What is “the Cloud”?

Great reading from our friends at msmbnetworks.


What is “the Cloud?”


September 3rd, 2013 by Christopher Wright


Cloud computing has changed the way Sonoma County businesses have managed both internal and customer-facing resources, from email and websites to payroll and shopping carts. Is making the jump to cloud-based right for your company? With so many products and services being called “the cloud,” it isn’t an easy question for business owners to answer. This month we are focusing on the opportunities and risks remote hosted services provide, starting with this article where we explore exactly what it is to say “the Cloud.”


Many local companies do not have their own email or website servers, preferring to let others handle the hosting management. In a very real way these everyday services started the trend toward paying an outside provider to provide public-facing internet technologies. By paying a hosting provider to maintain the hardware and software on which your website and email reside you are freeing your own budget from the sometimes costly overhead of managing your own server and firewall. In more recent years, hosted services have expanded from simple email and websites to whole network management suites, virtual servers, customer-tracking tools, accounting packages, and much more.


A large draw for many users of cloud-based services is always-on connectivity. Most providers include a service-level agreement (SLA) in their contracts, guaranteeing that the product or feature will be available upwards of 95% of the time. They are able to achieve this through redundant hardware, virtualized environments, replicated servers, and other technologies that, while valuable on the small-scale, are often cost-prohibitive for small or medium businesses to manage themselves. This high-availability makes for an attractive option for many services such as billing, customer management, and payroll management, where downtime can cost hundreds if not thousands of dollars.


Often called “on-demand” software, many cloud providers offer Software-as-a-Service (SaaS) features, where their customers rent or pay for access to specific software packages which may be prohibitively expensive on their own. For example Microsoft Office Professional 2013 may cost over $400 for a single computer, making upgrading an office of 30 workstations exorbitant. Many cloud providers offer access to this software for as low as $10 a month, reducing the up-front costs of upgrading and often allowing for offices to be unified in their software, promoting greater productivity across your entire workforce. Not just limited to office applications, everything from Quickbooks to Photoshop and more arcane or industry-specific software such as ArcGIS may be offered by an SaaS provider.


In addition to large companies providing cloud services, such as Amazon, IBM, and Google, many businesses construct and manage their own private or internal cloud solutions to allow for increased reliability and scalability across their network. Many advances in virtualization, software replication, and network management have allowed more cloud-like features to be hosted on-site or in-house, providing many of the above benefits without many of the below drawbacks. Today there are dozens of well-known cloud service providers, and so pricing is often extremely competitive as these companies vie for your business.


There are three primary drawbacks with cloud computing, with a fourth worthy of note. These are: data availability, ongoing cost, network congestion, and data privacy.

• Some times even Google has a dark day, such as last week when all Google services, including it’s main web page, went down. No matter how much replication or redundancy a cloud provider has in place, accidents and disasters do happen. Unlike when a local server errors or shuts down, you are unable to have a technician repair or replace the part that same day, and your business-essential services may be down, with no predictable return time, leaving your workers stranded. Every major cloud provider has suffered full outages, including some that affected every customer nationwide. A careful balance must be struck between offloading services to a remote provider and keeping the software necessary for the management of your company available.

• While for many hosted software solutions the monthly fee may be low, with per-user setup fees and ongoing contracts, over the term of the agreement you may end up paying more for the software than if you had dealt either directly with the company or purchased it outright. In the above example with Microsoft Office it would take nearly 40 months for a hosted solution, ignoring setup or additional user fees, for the SaaS service to cost as much as a retail copy of the software. However, many businesses are still using Microsoft Office 2003, a full 120 months after its release. It is very important to manage your ROI calculations when deciding on a SaaS provider and contract terms.

• A problem plaguing many Petaluma- and Santa Rosa-based businesses is slow internet speed. To use remotely-hosted services, more and more traffic must be passed over the internet in both directions, as users download information and send it back to the cloud. A slow or intermittent internet connection may drag or become unusable beneath the strain of these additional services. When deciding whether to migrate to the cloud a careful examination of the office internet needs should be performed to ensure the right connectivity is available for the number of users and services planned.

• There has been much news made lately of the US Government’s hand in domestic spying, including its once-secret agreements with cloud-based software providers. It is up to each business owner to decide whether they feel comfortable trusting another company with their data, and whether that trust extends to the governments, advertising agencies, and others who may do business with the provider.


“The Cloud” is a marketing buzzword to describe services and products that have existed for years, which have grown both in scale and popularity in the past few years. There are many cloud providers and services available, not all of which have been discussed here, which may or may not be the right choice for your business. We love helping local companies explore options for growth, and think a full understanding of this emerging and expanding technology is necessary. Do you have questions about the Cloud? Email us and see what is right for your company!


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