Cloud computing – overview
Cloud computing involves accessing IT resources (such as applications and storage) over the internet rather than having them on your own PC or network. Instead of buying a new, bigger disk drive, you simply rent a bit more disk space; instead of having to struggle with installing and upgrading software, you let a cloud computing provider take the pain. All you have to do is log-on to use it.
Cloud computing promises flexibility, efficiency and cost savings. For smaller businesses who have trouble justifying a fully-fledged in-house IT department, it gives you access to the best and latest technology and support with minimal management overhead. And, of course, this access is enhanced through the communications speeds offered by Superfast Broadband.
What does the technology do?
Cloud computing provides on-demand IT resources. Just as you know that unlimited amounts of water will flow out of the tap when you turn it on, without having to worry about the infrastructure of reservoirs and pumps and pipes, when you use the cloud you don’t need to care which particular server in a remote data centre holds your data.
All you need are PCs and the type of fast internet connection provided by Superfast Broadband. You connect to your cloud service provider, and use applications and files in the normal way – the only difference, more or less invisible, is that they are not actually on your hardware or your network, but on the service provider’s.
The cloud can replace part of your in-house IT resource, or nearly all of it. Some users prefer to employ the cloud only for a few functions, often for data back-up and disaster recovery, while keeping applications and live data on their own network.
Others go much further and access their day-to-day business applications such as spreadsheets and databases from a cloud provider. This is often called ‘Software as a Service’ or SaaS.
It’s also possible to develop your own applications on the cloud, using ‘platform as a service’ or PaaS providers such as Amazon’s Elastic Compute Cloud (EC2). They provide the underlying technology, and your IT staff build applications on that. Some large organisations even operate their own ‘private clouds’, although in this guide we’ll be concentrating on the ‘public cloud’ that’s available for any business to hire.
At a simpler level, many of us have used the cloud without knowing it. For instance, the applications offered by Google Apps or Zoho are examples of cloud computing, as are the various email providers accessed through the web, or the Spotify music service. Meanwhile, at the other end of the scale are specialised business applications in SaaS form such as Desk.com for customer support or Salesforce.com for customer relationship management.
Business benefits of cloud computing
Some benefits of the cloud are very concrete and immediate, while others are more strategic.
Cost savings are a major attraction for many: using IT resources in the cloud can quite simply be much cheaper than owning them. When making this calculation, however, it is important to consider not just the direct costs of acquiring technology versus hiring it as a service, but also factors such as maintenance and staffing costs, expenditures made in the past on in-house systems that are still functional, and so on.
You will also still need some kind of in-house IT function even if your business moves entirely to the cloud, to manage the relationship with the cloud vendor and the basic technology that must remain on your premises such as PCs and a local area network.
However, operations and support expenses can be expected to drop dramatically. With the move from a purchasing to a hiring model, the majority of IT costs will also cease to be capital expenditure and will instead become operating costs in the form of regular fees to the service provider. This means, too, that costs are more closely aligned with usage; you are not continually subsidising kit that lies idle most of the time, or spending large amounts on software applications that will only get fired up once a year. You pay for what you use.
However, the cloud’s impact on the bottom line is not limited to IT budgets. Over the long run it may improve agility, flexibility and efficiency, by allowing you to have precisely as much IT resource available as you need at any given time – and by letting you concentrate on your core business and your customers rather than on the minutiae of IT.
After all, the resources available to you in the cloud are effectively unlimited. To meet the needs of all its clients the cloud provider will have far more computing power than any individual customer will use. So if your requirements increase – even temporarily, perhaps if you need to run much bigger spreadsheets than usual at annual accounting time, or to get a new project off the ground quickly – you simply request extra. Typically this is provided automatically and instantly, so it really is as straightforward as opening the tap further to draw more water.
Easier maintenance and upgrades
Another benefit which many small enterprises welcome is that the cloud provider has full responsibility for purchasing, installing, upgrading and maintaining equipment and software. No longer do you need to deal with ailing hardware, or spend time installing updates. When you turn that tap, you can be sure of getting the latest IT tools, fully functional.
Other benefits include easier remote working – if an application is in the cloud, accessing it from home or via a mobile device is just as straightforward as from the office – and, potentially, more environmentally friendly computing, as resources in the cloud service provider’s data centre are efficiently shared among multiple customers.
Getting the most out of cloud computing
Remember – it’s about IT resources - The cloud is a way of providing IT resources, not a technology in itself.
Don’t forget working in the cloud still needs managing - The cloud reduces day-to-day fiddling with IT, but it still needs overall management.
Consider new opportunities, not just a replacement of existing services - Don’t see the cloud as only a replacement for existing IT. Does it make new tools and technologies available to you, too?
Monitor your on-premise and in-the-cloud activities - Keep clear records of which IT functions are happening in the cloud and which are in-house – and where data is stored.
Check thoroughly before going live - Thoroughly test how your in-house IT will interface with cloud services, and how data will be migrated, before going live.
It’s not just about your IT department - Remember that moving to the cloud will affect – and empower – many parts of the business, not just the IT department.
Go for a phased migration and keep moving forward - Start small, but think big.
In practice, gaining the benefits of cloud computing will probably not involve handing your entire IT operation to a cloud provider overnight. So it’s necessary to formulate a clear plan setting out what’s required from a provider, and how its services will relate to those aspects of IT remaining in-house.
What to put in the cloud?
The most basic issue to consider is: what should go to the cloud? You can buy anything from pure hardware functionality such as disk storage, to a PaaS development platform allowing you to build your own applications in the cloud, to fully operational software on the SaaS model. The patterns and costs of your business’s IT usage will help determine what can usefully be farmed out.
Particularly if opting for a SaaS solution, you’ll need to check how far it can be customised to your needs. Consider, also, how those systems that remain in-house will interact with those in the cloud. For example, if HR is on a SaaS application but payroll is staying on your own computers, the two will have to talk somehow.
Migration of data from your systems to the cloud – especially if it is held in antiquated or bespoke formats – and out again, in case you one day decide to change service provider or leave the cloud altogether, needs to be looked at too.
Evaluating your options
You can then start evaluating cloud providers, bearing in mind that you are not restricted to choosing only one: if you have several different uses for the cloud, it may be that different providers can serve them best. Most often, you will deal with the providers directly, though some cloud services are available through IT reseller channels.
There are some well-known firms in the field – but because it’s relatively new, many equally competent providers are not so familiar, so buying on brand name alone is unwise. Consider costs, of course, but also performance guarantees in the form of a service level agreement (SLA) which specifies the time that the cloud service is online and fully functional: typically an SLA will be for 99.9% or above.
Security is another key consideration. The cloud provider’s data centre, like any other, is vulnerable to cyber-attacks – although its security measures will probably be better than most small businesses’. But there may also be privacy and regulatory compliance issues, especially if you are storing customer data on a cloud provider’s server or if the provider is located overseas. Back-up and disaster recovery plans should be discussed.
New opportunities for your IT staff?
The role of your own IT department may also need to be redefined. The more you employ the cloud, the more your IT specialists will shift their attention toward developing policies on cloud usage, planning for efficient exploitation of the cloud, and monitoring both the cloud’s performance and its interface with in-house systems. New skills and training may be required to meet these challenges; but as we mentioned, you may also find that IT personnel are freed up to work on new projects. Staff resistance to the cloud is sometimes encountered, especially when a loss of control over IT is feared, but can be overcome by explaining the benefits of the move.
Finally, plan to review your cloud computing strategy and providers on a regular basis. This is one of the fastest-developing areas of IT, and new solutions are appearing regularly to make the cloud more productive, efficient and cost-effective for your business.
Cloud-Based Software Solutions
Starting a business on a shoe-string may seem like a daunting prospect, but the revolution in cloud-based software means businesses no longer have to spend a fortune on software systems. Low-cost (and often free) online applications offer businesses the opportunity to become more productive, and remain agile as they grow without investing heavily in software licenses or bespoke solutions.
It’s not the right route for all companies, but if all you need is to perform the key tasks any business needs (such as communicating, storing and managing information, and managing people and teams), there are a vast array of options out there. We’ve listed just a few of the most popular below, but it’s worth exploring the full range of possibilities to find the right tools for your business.
1. Google Apps
The suite of products under the banner ‘Google Apps’ offers many of the basic functions your business might need – company email, calendars, file storage, contact management, and the ability to create and collaborate on documents, spread sheets and presentations using ‘Google Docs’. Integrating with Google+ means you can also host online meetings in ‘hangouts’. All of this is offered at a low monthly subscription rate. Great if you already use Google products, as it offers excellent integration. www.google.com/apps
Ever note is the 21st Century take on the notebook. You can make notes in text, audio or visual formats, file them in notebooks, tag them for easy searching and share them with collaborators. Free for basic users or with an annual subscription for pro features. www.evernote.com
If you like ticking off items on your to-do list, Asana may be perfect for you. It allows you to create everything from a simple task list to a complex project involving multiple deadlines and team members. It’s a great way of managing your own workload – and the work of others in your team. www.asana.com
The classic option for cloud storage and sharing, Dropbox still offers some of the best features, and you can gain an enormous amount of space for free. Use it as a back-up, or to keep all your documents, images, video and other files in order…and if you set it up to auto-sync, the images you take on your smartphone or tablet camera will automatically upload to the web and be waiting for you when you get back to your computer. www.dropbox.com
If you send email newsletters, offers or other bulk communications to customers, Mailchimp is a really simple, easy to use way to get professional email marketing results. Its drag and drop interface lets you create great looking, fully featured emails that work on all screen sizes quickly and easily, and its management infrastructure will help you manage your data and make sure you stay legal and ethical in your communications. www.mailchimp.com
If you organise events for your business, an event management application like Eventbrite could save you a huge amount of time and effort. Just set up your event online, then link to it or embed their booking widget in your web site. Eventbrite allows you to gather key data (and payments) from attendees, contact them, produce badges, registration lists and more, all from a single online interface. www.eventbrite.com
Managing multiple social media profiles across different platforms can suck away your time in a small business – that’s where a social media management tool comes in. A good choice is ‘Hootsuite’ which allows you to set up, monitor and manage your profiles on Facebook, Twitter, Linkedin all from the same window both on your mobile or in the office. There are other similar options in this space, however, and it’s also worth checking out ‘Bufferapp’ which allows you to store up social media content for later, drip feeding it out at the times you specify. www.hootsuite.com
If keeping track of your expenses is the bane of your life, you might want to try an expense tracking app like Expensify. With mobile apps for all platforms it enables you to scan in, email in, import in, or record your own expenses, linking with accounting software and other apps like Evernote. www.expensify.com
If you’re setting up a web site for your business, it’s worth looking at open source systems like Wordpress, which are free to use and constantly updated. Although Wordpress started as a blogging platform, it is used by many major companies as the platform for their main web site. You can choose a ready-made template, or work with a developer to create a bespoke template for your business. www.wordpress.org
10. Accounting Packages
Doing your bookkeeping online can really help you stay on top of your finances, with the added benefit that you can allow your accountant to access the information remotely. However, there are so many options when it comes to your accounts that it’s really worth talking to your accountant before you make a choice. Many accountants will like to work with a specific package, but some to check out are: Kashflow, Xero, QuickBooks, Freeagent, Quickfile, and Freshbooks. Some are free, some will charge, but finding a system that works for both you and your accountant is crucial. For some useful reviews and comparisons see www.accountingweb.co.uk