The cloud and its associated language of things ‘as a service’ can be very intimidating for the executives of large enterprises, let alone the owners and management of SMEs. At the same time, cloud solutions are becoming more and more intrinsic to much of what we do now on our laptops but, more interestingly, on our tablets and phones.

Anyone using a Gmail, Yahoo or Hotmail account is using a solution over the cloud – software as a service (SaaS). This seemed intuitive to consumers brought up on the internet but businesses didn’t trust the internet.

Historically, it wasn’t fast enough, it didn’t provide enough space and reliability was an issue – especially when a ship dragging its anchor severed our connection with the outside world.

These problems were addressed in the last few years. Speed and reliability improved at rates we could not have imagined. Storage capacities increased greatly at the same time that their price fell. This created the opportunity for enterprise solution providers to offer more business-critical corporate solutions over the web. Platforms such as SalesForce.com, SAP ByDesign and Microsoft 365 offer applications that most businesses would never have dreamt of moving off-premise five years ago.

Cloud solutions can differ from on-premise solutions in the way they are financed. Traditional on-premise applications such as ERP solutions involve a substantial capital outlay for both infrastructure (servers and local network) and software licensing.

Cloud software delivered as a service is billed periodically, often per user per month or year. It is therefore managed within an organisation’s operational expenditure, having less impact on cash flow, with regular and predicable costs.

Another characteristic of cloud solutions is the PC browser’s diminishing role because of the increasing influence of mobile technology. Cloud solutions have an advantage over on-premise solutions as providers’ data centres are closer to the internet, providing higher bandwidth. This makes it easier to deliver large volumes of data such as product catalogues.

Thanks to the increasing bandwidth between businesses and the internet, and with the economies of scales achieved by larger data centres, cloud solutions can go beyond the relatively simple software as a service model. It is now very feasible to supplement or even replace infrastructure over the cloud. This can include regular live systems or development servers, all the way through PABX and unified communication platforms. This is done through platform as a service (PaaS) or infrastructure as a service (IaaS) models. These allow companies to regularise their IT expenditure within their operational cost, outsource much of the support effort, and reduce concerns relating to infrastructure failure, reliance and disaster recovery.

So far it all sounds positive, but there are downsides to consider. When you place data on the cloud, the likelihood is that it will leave the legal jurisdiction of your company, even if your cloud provider claims to utilise local data centres: very often, as part of their efforts to protect your data, they will replicate it in another part of the world. This risk should not be underestimated. There have been numerous instances recently where governments and private entities have treated data with perhaps less respect than you would want.

Equally, when utilising cloud services, you are using a communal platform. This often brings with it less opportunity to customise and configure the service in the way you would want it. On the other hand, changes can easily be imposed on you, making solutions more complex to implement and manage for companies and industries who need complete control over their systems. One must expect to have to make compromises.

To summarise, cloud or IT solutions as a service offer many advantages in terms of capital expenditure, ease to deploy and mobilisation. But companies need to consider the implications carefully.

Are you willing to put your data into someone else’s hands? Can you afford to go with a more vanilla solution on the cloud?

If you can afford to make these compromises, then refocusing your IT investment to cloud solutions might be viable and make more sense, ultimately allowing you to focus on your core business.

www.alertsolutions.com.mt

Damian Heath is the solutions director for Alert Solutions.