Cloud busting, by John Thornton

3 Mar 11
There's a lot of hype about cloud computing but also some clear advantages if you know what you're looking for - from cheaper software to data savings

There’s a lot of hype about cloud computing but also some clear advantages if you know what you’re looking for – from cheaper software to data savings

A chief executive of a medium-sized charity recently told me: ‘We need to get into the cloud and I want us to get there as soon as possible.’ Is he right?

You can’t fail to have seen the hype and advertising around cloud computing. It is revolutionising the way that ICT services are provided and is promising to reduce radically the costs of using technology. Can it really deliver the benefits that are claimed?

Cloud computing is a broad term that is used to describe the provision of technology services over the Internet. It is not new and the chances are that you have been using it for years with services such as Amazon and Yahoo mail.

Now many organisations are using it to access software services such as Customer Relationship Management, Enterprise Resource Planning and office applications.

Others are using it to provide a platform of services that supports multiple applications and a range of development tools.

Also, some suppliers are dressing up traditional outsourcing services in the clothes of cloud computing.

The biggest benefit claimed for cloud services is that you pay for the services that you use rather than paying to set up and run data centres, which are often under-utilised.

Also, because suppliers are providing services to a large number of clients using modern technology, they can achieve economies of scale and offer services at much lower costs.

The result is that cloud computing is a very fast growing sector – leading analysts predict that expenditure on it will double between 2010 and 2014.

Westminster City Council is an early adopter of cloud services and plans to be infrastructure-free by 2015, meaning that it will not operate its own data centres to support its IT needs. It has already achieved 60% of this target, enabling it to shut down the data centre in City Hall.

The attractions for the third-sector chief executive who approached me are clear. He sees a future where he doesn’t need to maintain servers and software, he won’t need most of his IT team and he can shut his data centre. Is it that easy?

The first step is to be clear about what you want to achieve. You need a strategy that takes full advantage of cloud sources but you also need to understand how the different sources can be integrated to provide the access, availability and security that your organisation needs.

Sourcing in the cloud therefore becomes a much more technical procurement. You might for example take all services from one supplier. Most likely you will need multiple suppliers, perhaps taking desk-top, finance, and document management systems from different sources, which means that you will also need integration services.

You must also decide whether you want to use the Public Cloud or operate within your own private cloud. With the former, you access standard services such as Google Apps for desktop services or for CRM. With the private cloud, the supplier creates your own private virtual data centre to run and integrate the services you need.

You will also want to know how easy it is to move to another cloud supplier, when you need to re-tender.

Most importantly, you will want to know about security and where your data is geographically held. It is highly likely to be held overseas and many governments assume the right to see or intercept all information held and processed within their borders, as in the USA Patriot Act.

The future definitely lies in the cloud but the transition needs careful thought and planning.

John Thornton is an independent adviser and writer on business transformation, financial management and innovation.  [email protected]

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