As you read this post, keep in mind there is no “perfect” solution. All options – be it an in-house network or a cloud solution – have both upsides and downsides. Your selection has to be determined on a case-by-case scenario before you can come to a complete conclusion on which option will work best for you. (Warning: Do not let a cloud expert tell you there is only “one way” of doing something.)
Some companies end up with a hybrid solution where some of their applications are in the cloud and some are still hosted and maintained from an in-house system. We discuss more about these options in our post Different types of cloud solutions explained. Here are the general pros and cons of cloud computing:
Pros Of Cloud Computing:
- Lowered IT costs. This is probably the single most compelling reason why companies choose to move their network (all or in part) to the cloud. You'll save money on software licenses, hardware (servers, laptops, and workstations) as well as on IT support and upgrades. In fact, we save our clients an average of 20% to 50% when we move some or all of their network functionality to the cloud.So if you hate constantly writing big, fat checks for IT upgrades, you'll really want to look into cloud computing.
- Ability to access your desktop and/or applications from anywhere on any device. If you travel a lot, have remote workers or prefer to use an iPad while traveling, a laptop at your house, and a PC from the office, then cloud computing will give you the ability to work from any of these devices. This benefit of work any time, from anywhere, on any device, consistently ranks as a top 3 benefit from all client and market surveys TOSS C3 conducts.
- Disaster recovery and backup are automated. The servers in your office are extremely vulnerable to a number of threats including viruses, human error, hardware failure, software corruption, power outage, and, of course, physical damage due to a fire, flood or other natural disaster. If your servers were in the cloud and your office was reduced to a pile of rubble, you could purchase a new laptop and be back up and running immediately. This would NOT be the case if you had a traditional in-house network and were using tape drives, CDs, USB drives, online backup services, or standard disk to disk devices to back up your system. Synonymous to a public utility, cloud platforms are far more robust and secure than your average business network, because they utilize economies of scale to invest heavily into security, redundancy, and failover systems making them far less likely to go down. This in itself is a budget saver. The dollars being spent now on backup services, tapes, and the cost of downtime when a recovery is required, are all returned back to the bottom-line.
- It's faster, cheaper, and easier to set up new employees. If you have a seasonal workforce or a lot of turnover, cloud computing will not only lower your costs of setting up new accounts, but it will make it infinitely faster. "TOSS C3 currently provides cloud IT for a local firm that brings on an average of 10 extra summer interns in May through August. If they had a traditional network setup, they would have to purchase expensive PCs and software licenses for these temporary workers and then pay to maintain and upgrade them throughout the year. Using cloud computing, these interns use their own laptops and log into the network securely. The firm ONLY pays for those worker's licenses during the time when they are interning, just like a utility. When September comes around, they no longer pay for those licenses and support. Using this model saves them approximately $27,000 a year in hardware, software and IT services."
- You use it without having to "own" it. More specifically, you don't own the responsibility of having to install, update, and maintain the infrastructure. Think of it similar to living in a condo where someone else takes care of the building maintenance, repairing the roof, and mowing the lawn, but you still have the only key to your section of the building and use of all the facilities. This is particularly attractive for companies who are new, expanding, or facing a major IT upgrade, and don't want the heavy outlay of cash for purchasing and supporting an expensive computer network. Simply put, IT as a Utility®, takes the variable Capital (CAPEX), Operating (OPEX), and Human Resource expenses you are pouring into IT, off of your income statement and balance sheet and replaces them with a predictable and scalable single line-item under your monthly utility (IT) expenses.
- It's a "greener" technology that will save on power and your electric bill. For some smaller companies, the power savings will be too small to measure. However, for larger companies with multiple servers who are cooling a hot server room and keeping their servers running 24/7/365, the savings are considerable. One of our clients had 4 cabinets of servers and storage costing them $4,700.00 on average per month for power and cooling, which was eliminated when they moved to the cloud.
- It's an "offsite" system that will save on real-estate costs. Real-estate is expensive and with the economy turning around, the cost per square foot won't be coming down any time soon. Smaller companies can reclaim the server room and put it to better use while larger companies can reclaim large areas or an entire floor, not to mention the expensive rent being spent on co-location facilities and other redundant offsite locations and data centers.
Cons Of Cloud Computing:
- The Internet going down. While you can mitigate this risk by using a commercial grade Internet connection and maintaining a secondary backup connection, there is a chance that you'll lose Internet connectivity, making it difficult to work from the office.
- Data security. Many people don't feel comfortable having their data in some offsite location. This is a valid concern and before you choose any cloud provider, you need to find out more information about where they are storing your data, how it's encrypted, who has access to it, and how you can get it back. You'll find more information about this in our "What To Look For When Hiring a Cloud Integrator" post.
- Certain line-of-business applications won't work in the cloud. For example AutoCAD and 3D-rendering, some lab equipment and manufacturing systems that need a rapid high-speed interface between software and machinery. In Google or Office 365's cloud, in fact, no line of business application will work that is not part of their cloud offering.
- Compliance Issues. There are a number of laws and regulations such as Gramm-Leach-Bliley, Sarbanes-Oxley, and HIPAA that require companies to control and protect their data and certify that they have knowledge and control over who can access the data, who sees it and how, and where it is stored. In a public cloud environment, this can be a problem. Many cloud providers won't tell you specifically where your data is stored. In fact, Office 365 and Google truly have no knowledge of where your data is, physically.Most cloud providers have certifications which require them to be able to describe exactly what is happening in their environment, how and where the data comes in, what the provider does with it, and what controls are in place over the access to and processing of the data. As the business owner, it's YOUR neck on the line if the data is compromised, so it's very important that you ask for some type of validation that they are meeting the various compliance regulations on an ongoing basis.Some key questions you'll want to know the answers to are: Where is the data located? Who has access to it? How is the data being stored in production and in DR? Is the data encrypted in-flight and at rest?
- Intimate knowledge of your system for support. When everything's working, the cloud is great. What happens when you can't access an application or your data? 24/7/365 support from knowledgeable engineers who know your company and your system is crucial. Nothing can be more frustrating than getting an overseas level-1 support tech who is reading from a prompter, following a generic script, and wasting your time and money.