So you've heard this term "cloud computing" and you're thinking: Just a buzzword for something that has no impact on my life. Well, that may or may not be true.
Buzzword? Yes
Impactful? Potentially
What I will do here is describe to you what cloud computing is (or at least my take on it) and how it may be relevant to small businesses. For those that want the short answer, feel free to scroll down to Give me the SHORT ANSWER!!!.
What is Cloud Computing?
Interestingly, people are still arguing over what cloud computing is, what qualifies as cloud computing and what doesn't, and what the future of it will look like.
Here is what Wikipedia has to say: Cloud computing is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure "in the cloud" that supports them.
Alright, I'm not sure that could be any more vague. But here is my $0.10 version of the definition: Cloud computing is a pay-per-use model of using services on the Internet.
This definition includes services such as Gmail, Google Docs, Google Maps, Payment gateways, and online backups.
Hey! That's just another word for ASP, Software as a Service, or whatever the current buzzword is!
Pretty much. In fact, if you use the Wikipedia definition, "cloud computing" has been around since the 60s where you would purchase time slices on a mainframe.
Pretty much. In fact, if you use the Wikipedia definition, "cloud computing" has been around since the 60s where you would purchase time slices on a mainframe.
So what's different now?
What's different is that we can now merge all of these technologies including the Internet, virtualization, web services, and higher available bandwidth to produce offerings that make business sense.
Additionally, groups such as the open cloud manifesto are working to develop standards that allow cloud services to work together!
What's different is that we can now merge all of these technologies including the Internet, virtualization, web services, and higher available bandwidth to produce offerings that make business sense.
Additionally, groups such as the open cloud manifesto are working to develop standards that allow cloud services to work together!
Now you're losing me. Give me an example!
Fine. I just launched a "virtual" company called Data Knoxx. Here is the approach that I took: Invest in critical infrastructure, and go "pay per use" on everything else.
So in my case, my critical infrastructure is my backup system. I'm not going to trust someone else with that. However, the phone system, web hosting, site monitoring, document storage, and email are all items that are peripheral, but important. The cost of entry is too high for me to invest in all of these systems, but with cloud computing (or Software as a Service), I am able to enable these systems on a pay-per-use model.
Now, what would differentiate these services as cloud computing would be interoperability. Suppose my phone system, web hosting, site monitoring, document storage, and email platforms would all talk to each other on a standard protocol without custom programming? That would be POWER!
This is where it gets interesting!
Some purists will further refine the definition of cloud computing to only include data storage and computing power. So back to the main frame model, I pay for time slices on a shared server and pay by the Gig for storage used on a shared system. That's fine. I'll let the purists argue that one out.
Give me the SHORT ANSWER!!!
However you define cloud computing, what it means to the Small Business CIO is simple: LOW COST OF ENTRY for a PAY PER USE model.
You do not have to invest thousands of dollars up front for you IT infrastructure. Instead, you pay a low monthly fee that increases as your usage (and hopfeully revenue) increases.
One more example
Data Backups. Here is the traditional model of entry into data backups:
Tape Solution
- Purchase a tape drive (or multiple tape drives) - $1,000
- Purchase tapes - $350 for a 10-pack
- Purchase tape backup software - $150 (and that's low)
- Design a tape rotation system - 20hrs effort @ $20/hr = $400
So that's close to $2,000 before you even call Iron Mountain to start picking up your tapes!
USB Solution
- USB drive - $500
- Backup Software - $150
- Design and implement backup system - 20hrs effort @ $20/hr = $400
So that's a $1,000 dollar cost of entry, but make sure that your IT guy takes that drive somewhere safe every night!
Disk to Disk Solution
I won't go into details on this, suffice to say that the cost of purchasing and implementing a server and disk array is over $5,000.
Cloud Computing
- Software licensing - $0
- Set up costs - Figure 10 hrs at $20/hr = $200.
- Data storage - Depends on how much data. Most business plans start around $35/mo.
So that's $235 to get in the door and the majority of that is your person setting up and configuring the software. As your data grows, the running cost will increase, but hopefully by then your revenues are increasing accordingly.
Also, consider the effect of scaling back! Your operational costs instantly decrease as you scale back. You can't give tape drives back when you don't need them anymore!
Conclusion
So that's my take on cloud computing. I'm interested to hear other's thoughts on this new-fangled buzzword.
In the mean time, try out this model for yourself: www.dataknoxx.com
Fine. I just launched a "virtual" company called Data Knoxx. Here is the approach that I took: Invest in critical infrastructure, and go "pay per use" on everything else.
So in my case, my critical infrastructure is my backup system. I'm not going to trust someone else with that. However, the phone system, web hosting, site monitoring, document storage, and email are all items that are peripheral, but important. The cost of entry is too high for me to invest in all of these systems, but with cloud computing (or Software as a Service), I am able to enable these systems on a pay-per-use model.
Now, what would differentiate these services as cloud computing would be interoperability. Suppose my phone system, web hosting, site monitoring, document storage, and email platforms would all talk to each other on a standard protocol without custom programming? That would be POWER!
This is where it gets interesting!
Some purists will further refine the definition of cloud computing to only include data storage and computing power. So back to the main frame model, I pay for time slices on a shared server and pay by the Gig for storage used on a shared system. That's fine. I'll let the purists argue that one out.
Give me the SHORT ANSWER!!!
However you define cloud computing, what it means to the Small Business CIO is simple: LOW COST OF ENTRY for a PAY PER USE model.
You do not have to invest thousands of dollars up front for you IT infrastructure. Instead, you pay a low monthly fee that increases as your usage (and hopfeully revenue) increases.
One more example
Data Backups. Here is the traditional model of entry into data backups:
Tape Solution
- Purchase a tape drive (or multiple tape drives) - $1,000
- Purchase tapes - $350 for a 10-pack
- Purchase tape backup software - $150 (and that's low)
- Design a tape rotation system - 20hrs effort @ $20/hr = $400
So that's close to $2,000 before you even call Iron Mountain to start picking up your tapes!
USB Solution
- USB drive - $500
- Backup Software - $150
- Design and implement backup system - 20hrs effort @ $20/hr = $400
So that's a $1,000 dollar cost of entry, but make sure that your IT guy takes that drive somewhere safe every night!
Disk to Disk Solution
I won't go into details on this, suffice to say that the cost of purchasing and implementing a server and disk array is over $5,000.
Cloud Computing
- Software licensing - $0
- Set up costs - Figure 10 hrs at $20/hr = $200.
- Data storage - Depends on how much data. Most business plans start around $35/mo.
So that's $235 to get in the door and the majority of that is your person setting up and configuring the software. As your data grows, the running cost will increase, but hopefully by then your revenues are increasing accordingly.
Also, consider the effect of scaling back! Your operational costs instantly decrease as you scale back. You can't give tape drives back when you don't need them anymore!
Conclusion
So that's my take on cloud computing. I'm interested to hear other's thoughts on this new-fangled buzzword.
In the mean time, try out this model for yourself: www.dataknoxx.com
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