How to take advantage of the benefits of cloud computing Featured

8:00pm EDT July 26, 2010

Unless you’ve had your head in the sand the past year, you’ve probably heard of cloud computing — and like most business owners or managers, you’re either looking up at the sky for answers or simply choosing to ignore it.

Even if cloud computing seems confusing and/or daunting, don’t ignore it, says Mark Swanson, the CEO of Telovations Inc.

“It is vitally important to not only understand what cloud computing is, but also to tap into its far-reaching and strategic ‘hidden’ benefits,” says Swanson.

Smart Business spoke with Swanson about cloud computing and how a business can be — and should be — benefiting from it.

What exactly is cloud computing?

The term ‘cloud computing’ refers to a computing paradigm that has been around for more than 10 years. Still, communication disjoints and confusion over the term ‘cloud’ is almost certainly getting in the way of its acceptance, by making it more difficult to understand what it means for your business.

Generally, ‘cloud’ means three things:

  • Its flexible/scalable/virtual applications infrastructure is available on-demand.
  • It’s pay as you go — you only pay for resources used in a shared environment.
  • There’s no ongoing obligation.

What are the benefits of cloud computing?

Take hosted e-mail, for example. Most users don’t have their own servers; they rent their mailboxes from Google, AOL or some other provider. The benefits of not running an e-mail server yourself are obvious: you don’t have to spend the time to do it, you don’t have to add more capacity and you can add mailboxes on demand. An added bonus is the fact that these firms all have redundant infrastructures that keep your system up and running no matter what ‘disaster’ occurs.

However, despite all the obvious benefits, it is easy to create a business case that does not justify moving to the cloud. The common excuses I hear are: ‘My applications are unique.’ ‘The cloud is not secure.’ ‘I have too much of an investment in my people.’ — or, my favorite, ‘I have to see my server!’

What are the consequences of ignoring cloud computing?

There are ramifications to this new computing paradigm that go beyond the obvious. Choosing to not adopt a new technology has strategic implications to your business that you should not ignore. For example, the American automobile industry failed to adopt factory automation and ‘Just-in-Time’ inventory systems and fell behind Japanese manufacturers in the 1980s. If you choose to ignore cloud computing technology today, your business could suffer the same fate while your competitors soar ahead.

If a business wants to implement cloud computing, what’s involved with the process?

There are many factors to consider in evaluating cloud-based technology, but here are three that are often overlooked:

  • Using cloud computing allows your business to be more adaptable. Just look to Charles Darwin and his observation on survival of the species for inspiration. Darwin’s quote, ‘It is not the strongest species that survive … but those most adaptable to change,’ can be directly applied to any organization. Applications in the cloud are ready to deploy and can be ramped up or down very quickly. For example, you can deploy a complete phone system inside of a day.

However, less obvious is that outsourcing to the cloud helps your IT staff be more adaptable. Apple, for instance, is the most valuable technology company in the world because it has adapted. They have taken technology design and applied it to a variety of industries, including education, music and books. Likewise, using a cloud-based infrastructure and applications helps you be more adaptable by allowing your IT employees to focus on things that have more impact on your business. Your IT team can’t afford to be messing around with e-mail, financial systems or phone systems. They need to be focused on using their skills to help make what you do better and supporting the company’s strategic initiatives, not spending time on technologies that are chore versus core.

  • Using the cloud helps your IT staff be more efficient. If you are not in the technology business, it is very hard to hire the best technology employees into your company. You might be able to attract very good applications developers, but what it comes down to is that good engineers want to be around the latest technology, not work for a company who is still using outdated equipment and technologies. The best and the brightest IT technicians would never leave a company to go work on a six-year-old premise-based switch if they are engaged working in the cloud. And it’s not just because it is the trend of the decade, but because it allows them to accomplish more.
  • The cloud affects your ability to participate in innovation. Most of today’s most innovative business applications are being delivered via the cloud., NetSuite and J2-Fax are but a few of the companies that are driving innovation in the market. In addition, cloud applications are all starting to talk to each other in what is becoming known as a ‘cloud-based ecosystem.’ Sales automation systems are talking to phone systems, which are connected to customer management systems, which are linked to billing systems — all in the cloud. What once took hundreds of thousands of dollars to integrate is now literally available out of the box. If you are not participating where the innovation is happening and your competitors are, you will fall behind.

A dozen years ago, Sun Microsystems came up with the marketing slogan, ‘The network is the computer.’ That vision is becoming a reality today. Ignoring the cloud today is almost the same as ignoring the Internet twelve years ago. You owe it to your business to make your IT department come up with a cloud strategy and leverage the apparent and hidden benefits before your competitors do.

MARK SWANSON is CEO of Telovations Inc. Reach him at