Silver Lining

The newest buzz word in modern business technology is cloud computing. Cloud computing is really a broad term to describe a growing group of web based services that allows businesses to save time, money, and headache by abstracting their hardware, software, and licensing costs out of house.   How this abstraction occurs and the possible avenues that business can pursue is a topic that we will explore in a later post.  There is alot of buzz right now regarding cloud based technologies; however,  if you ask most technology consultants it’s hard to get a clear idea of what it really is and what it can do for your business.  There’s a very good reason for this.  Either:


1) They don’t understand or know how to implement it,
2) They’re afraid they’re going to lose billable time if they move you over to a cloud based solution.

Don’t let ignorance stop you from saving money.  Companies that are switching to cloud based solutions are saving 50-75% on their yearly hardware and IT expenses. It’s not an end all be all answer, but it’s an option you need to understand and consider.

So what is Cloud Computing ?

In its simplest incarnation Cloud Computing is the practice of moving your physical hardware – servers, storage infrastructure, IIS services, etc.  to a remote hosting service. Essentially, instead of you having a hundred thousand dollars of hardware and software on site in your office you pay a monthly or yearly fee to rent these resources. There are more advanced concepts involved in Cloud Computing. However, to really wrap your head around how this can benefit your business, just think of cloud computing as a technological municipal service, providing you what you need when you need it, all while saving you money.

Let’s look at how this can save you money if you’re setting up infrastructure for a start up business. You’re setting up a small to medium sized business that’s going to need a large database for tracking cases, inventory, sales . . . whatever. Along with this you’re going to need some kind of  file management system. Right off the bat you’re looking at –

1) $5,000 – $15,000 for a server
2) $2,500 dollars for SQL server standard ($30,000 a socket if you want enterprise edition)
3) $5,000 – $10,000 for server racks, cooling, switches, battery backup

The list goes on …
or …
You can purchase desktop computers for your employees, internet service, a switch, and some LAN cable and spend $1,500 for the year to lease a comparable cloud based server. Now let’s say you find that you need more storage for your server, if you have an on-site server you’re looking at $4,000 – $10,000 for a raid subsystem or $100,000 if you want to run a SAN, (storage area network) not accounting for setup costs. Conversely, to add storage to your Cloud based server you simply click a button, and boom you just added storage for as little as .15 cents a gigabyte.

How is this Service Provided ?

Because hosting companies can spread their costs across hundreds or thousands of users they can afford to buy the best hardware and lots of it. This allows them to pass the savings back to the user, allowing you to use state of the art technology for pennies on the dollar.

The real Silver Lining

Never upgrade again. One of the biggest problems with conventional on-site hardware is that you’re spending a ton of money for stuff that you’re going to have to toss to the curb within the decade. Going Cloud based allows you to eliminate expensive upgrade costs, just let the hosting company worry about it and you’re good to go.

The Dark Side of the Cloud

Moving your infrastructure is not all sunshine and roses. There are some disadvantages to using a cloud based system.

1) You’re giving away a certain measure of control. If your computers aren’t working and you call me and you have an on-site server, great, I come and it turns out the cleaning guy unplugged it, fixed. You give this up on a Cloud based system, you’re losing the power to physically survey your hardware. This is becoming less of an issue with the better hosting services that are available because they have several levels of redundancy to stop issues like this from happening. Some of the larger services will actually have running instances in 4 physical locations, so even if there were fires in three locations you could still work.

2) Hardware Dependencies. With a little research and foresight you can usually avoid most compatibility issues. 90% of conflicts are usually failure to do your homework. However, you won’t know if certain software will work with the hardware of your hosting company until you test it.

3) Security Vulnerabilities. This is becoming a moot point, but it is still an issue of concern. Most hosting companies will have better security in place than you will ever have on your on-site server. However, if your business involves information that is of particular concern there are issues you have to consider. For example, the Stored Communications Act recently allowed the FBI to access data without a warrant or consent. Also, the under Patriot Act the US government can ask any US company for access to data they hold\host and the Hosting Company is not even allowed to tell the data owner they have done this. So if your cloud is US based – it’s fair game. This means that if you have data that is of absolute high security you are still better off on an in house close circuit system.

The Bottom Line

Cloud based computing is changing the face of how we organize our IT infrastructure; don’t be left behind. What would you do with an additional $50,000 in your budget next year ? If you have any questions about, or are considering moving your infrastructure to a Cloud based system feel free to contact me today for a free consultation.

David Wetherell