“Not a day goes by where I don’t read a headline talking about ‘the cloud,’” says Zack Schuler, founder and CEO of Cal Net Technology Group. “The current, overused definition of the cloud is ‘anything that happens on the Web,’ but in the business world, the more accurate definition of cloud computing is leveraging someone else’s hardware/software and services to complete a business task.”
Smart Business spoke with Schuler about the role that cloud computing has played for businesses during the past two decades, and in what ways it can benefit their operations today and in the future.
How are companies using cloud computing?
When I started Cal Net Technology Group 15 years ago, we didn’t host our own email server. We used an outside company (Earthlink) to host our email, which, in essence, meant that Earthlink was providing ‘cloud services’ for us.
We also have been using an online payroll service for eight years now, whereby we enter our payroll data into a website, and our employee paychecks are processed. Many other businesses might be doing the same. This is truly a ‘cloud service’ that has been around for close to a decade.
Some companies use an Internet-based product called Postini, which has been around since 1999, to scrub their email for spam. I bring this up to point out that all of us have been leveraging the cloud for quite some time, and we probably didn’t even think about it; in actuality, it really isn’t a very new phenomenon.
What are some examples of how businesses can move functions to the cloud?
There is a definite shift in moving some computing resources into another company’s data center in order to save you some headaches and, in some cases, time and money. I use the word some with emphasis here, because if you think that your entire business is moving to the cloud anytime soon, you are probably mistaken — unless your business consists of only a handful of computer users.
The most prominent shift to cloud computing is the migration of email back into the hands of hosted providers, similar to how it was 15 years ago. Microsoft is now in the hosting business with its Office 365 product. It consists of Microsoft Exchange (email server), SharePoint (an intranet product), and Microsoft Lync (instant messaging) in the cloud, with the ability to ‘rent’ Microsoft Office on a per-user, per-month basis, with Office still being installed locally on your desktop.
In moving from an on-premise email solution, such as Microsoft’s Exchange Server, over to Exchange Online, the migration has been very time-consuming, and thus very costly. These migrations have proven to be more costly than moving from one on-premise solution to another. That being said, there can be some significant savings in hardware and software costs, reducing capital expenditure spending for many companies. Additionally, after the solution is running, the ongoing maintenance of on-premise solutions will be gone, which should equate to a cost savings in the long run.
Google has made a significant impact in cloud computing with Google Apps software. From what I’ve seen of the software, it is a good solution for individual use, and for the use of ‘micro-businesses,’ but it reminds me of Office 95 from a functionality standpoint. So, I couldn’t recommend this to any business that relies heavily on word processing.
Perhaps the most successful case study, and a company that has truly made its mark by delivering software over the Internet, is Salesforce.com. It has a very robust feature set within its application, and it was remarkable what it was able to do early on in the cloud-based customer relationship management space.
There are some other line-of-business applications that are cloud-based, as well, and truly deliver a rich user experience, but these are few and far between today, but will be the norm in the next five years.
How can businesses determine what to take to the cloud?
The wise approach is to hire an IT firm with expertise in this area to evaluate your systems, determine the applications that may be ready for the cloud and take a hard look at the overall ROI in moving them.
Zack Schuler is founder and CEO of Cal Net Technology Group. Reach him at [email protected]
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