Is the Cloud for the Birds?

September 28, 2011

If you read the business or technology press, you’ve probably heard about “the cloud”. And if you believe the ad copy, just about any problem can be solved merely by “putting it on the cloud”. Can this really be true? Is the hype even close to reality? And what is this cloud, really?

The cloud is actually quite simple: it is variously the on-demand storage, and on-demand processing power of applications that “live” on the internet, instead of in corporate server rooms.

Why all of the sudden interest? Consider the benefits:

• The infrastructure is “rented”, so no capital expenditures or maintenance costs for running corporate server rooms.
• Storage space and processing capacity can easily scale, so both peaks and organic growth can be accommodated.
• Third parties have developed many cloud-based apps, which means that organizations don’t need to build functionality themselves.
• The cloud is accessible from any device: computer, smartphone, tablet, and devices not yet invented. In most cases, without special software (or ongoing maintenance).
• Many cloud apps have “social” features built in, improving collaboration amongst users. This can easily be done with internet technology, but is just about impossible on legacy corporate server-based software. As an aside, the fast pace of innovation in Social Media is possible because most are cloud-based.

Cloud computing isn’t just for large enterprises. Google Apps for Business provides incredible functionality for pennies per day per user. Ringcentral moves an entire phone system online. Salesforce.com and Infusionsoft provide complete turnkey CRM (Customer Relationship Management) systems. And if you want to write custom applications yourself, Amazon AWS will provide on-demand storage space and processing power.

Despite the great promise of the cloud, much of the advertising about the cloud is ridiculous, and should be a red flag for anyone considering a new technology or business initiative. Before moving anything to the cloud, here are some important questions that should be addressed:

• What is the “problem” that needs to be solved? In the olden days, the decision was usually buy vs build. Today, it’s buy vs build vs rent – and the analysis to determine which route to go is still just as important as it used to be.
• Will a move to the cloud give a competitive advantage to the organization? One one hand, it might provide better functionality faster; on the other, if your infrastructure is identical to everyone else’s, how can technology give you a competitive advantage?
• How is security being addressed… in detail? There isn’t a week that goes by without a report on security and privacy breaches. What would happen if your systems were breached?
• What changes might be necessary to staffing? Where are the cost savings?
• What process changes can (or should or must) be made to accommodate the new system?
• What is the exit plan if you wish to move from one cloud provider to another. Or from the cloud, back in-house?
• What is the financial stability of the cloud provider? If you are outsourcing key business systems to them, you don’t want to wake up to find them – and your business systems – no longer around.

Will the cloud solve the world’s problems? Of course not – but the cloud is an important new tool that is changing the landscape of the web. Becoming aware of the opportunity it represents, and how it might be used is prudent. Mindlessly jumping on the bandwagon is not.

Randall Craig

President
Pinetree Advisors Inc.

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Since 1994, Randall Craig has been advising on web and social media strategy. He is the author of six books including the newly published Social Media for Business and the Online PR and Social Media series. For more information visit www.RandallCraig.com.


For more information contact:

Randall Craig
416.256.7773 x101 / Randall@ptadvisors.com

Carolyn Bergshoeff
416.256.7773 x 103 / Carolyn@ptadvisors.com


For more information contact:
Randall Craig
President
Pinetree Advisors Inc.
Phone: 416-256-7773 x101
Email: request@randallcraig.com
Website: www.RandallCraig.com

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