Understanding The Cloud Its Types And Uses For SMBs

Tuesday, December 3, 2013
Posted by Andy Wendt

By Jay Atkinson

Undoubtedly, the most disruptive technology to have transformed the modern business market within the last decade is cloud computing.  

Today, businesses around the globe have become more comfortable with the idea of shifting their computing to the cloud in an effort to streamline operations and accommodate an ever-growing mobile workforce’s need to access their applications and data anywhere, anytime.  By 2016, global spending on public IT cloud services alone will reach $98 billion, according to industry analyst IDC. 

While outsourcing email and collaboration were once the main drivers behind a move to the cloud, more small and mid-size businesses are now choosing to move from in-house or on-premise hosting to outsourced, cloud hosting services in an effort to handle other workloads more efficiently and economically – particularly those that increase collaboration and enhance customer relationship management (CRM).  Not only are general business applications, email, and device management part of the equation but interest has swelled in migrating to the cloud applications such as those used for conferencing, CRM/ sales force automation, supply chain and logistics, productivity (SharePoint), design and engineering, finance and accounting, disaster recovery and more.

Why the shift to cloud migration?  On the economic front, the protracted economic downturn forced many IT departments to take a hard look at belt-tightening measures. Did they reduce staff? Postpone hires? Turn to IT providers who can offer a better value? Evaluate alternative IT delivery models?  Many companies chose to lengthen their server refresh cycles to avoid big capital expenses when they could least afford it.

At the same time, rapid advances were occurring in virtualization, provisioning, and automation technology, and increasingly more apps were being developed specifically for the cloud.  Both of these developments made the cloud a more viable alternative as companies weighed their options.

Making Sense of the Cloud Landscape and Its Multiple Options

Small and mid-size businesses that are looking for a more efficient, cost-effective means of keeping up with their growing IT infrastructure are discovering rapidly that the economics behind cloud technology just make too much sense to ignore.

But how do you get started?  Below is a brief introduction to help you grasp some of the fundamentals and get your conversation about the cloud started within your own business – and with your customers too.

What is meant by on-premise hosting?  In the traditional, on-premise model, a company buys servers and software licenses (e.g., Microsoft Office), sticks them in a closet, and hires someone to keep it all running.  Your staff manages and patches the servers, licenses all of the applications, buys and replaces all of the hardware, and makes sure there is power to the building, UPS units, and the like.  Typically, if you wanted to roll out a new application for your employees’ use, it would require the purchase of a new server and software, which could result in tens of thousands of dollars of upfront costs.

The cloud moves away from this traditional on-premise model to some degree or another. 

What is a cloud?  Whether it is public or private, on premise or hosted by a cloud hosting provider, a cloud consists of a collection of hardware (servers, storage devices, networking equipment, firewalls, etc.) and virtualization software that transforms those independent hardware elements into a cohesive cloud.

What types of clouds are there?

Public cloud.  If you have ever used Facebook, Twitter or LinkedIn, or posted photos on a photo sharing site, then you have already used a public cloud.  In this cloud, all customers (either the general public or a large industry group) share the resources of the cloud infrastructure, and it is typically owned by an organization that sells cloud services.  Some of the large public cloud providers are Amazon Web Services (AWS), Microsoft Azure and Google Cloud, however most other cloud hosting providers offer a public cloud option.  

Common uses for a public cloud include document management, corporate portals and intranets, messaging and collaboration applications, marketing websites, testing and staging (pre-production) environments, and ecommerce websites.

While some Software-as-a-Service (SaaS) offerings exist in a private cloud, the most common ones (e.g., Salesforce.com, Microsoft Office 365) exist in a public cloud and are accessed by the user through a web browser or other thin client.  Increasingly, these apps have been specifically developed for cloud delivery rather than an on-premise environment.   Rather than buying a server and a license, you typically pay a per user fee. 

Private cloud.  A private cloud can either be on-premise or hosted by a third party provider.  The primary advantage an on-premise private cloud has over the traditional on-premise model is that of virtualization, which should allow you to get much higher utilization rates out of your servers.  Rather than having one dedicated server for each application, you may be able to put multiple applications on the same physical server by creating multiple virtual machines on that server.

A hosted private cloud gives you the same advantages of virtualization and scalability, while also outsourcing the capex, hardware, and software management to a third party.

The private cloud has some distinct advantages over the public cloud. Typically:

·         There are more stringent Service Level Agreements (SLAs)

·         You have a higher degree of control

·         You are allowed a higher degree of customization and flexibility

·         More accountability for the service provider

·         A business can achieve higher levels of security and compliance (particularly critical with the increased scrutiny surrounding PHI and the ruling on HIPAA/HITECH)

Common uses for a private cloud are mission-critical applications that are either proprietary in nature or handling very sensitive data and customer records.  Businesses that handle health or financial data would be good candidates for a private cloud.

Hybrid cloud.  A hybrid cloud offers the flexibility of in-house applications with the fault tolerance and scalability of cloud-based services.  In this infrastructure, two or more public or private clouds remain unique but are bound together by a standard technology that enables the data and applications in both to function together.

An example may be a business that uses a private cloud for storage of its mission-critical applications and sensitive data and a public cloud for its customer relationship management needs.

These three cloud types do not represent all of the available options, but they are the cloud deployment models that are most appropriate for small businesses.  

We can expect to see more businesses educating themselves about the cloud and its impact on the way we work, communicate and collaborate.  Expect to see more discussion around private clouds and hybrid cloud-based implementations as well as responses to a wide range of policy questions on privacy and security, technology standards, intellectual property and more.

Jay Atkinson is the CEO of AIS Network, a pioneer in the hosting industry.  AISN is the premier provider of data and applications hosting to the Commonwealth of Virginia as well as numerous private sector businesses throughout North America.