With Expanding Demand, ‘Cloud’ Cover Swoops In
Cloud computing can be a complicated topic to grasp. But it's a technology that experts say businesses looking to shrink their costs and grow their bottom lines need to consider.
Cloud allows businesses to get rid of what can be large, costly servers and data centers, usually moving their applications to a public server, and accessible anywhere through the Internet. Some of the public clouds are from well-known web companies like Google. Some companies also utilize private clouds developed for them, or a little of both.
Cloud is a market that Framingham-based IDC says will grow from $18.4 billion in 2011 to $43.2 billion by 2016 as companies become more aware of the technology and its benefits.
“From an economics point of view, you want to do it for a business because it's just far less expensive to have on demand,” said Peter Brady, CEO of consulting firm Anvil Cloud Computing of Douglas. He said information is still kept on servers, but “there are actually, at the end point of clouds somewhere, a bunch of servers. It's just done on such a large scale that it's a smarter way to do it.”
Eileen Smith, program manager of global technology and industry research organization at IDC, said companies are boosting their bottom lines and productivity with cloud technology.
Savings For Small Firms?
“For smaller companies who don't have IT staff in house, it's a lot easier to use an application on the cloud as opposed to supporting and running it yourself,” Smith said.
Companies save time and money because maintenance is outsourced to firms that handle the application, helping businesses avoid expensive software updates of desktop computer programs. Instead of a business having to purchase what can be costly software with upgrades, users on the cloud get updates automatically when they're available.
That's the case at ikaSytems of Southborough, which works with health systems, plans and health care conglomerates to improve their administration and operations.
The company develops cloud-based products that include software as a service — or SaaS — one of three types of cloud products. With the SaaS product, there's a basic software on the cloud that clients can access and customize. Brian Kim, vice president of account management, said it reduces costs for health plans because ikaSystems maintains the program, cutting the need for new code.
Anvil offers platform as a service (PaaS) OrangeScape, based in India. It's a development application that doesn't require programming and can be used on any cloud with the click of a button. Brady said it gets a company's application up and running faster, because it requires much fewer steps than programming a new application would.
“It's really not a question of whether or not it's the time (businesses) should come to us. They should address this immediately for their own survival,” Brady said.
He said the push toward mobile devices adds to the reasons businesses can benefit from cloud computing.
“If everybody's going to access the information on their mobile devices, they're not going to be in your server. They need to be in the cloud,” he said.
Smith agreed that mobility and social media are spurring firms to move to the cloud. She said that as pressure builds for businesses like hotels and entertainment venues to connect with customers through social media and mobile apps — which are cloud-based —businesses are investing more in cloud resources.
But not all companies are ready to fully jump into the cloud. Nicos Vekiarides, CEO of TwinStrata in Natick, said some companies want to start to leverage the cloud, but have major investments in IT; others feel the need to keep applications within company walls. So for them, utilizing cloud storage is a good solution. He said cloud storage is an easy place to start a cloud implementation because every organization has storage needs.
“They may have IT staff but they're not looking to grow that staff, (and) in the meantime, their needs keep growing,” Vekiarides said.
He said companies often devote 60 to 70 percent of their IT budgets to maintain infrastructure, which includes daily data backup and ensuring hardware, software and networking equipment are functioning properly.
“So all of that creates this treadmill, if you will, of constant maintenance,” he said. That's maintenance that can be outsourced through cloud storage. Vekiarides also said it allows companies to analyze data quicker, which can improve decision making.
The biggest reason businesses are hesitant about the cloud is security, but experts say it can be just as secure as on-site data storage, if not more. Vekiarides said cloud storage allows for disaster security that on-site storage cannot, as information is saved to secure servers instead of being on tapes or other media that can be exposed to theft and other hazards.
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Image credit: FreeDigitalImages.net.
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