The economy has caused organizations to focus on exploring ways to reduce total cost of ownership (TOC) and/or limit capital expenditures (CAPEX). Cloud computing certainly enables organizations to achieve these goals and maintain or gain competitive advantages among rivals.
Aside from the economy, many things are happening within the technology/IT industry. Connectivity to data centers, for example, has become much faster and cheaper than ever. In addition, today’s technology reliably and securely uses servers and other hardware across multiple uses and achieves higher utilization.
Compared with a traditional in-house IT deployment model, cloud computing offers business leaders a lower TCO with increased scalability and responsiveness. When you match expenses with revenues and remove CAPEX, you can realize significant cost savings. Plus, you no longer need to worry about your systems being up and running, which means a focus on what matters most: your business and your customers.
What is cloud computing?
The February 2009 issue of St. Louis Small Business Monthly contains two cloud computing articles that help make cloud computing a little less cloudy. The authors of these articles, Julia Paulus and Rob Hubert, do a good job explaining cloud computing and describing its benefits and risks.
Cloud computing is an environment in which the user can gain access on an as-needed basis to virtualized and dynamically scalable computing resources. These resources can be as granular as pure CPU cycles as provided by utility and grid computing environments to software as a service (SaaS)-based environments.
One way to understand cloud computing is to draw a parallel between your IT infrastructure and your car. If you liken your traditional on-site physical IT infrastructure (e.g., your home PC setup or even your entire business IT network) to the car you own, you must recognize that your car ties up cash (capital expenditures) and that you also incur ongoing expenses to keep the car operational – such as maintenance costs, insurance and gas. The car depreciates and ties up your cash that could be earning interest elsewhere. You don’t use your car all the time; in fact, for the most part it probably just sits parked somewhere. If it breaks down, you need to get it fixed and organize a replacement – it’s a pain, costly and time-consuming.
With a taxi cab, on the other hand, you use it only when you want to and drive as far as you want, paying for the miles as you go. The cab is there when you need it. When you’re not using the cab, someone else is. If it breaks down, there is always another cab.
The cab is representative of cloud computing, and there are many benefits regarding total cost of ownership, flexibility and capital expenditures. In fact, the average server capacity is used at only 5 percent to 10 percent for organizations that purchase and maintain their own infrastructure (the “car” in this metaphor). That’s a lot of waste.
How can small businesses take advantage of cloud computing?
Understanding cloud computing and how it compares with a traditional in-house IT deployment model is crucial. It is also important to know that it does not have to be an all-or-nothing approach when it comes to using the cloud. You should work with your trusted service provider to create the best approach for your organization. For example, you can use the cloud to create a hybrid approach to augment your current infrastructure, either as your existing equipment ages out or for additional capacity. In addition, private clouds can be created to allow organizations to gain many of the benefits provided by the larger public cloud. But an organization has sole use of a private cloud, on its own hardware infrastructure.
The area of cloud computing has evolved at a tremendous pace over the past year and shows no sign of slowing down. Several large software and hardware manufacturers have begun working together more closely in making sure systems are optimized and work together seamlessly when used to provide cloud-enabled services. That’s not to say that failures and losses of data won’t happen as cloud computing advances, but it serves as a good reminder that regardless of where or how your data and systems are located and stored, you should always make sure you understand how they are backed up and what risks you are accepting and/or mitigating.
Just as stratospheric clouds are constantly changing, cloud computing continues to evolve and adapt. Keeping your business tuned in to the cloud conversation will ensure that you are able to accurately forecast what technological needs your business will have in the future – and from the looks of things, the forecast appears to involve clouds.