Get your head in the cloud

There is a famous misquote from 1943, incorrectly attributed to the then-chairman of IBM, Thomas Watson, that goes along the lines of "I think there is a world market for maybe five computers".

To IT managers looking across the office at all the PCs being used, who chuckle at such a statement, consider for a moment that cloud computing could wipe away the need to continually upgrade hardware, buy and install software, worry about out-of-date operating systems, backing up data and malicious attacks on your company's network.

Forgetting for a moment the impact on the computer servicing industry, consider that many moons ago large firms would have a mainframe computer and dozens of 'dumb' terminals (computer screens and keyboards) that staff used for data entry.

We are heading back in that direction, with net-based Software as a Service and cloud computing centralising the tools we need to do work via a computer, laptop, tablet or smartphone.

Just look at some of the tools and data storage Google is offering via its central data storage facility. Could we one day find that five such centres deliver all the computing power and storage we need?

Cloud computing is far more than just the secure storage of digital files. A good example of where we are going is local online accounting firm Xero. The firm allows people to manage their financial records without needing an accounts package installed on their computer. All users need is a web browser to log in, enter their data, save and log out again.

This is a Software as a Service (SaaS) company, and the principle can be applied to almost any software you or your staff need. People can run their business and staff can do their work from places other than the office; worries about losing data due to loss or theft of hardware, earthquakes, fire or drive failure can become a thing of the past.

One of the advantages of using a cloud service is that business owners no longer need to install software on every computer. Instead, businesses can rent the software they need, and perhaps only for the time they need it (something software maker Adobe is already doing). This can reduce costs for start-ups and as the business grows, so more time and login accounts can be rented for the services needed.

According to IBM's global strategy consulting leader, Saul Berman, the number of enterprises turning to cloud computing will more than double by 2015. He says businesses that embrace the "transformative power of the cloud" will have a significant advantage in introducing new products and services, and capture new markets and revenue streams.

"Companies are starting to understand - cloud isn't just about gaining efficiencies and cost savings. It's about driving the kind of fundamental innovation that provides lasting marketplace advantage," says Berman.

"Cloud has the power to open doors to more efficient, responsive and innovative ways of doing business, and we believe the companies that will come out on top will be the ones that find ways to leverage it as a key point of differentiation in driving business value.

"Whether they choose to tap into the cloud to optimise, innovate or even disrupt their business models, they need to start working on it now."

A KPMG report, Embracing the Cloud, says too many firms see cloud computing as an IT department issue, when it is really one that should be driven by leaders of the business.

It's early days for cloud computing though. The technology is sound, but we are in a period of transition, acceptance and understanding, perhaps even trust that data is safe and secure.

Ultimately, any change by a company needs to be driven by bottom-line improvements that take into account impacts on staff.

"It is critical that buyers closely scrutinise potential and claimed cloud computing savings across the life-cycle of a cloud deployment," the report says. "It is imperative to consider factors that may drive cost and risk assessments, such as costs of integration into legacy systems, customisation and configuration, ongoing user training and retraining and support costs."

Types of cloud computing
Software as a service: remote access to software such as Gmail, Hotmail, and paid-for services

Infrastructure as a service: access to dedicated remote server space, via the net, to run your business

Platform as a service: used by developers to build their own applications

There are three types of cloud services:
• Private clouds, where the applications, data and necessary infrastructure are dedicated to a single party that retains direct management oversight

• Public clouds, where data and applications of non-related parties may reside on the same servers and are more likely to be primarily managed by a third party

• Hybrid clouds, combinations of private and public

Source: KPMG