Pros: When Cloud Computing Makes Sense
According to Greg Doud of Cincom, the following are the most compelling reasons why cloud computing may make sense for your enterprise.
• Reduced cost - When you have your application running in the cloud, your IT staff doesn't have to worry about servers, networking and operating system software support. Those things are being taken care of by the cloud provider.
• Mobile computing - Most companies have complicated security protocols to keep people from getting into their network; but that is just what the mobile users need to do! Access authorizations are taken care of effortlessly in the cloud.
• Cash flow - When deploying a large system on-premise that requires multiple servers and software, a large, up-front cash outlay is also required. When using a cloud, normal charges are billed on a monthly basis as an operating expense rather than a capital expense. This improves a company’s cash flow.
• More robust environment - Cloud providers build their infrastructure to support high-speed, load balanced environments. This means that running in the cloud allows a company to quickly scale up their application without a large additional investment, or scale down and only pay for what’s needed.
• Increased response times/decreased outage risks -Most large cloud providers have multiple data centers in various parts of the world. This allows a company to deploy their applications and data closer to the end-user than when servers and software are in the company's data center. This means better response times and decreased outage risks.
• Faster start-up and time-to market with a SaaS-based enterprise application - With a cloud offering, you can get started much faster than with one that requires you to obtain your own hardware and software.
• Nothing to install - Enough said.
• Freedom for the line-of-business manager – Cloud based applications are paid for from operating-expense(OPEX) budgets, which frees up the line-of-business manager to pay for just what they need. They also are free from the lengthy and often complex capital expense (CAPEX) budgeting processes that IT departments have historically relied upon.
• Greater flexibility in defining workflows – Cloud applications are more adept at being configured from a workflow standpoint since they are designed for rapid updates and customization.
• SaaS-based integration is accelerating – Many enterprises are now integrating their quoting, proposal and pricing systems directly into their CRM systems, including Microsoft CRM and Salesforce CRM. This is rapidly driving up adoption rates since sales professionals are using these applications while within a CRM working session—all in real time
Cons: When On-Premise Works
However, according to Doud, in some instances, on-premise deployment may be right for your company. When might that be? When you’re concerned about:
• Total cost of ownership (TCO) - Paying a low monthly subscription for software certainly helps a company's cash flow. However, over the long term, the software does become more expensive. For example, suppose a company is looking to purchase some software for $3,600, or they can pay $100 per month. After three years, the amount paid for the subscription is identical to the purchase price. But after those three years, the subscription will begin to cost more than the purchase.
• Outside risks - When software is hosted on-premise, everything resides within the walls of the company. When it is hosted in the cloud, the cloud provider has access to and control of the hardware and software. If the cloud provider’s security controls are not as robust as those of the company, the risk of failure can be greater.
• Data control - The US Patriot Act requires some companies to keep their data within the boundaries of the United States. This limits some of the flexibility that cloud providers allow in terms of deploying applications close to the user. Additionally, having an on-premis solution may make sense when you need to keep sensitive or regulated data local.
Finally, these questions should help you develop a strategy to best decide what’s right for your organization.
1. Where are the hosting facilities and backup data centers located?
2. Who owns my data once it’s transferred to the hosting facilities?
3. Will my data be used for data-mining purposes?
4. What’s your disaster recovery plan? Your up-time percentage?
5. Do your facilities have industry-recognized security features (such as data encryption)?
6. How long will implementation take and what does it entail?
7. Do we need any hardware or software installed on-site and what do we need to look at regarding our ISP?
8. Will the add-ons and other services I’m currently using be available in the cloud?
9. How is our data returned to us if we decide to move back on-premise?
10. What is your company’s history and experience in this area?
11. Can you provide references?
12. In your experience, what do you see as the benefits and risks of moving to the cloud that are specific to my particular business?
13. Can I shut down portals as needed and only pay for what I use?
14. What can I expect to save with a cloud model vs. an on-premise solution?
The Bottom Line
15. Why should I select you as my cloud computing provider?