From smartphones to tablet computers and ultrabooks, always-on access to data stored in online vaults is going to be an inevitable transformation for most businesses. The machines are rising but are firms ready?
For most firms, cloud computing is one of those phrases that seems to be popping up everywhere these days. You could think of it as another buzz phrase or fad, but the reality is it is an inevitable journey for all firms that rely on their IT to stay efficient.
In our private lives most of us are already advanced users of cloud computing, believe it or not. We chat and share on Facebook; we use clever apps like Dropbox, SkyDrive and Evernote to back up our documents; we remotely back up our music on iTunes. Every time we do these things it works and we’re happy with that.
The business world, however, is embracing the cloud at different levels. Some have embraced it wholeheartedly, moving key line-of-business applications, like finance, into the cloud, while others are taking a dip in the ocean via software-as-a-service (SaaS)-type web-based services such as Salesforce.com.
Still some scepticism
Some business leaders and IT managers are taking to the cloud wholeheartedly, with new technologies such as Microsoft’s Office 365 spearheading rapid change. However, in many cases, there is still a reticence among firms around how secure their data will be in the cloud. This situation hasn’t been helped by high-profile security breaches in 2011, such as that of Sony’s PlayStation Network, not to mention the ongoing activities of hacker groups like LulzSec and Anonymous.
With the evolution of devices like the iPad and various smartphones, entire workforces – rather than management teams – are spearheading the adoption of cloud computing as a way of driving efficiency and reducing costs.
Dell Ireland country manager Dermot O’Connell says Ireland is emerging as the home of the cloud and in recent months Dell has invested US$1bn in a Cloud Centres of Excellence in Limerick. This investment is resulting in new job opportunities for the region.
"Forget about all the hype about cloud computing and get in touch with people you trust in the IT space," he urges. "Talk with people face to face and explore what it is you are trying to achieve. Don’t go into the cloud for the sake of it. Make sure the people you are talking to listen to your business needs.
"I expect most business apps will end up in the public cloud or secure behind the private cloud, but in terms of the infrastructure you need to run your business, trends such as virtualisation are enabling companies to reduce the number of servers they require and that is saving money and ultimately reducing the impact on the environment.
"The trend we are seeing is many firms are moving email, sales and CRM applications to the cloud but are still keeping line-of-business software applications like finance and HR close by."
Moves towards operational expenditure
According to Jane Kinghan of data hosting firm OVH Ireland, firms that are the first to take on cloud computing are usually those that prefer to get their resources on-demand and who require flexibility.
France-headquartered OVH has more than 100,000 servers under management and is deploying infrastructure in Europe and North America.
“Traditionally, firms have discovered that maintaining their own equipment can be expensive to run and replace. There is a definite move away from capital expenditure in firms to operational expenditure.
“Putting the management and maintenance of machines into the hands of experts allows firms to focus on their core business. What firms need to be asking themselves today is: can they afford not to be on the cloud?”
What can cloud do for you?
According to a recent O2 survey, 28pc of companies currently use some form of cloud computing. However, there is confusion in the marketplace as to what cloud can do for their businesses.
“Cloud computing is inevitable,” says Francis O’Haire, technical director with DataSolutions. “It’s an evolution that will happen over time, not overnight. The key is to look at it from the perspective of what it can do for your business.
“Identify the bits that are of value to you. It’s really a case of adopting technology as it evolves and suits your business.
“Our advice is don’t go into it alone; work with an IT partner you can trust. Identify your real IT costs and see what aspects of it you can outsource. And, of course, look at the costs. Looking at the cloud sourcing of key applications like-for-like might seem cheaper but take into account the real efforts required to maintain infrastructure,” O’Haire advises.
The range of firms that are taking up aspects of cloud computing, driven by the flexibility of new hardware devices, is impressive. Retail chain Londis, for example, is to equip every store owner with an iPad as part of its €5m e-Retail strategy.
Using their new iPads, store owners will be able to access Londis’ e-wholesaling platform, ISIS (an intelligent ordering portal that delivers customised real-time data about a store’s stock, relevant promotions and suggestions to improve margin mix), while on the shop floor or remotely.
They will be able to access their category plans, review stock and place orders using relevant data, thereby improving on-shelf availability and ensuring the offering matches consumer patterns in-store.
‘What firms need to be asking themselves today is: can they afford not to be on the cloud?’
– Jane Kinghan, manager, OVH Ireland
Engineering firm Mercury Engineering has signed a deal valued at €350,000 to roll out virtualisation technology from Citrix that will connect its global workforce. It has created an application delivery network that delivers standardised applications to 530 users and 800 client machines on three continents.
The solution, which was deployed by DataSolutions and IT Force, has enabled Mercury Engineering to enjoy savings of up to €500,000 and is expected to pay for itself in less than a year.
Ireland is rapidly garnering a reputation as the ‘home of the cloud’ as well as being termed the ‘Internet Capital of Europe’. There are now more than 22 data centres – the engine rooms of the cloud – active in Dublin alone. One of these is pan-European data centre firm Interxion, which has invested €20m in expanding its west Dublin data centre.
“There are three reasons why we see businesses embracing the cloud. The first is cost savings; the second is reliability; and the third reason is they want to focus on their core business," says Interxion Ireland managing director Tanya Duncan.
“My advice is look at the total cost of ownership (TCO) of having all your IT stored inhouse versus outsourcing it to a partner.
“What often focuses people’s minds is that with the right service provider you don’t risk the problem of systems going down. Most firms that sell online today, for example, could not countenance the cost of having their services unavailable online when there are more than 1bn people in the world online.
“Downtime could have a huge impact on their business and there’s also the reputational damage. The key is to have the right data centre partner out there that has guaranteed service level agreements (SLAs).
"But why would a firm invest in the cloud? It depends on their current business model. Buying servers and scaling up to meet anticipated demand could be a waste of money if demand turns out to be lower than expected. With the cloud, you can scale differently. There’s no up-front investment required, because it is an operational spend," Duncan said.
The quality of connectivity is crucial, points out Peter Hendrick of AirSpeed Telecom, which has recently invested €1.6m in its wireless infrastructure to support cloud services.
"If I think about cloud computing – I think of private and public services. The idea of having a cloud network is that it is a ubiquitous service for the delivery of data to end-users.
"It really comes down to the type of business and applications that you want. A private cloud network, for example, usually sits behind a firewall and virtual private network (VPN).
"You have to ensure that the bandwidth available to workers is sufficient that they don’t suffer any deficiencies because the data is being stored remotely.
"The cloud is inevitable but IT managers need to change their focus on it – some feel that by hosting their IT equipment remotely they may be out of a job. That’s not the case. It could, in fact, free them up to focus on driving other strategies in the business, such as e-commerce and the web."
According to Guido Marchetti of MJ Flood Technology, firms need to do their homework before agreeing to sign up with a cloud provider. "Evaluate what you need, clearly identify the services you want to run via the cloud and do a stringent proof-of-concept to make sure it will deliver for you.
"Some operator will give you a better cloud service above and beyond traditional IT services. We’ve embraced the cloud from an early stage and we’re starting to see traditional IT services become cloud-based and we’ve moved with that," adds Marchetti.
From left: Dermot O’Connell, country manager, Dell lreland; and Jane Kinghan, manager, OVH Ireland