A Chance of Clouds

In efforts to cut costs, some businesses are exploring cloud computing, but for most, the choice between cloud solutions and storing company data on on-site servers isn’t an either-or scenario.

To some degree, almost every business uses cloud computing, which shifts data storage and computer tasks from on-site servers and desktops to remote servers, says Chris Patrick, vice president of network operations for Synergy Networks, a Fort Myers-based Internet service provider. For example, most don’t run their websites from their own offices, relying instead on an off-site host.

Checking movie times online, purchasing items on eBay and making dinner reservations via the Web all are forms of cloud computing, says Adam Sewall, president and CEO of T3 Communications, a telecommunications carrier based in Fort Myers.

Although virtualization is becoming more common, server-based networks aren’t going away, says Jack Voth, vice president and senior engineer at The Client Server in Bonita Springs, which provides networked communication needs.

Choosing cloud computing for aspects of running a business requires a change in the mindset that data has to be in a closet in the office—not miles away. “Some people just want the data at their local location,” Voth says. But with technology, that isn’t necessary.

Cloud computing can help reduce costs without compromising customer service and delivery times, but it has advantages and disadvantages for different types of businesses. Here are some points to consider if you’re thinking about migrating your business functions to the cloud.


The Virtual World Calls

Voth says the majority of The Client Server’s customers are using cloud technology for certain activities, such as e-mail. (Even Gmail and Hotmail accounts are considered cloud computing.) “We’re finding that a lot of the companies are now moving away from having mail servers in their place of business, and having their mail hosted elsewhere,” he says. For startup companies without computers or servers, “at the very minimum, it is much cheaper to put your mail out on the hosting company.”

Cloud computing for employee e-mail service can also reduce expenses such as expensive anti-spam filters required with on-site servers, Voth says.

Renting space on somebody else’s IT infrastructure is cheaper than building it, Patrick says, and could save money on software and maintenance.

With fewer programs on their computers, businesses that use cloud computing find that their own computers run faster because less memory space is required, experts say.

Some cloud computing options are linked with Amazon, Microsoft, Google and others. Google Docs, for example, can assist small businesses by allowing them to create Web-based spreadsheets, documents and presentations without the licensing, server and hardware expenses, Sewall says. He adds that companies should be sure to ask what kind of support an Internet service provider or communications provider offers and if it has additional charges for premium support.

They also need to confirm that the hosting company provides a backup solution and archives communications, such as e-mail, if their industry requires it, Voth says.


Keeping Data Stored On Site

Most businesses aren’t disposing of the infrastructure and servers in their office and moving all of their data to the cloud, Patrick says. But migrating to the cloud can help them reduce the costs of additional servers when the business expands. He advises startups to consider how many servers they need and compare the cost to virtual options.

Experts point out that cloud computing doesn’t work as well as in-house servers for some uses and activities.

Companies that use Excel or custom applications for in-depth analyses and data gathering, such as financial or engineering firms, may not benefit from a cloud computing solution, Sewall says. Although cloud computing can make it easier for groups to collaborate remotely on projects, intensive functions might run more slowly with cloud computing.

It’s possible to take advantage of the drop in server prices due to more competition among companies, particularly those who make the chips for servers and other internal parts. Many companies choose to pay the same price they would have a few years ago for a bigger and better server, just like how people are buying a 50-inch flat screen TV for the same price of a 27-inch TV a few years ago, says Peter Seif, president of Synergy Networks.

Applications that don’t run as fast in the cloud environment include point-of-sale functions for restaurants, shops and country clubs, Voth says.

But if companies typically have a spike in sales between certain hours, such as 2 p.m. and 5 p.m., and their on-site servers become overloaded, cloud computing could help take some of the load off those servers, Seif says.

Another issue that experts identify is the security of data, particularly for companies in the healthcare industry that need to comply with Health Insurance Portability and Accountability Act guidelines. “If [data] is compromised, who would ultimately be responsible?” says Patrick. It might be blamed on the cloud computing company or the firm that collects the data. He advises keeping such critical data in-house, and using cloud computing selectively. “People have a hybrid approach to it right now.”