Issues where the cloud has a silver lining
Fixed costs and flexibility, plus the end of those system crashes and upgrades … there are a host of reasons to choose cloud computing, writes Anthony Harrington
FOR DECADES companies have struggled to contain information technology (IT) costs and reach a point where they are not being subjected to unpleasant shocks as projects overrun their budgets or fail to deliver.
The arrival of cloud computing, in which the systems and applications reside “somewhere in the cloud”, far away from the user’s own offices, and where applications are delivered via broadband or leased lines, is changing all that. User organisations are able to move to a “per-seat”, fixed-cost basis, giving them a completely predictable budget.
According to Paul Hughes, marketing and product development manager at cloud specialist, managed hosting and co-location provider Pulsant, says another great advantage is that moving to cloud computing enables an organisation to shift at a stroke from a capital expenditure model to an operational one.
This matters because capital expenditure is not tax-deductable except via a slow depreciation of the capital asset, while all qualifying operational expend- iture – and cloud services qualify – attract 100% tax relief.
“User organisations find that they are both gaining or regaining control over IT costs and getting a tax benefit by moving to the cloud, so we are seeing a real surge in interest,” Hughes says.
Pulsant does not itself provide applications. It provides the data centres and computing infrastructure required to deliver cloud services. Its clients include application service providers which use Pulsant’s data centre and cloud services to deliver pay-per-seat applications services to their own clients.
“The great thing about cloud services is that users can scale the service up or down as their needs dictate. This means that you are not over-provisioned if the work tapers off, and you are not underprovisioned at peak busy periods,” he explains.
A retailer, for example, will be very busy and need additional capacity in the run-up to Christmas, but in July and August, with so many away on their summer holidays, demand will probably fall back and the business can scale back its “per-seat” usage numbers.
By way of contrast, an in-house IT department has little choice but to budget for the busiest period, even if that means that significant systems resource is idle most of the time.
Smaller businesses and even midsized companies often struggle to attract and keep the level of IT staff they need to run their own systems and do all the updates and system patches that are
A lot of people are looking at the cloud. It gives them the ability to avoid having to refresh their IT platforms every three to five years
required. Moving to the cloud puts the task of finding and retaining skilled IT staff where it belongs, with the infrastructure provider and applications provider, rather than with a company whose main business probably has nothing to do with IT.
“With cloud services you do not have to worry about installing the latest patch from Microsoft or some other supplier. We have highly skilled engineers 365 days of the year. So, if the system goes down at 3am on a
Sunday, we can jump in and fix it,” Hughes says.
One of the illusions that companies have, and one that acts as something of a barrier to a move to cloud-based services, is the idea that their data is more secure under their own roof. In fact, Hughes points out, Pulsant’s data centres offer far more security and are far more resilient than a small-tomedium-sized enterprise (SME) could hope to achieve for itself.
“Our customer data is always held in the UK, at our own data centres, and is not hosted around the world wherever the provider can get capacity, as happens with some providers,” he says.
The data centre is highly resilient, with uninterruptable power supplies and full back-up to other Pulsant centres. It would be impossibly expensive for an SME to achieve a comparable assurance of business continuity.
Robert Pate, data centre consultant with Castle Computer Services, says there is tremendous interest in cloud services among SME owners and directors right across Scotland.
“We have just run a series of three cloud-based seminars in Glasgow, Edinburgh and Aberdeen, and we had great attendances at all three.
“A lot of people are looking at the cloud for a number of reasons, not least of which is the fact that it gives them the ability to avoid having to refresh their IT platforms every three to five years,” he notes.
The fact that a user organisation knows exactly what its spend will be with cloud services, and can add or reduce the service as needs dictate, is huge. Then there are the tax benefits of buying software as a service, when the entire outlay becomes revenue expendit ure, and as such is f ully t ax deductable.
Moving to the cloud can be challenging, not least because the company has to decide which of its applications and services are best suited to a cloud approach, and which it would want to continue running in-house.
“One of the services we provide for customers is to carry out a cloud-readiness assessment, in which we look at all the applications being run and make sure they are all suited to running in the cloud,” Pate says.
The ‘thin client’ approach of cloud computing requires much less power on the desktop, and therefore has a much lower carbon footprint
One of the criteria is that the user should not experience any degradation in performance when a service is delivered via the cloud rather than locally. Of course, once the service is being delivered via the cloud all the user needs on their desk is a screen and a keyboard. All the computing and memory capacity sits in the cloud. This immediately has an environmental and sustainability benefit which, of itself, will be of interest to many business people, since the “thin client” approach of cloud computing requires much less power on the desktop, and therefore has a much lower carbon footprint, than a standard PC.
“It means that a corporate is going to be spending £200 or so for a ‘thin client’, versus £400 to £600 for the latest desktop PCs, and the ‘thin client’ stays the same year in and year out,” Pate says. Once the cloud-readiness assessment has been completed, Castle then builds a private cloud for that particular organisation based on its specific requirements.
“We support that environment and move everything across to the cloud, delivering IT as a service,” he says.
Castle in effect becomes the IT department for that client and all the costs involved in running an IT department, including all the nasty surprises that can occur, vanish for the organisation. Instead it has a contracted fixed-price fee and can see exactly what additional spend would be required if it needed to scale up its operation to meet increased demand in its particular markets.
“The good thing about our private cloud is that all the data is held and delivered from our two purpose-built data centres in the central belt of Scotland,” Pate says.
This provides a great deal of reassurance to clients, many of whom would be very uncomfortable with cloud services if it meant that their data was being held in the US, India or elsewhere around the world.
It can take between one and three months to do a controlled, managed move of a company’s applications to the cloud, but Castle has a track record of managing these transitions on time and to budget.
There is no doubt that cloud services are going to become the norm for all but the biggest organisations, and perhaps even for some of them. With more and more staff wishing to access corporate data from any device of their choosing – a state of affairs called BYOD, or “bring your own device” – the cloud is evolving rapidly to adapt to this demand.
There are some challenges here since, for example, companies do not want their sales pipeline being downloaded by a departing salesperson to wind up generating sales for a competitor.
“The whole concept of cloud computing has really focused attention on the distinction between private and company information and on controlling data privileges,” Pate says.