These days it seems that everybody is talking about Cloud computing, but what exactly is it and should you be considering it as part of your IT strategy? The problem with all new IT concepts is that as soon as the next big idea arrives, everybody jumps on the band wagon, and before you know it, everything is touted as being cloud-based.

You couldn't be blamed for thinking that the latest Microsoft adverts are simply showing someone using email, but according to the marketing hype, this is actually someone being empowered by Cloud computing.

So if we ignore the marketing hype and look at what Cloud computing is really all about, essentially the concept is based on the idea that you shouldn’t need to buy a new IT system every time you want to run a new application.

If you compare this to other resources, like electricity, this is like installing a new generator each time you want to plug in a new appliance. Nobody really cares where electricity actually comes from, as long as there is enough available when you want to use it.

The same should be true of computing power.  Why can’t there be a central computing resource (the cloud) that you connect to whenever you need computing power. This can be either raw computing power, such as access to servers to run your own applications, or access to actual applications and services.

The pros and cons of this approach are pretty much the same as the pros and cons of accessing the national grid for electricity:

Pros

• It’s much cheaper compared to the cost of maintaining your own generators and staff
• You get a better service, as it is delivered by electricity professionals
• Its scaleable, which means you don’t have to do any capacity planning. If you want more you simply pay more.

Cons

• If there’s a power cut you are in trouble

The IT equivalent of a power cut is a disaster or security breach that causes data to be lost or a loss of services.  These are the biggest concerns around cloud computing. Large commercial organisations can mitigate this risk by building their own cloud computing environments, called private clouds. This is the exact equivalent of an organisation building its own electricity grid in order to get the benefits of the cloud approach whilst maintaining control over security.

Smaller organisations, however, won’t benefit from the same economies of scale and are more likely to be looking at the public cloud, where the IT resources are managed by a third party.

So what about the risks?

Firstly, with regards to security, you need to look at the risks of your current systems and how you are set up to cope with a disaster or security breach and compare this to what is offered by a service provider. Dedicated ‘cloud’ providers are often better equipped to handle natural disasters and security breaches. However, preventing a breach should be the first priority, and the obscurity afforded by a private cloud goes a long way to that cause. Yet security remains as dynamic an issue as the technology, infrastructure and methodologies the system is founded upon, and the solution must always be evaluated against cost, benefit and risk.

Secondly, with regards to loss of service, you need to look at the service level agreements (SLAs) provided by the third party and compare them with what you get internally. You may have noticed that cloud computing sounds very similar to IT hosting, which has been available for the last 20 years. The concept is basically the same, but the difference is that the software being used is much more advanced, allowing much larger organisations to provide hosting services.

With a credit card, and you can have access to a prebuilt server running Windows or Linux preinstalled with SQL Server etc. within a few minutes. It is also, by definition, set up to be accessible from anywhere with an internet connection, which makes access by developers, users and customers much easier.

So what does CRM in the cloud offer?

Firstly, you have two options:-

• Use a cloud-based infrastructure to run your own CRM application. In other words, use a third party to provide the underlying servers and storage, while you install and manage your own CRM application. You will still need skills in application development, integration, implementation etc but you won’t have to invest up front in hardware or worry about systems management skills. This “pay as you go” cost model is particularly good for external facing systems, where you may not know how many users you might attract.
• Use a cloud-based CRM application (software as a service).

Option 1 clearly offers more control and flexibility, but requires a bigger investment in internal skills. Option 2 provides less flexibility, but the costs are more predictable. (The amount of flexibility provided will vary by application).

So which should you consider?

The basic question is how much control and flexibility do you need? This probably comes down to how core the CRM system is to your organisation. For example, for some large organisations, their ability to link their CRM systems with their ecommerce systems can be used as a unique selling point so that members of staff can have up to date purchasing information every time they speak to a customer. They would therefore typically want to maintain maximum control. For other organisations, the CRM system is just another back office system, which needs to function, but isn’t a competitive differentiator.

Ultimately, the real advantage of “the cloud” is not having to buy, maintain and optimise computer hardware and having 24x7, global access to your system. Control has been traded in for accessibility, capital expenditure for operational expenditure; and whilst your requirements must always dictate your environment, weighted against the risks and benefits, there is now legitimate reason to have your head in the clouds.

Want to read more? Let us know and we'll happily discuss this further.      

 

We'd love to hear your thoughts, comments or opinions. Name: Email: Comments: