publicly available figures have yet been forthcoming. I suspect the debate will continue for some time and we are years away from a wholesale shift by business to the public commercial cloud. On the other hand, use of private clouds seems less controversial and so faster adoption rates may occur.
Gartner: http://www.silicon.com/technology/networks/2010/02/02/how-cloud-computing-is-like-the-credit-crunch-39745415/
In-depth: Clouds on the horizon: http://www.microscope.co.uk/news/in-depth-clouds-on-the-horizon/
CommVault research:
http://news.commvault.com/press/000476_CommVault_Survey_Reveals_Growing_Interest_in_Cloud_Storage_Amid_Security_.asp