Bob Sonchen has a little extra office space. The brokerage and consulting firm president moved his technology infrastructure to the cloud more than three years ago. The result? Easy no-maintenance access to his business data any time, any place…and office real estate in place of a dedicated server closet.
“No servers,” said Sonchen, president of IFS Benefits LLC in Newark and Lewes. “And I don’t want to ever have a server. I just feel more nimble and I wouldn’t want to ever be burdened down again.”
While Sonchen went “all in,” similar small to mid-size businesses like his are just testing the waters, paying attention to trends that suggest cloud technology is a massive data elixir promising agility, scalability and simple access to vast amounts of information for fewer dollars.
According to Delaware experts in the technology industry, moving to the cloud makes sense for the startup, thanks to low cost or easy entry. Larger companies have the luxury of migrating to private cloud services or tailoring their deployment models to meet their public and security needs.
For the mid-size company, however, questions abound, but experts say so do the choices — with cloud options that range from email and desktop exchange servers to security and backup resources stored in a virtual server.
What is it?
For the embarrassed executive who’s still murky about what cloud technology is, there’s validity in finding out. Cloud technology has nothing to do with weather, and everything to do with accessing data and resources housed in a virtual data center, rather than within the four walls of your company. While servers have a while before they go the way of the floppy disc, the trends are compelling.
Nearly 80 percent of U.S. small businesses will be fully adapted to cloud computing by 2020, more than doubling the current 37 percent rate, according to “Small Business Success in the Cloud,” a new report from Emergent Research and Intuit Inc.
But, before it was ever a buzzword, most people already used cloud technology in the forms of smart phones or facebook. It wasn’t until the last few years that CIOs and in-house IT personnel began to seriously consider the impact cloud services could have on their business, including faster access to analytics, better productivity and streamlined operations among multiple offices and employees.
According to one survey, businesses are expected to spend about $13 billion on cloud services by the end of the year – those are huge numbers thanks to the usual big name players like Amazon, Apple, Google, Microsoft and IBM.
“There is still at little bit of ‘explain it to me’ but it’s moving along,” said Diamond Technologies Inc. Director of Operations Vincent Borrelli. “The concept of accessing computers that reside someplace else has been around for a while.”
Borrelli was the first to suggest Sonchen move all of his operations to the cloud when he bought out IFS ltd. in July 2001, to become IFS Benefits LLC. The move required an immediate shut down of all existing systems and left Sonchen to decide whether to install an on-site system and server or move to the cloud. He moved.
“We have almost 20 customers that are on our 24/7 support contracts, and almost all of them have something in the cloud,” said Borrelli, who counts several state agencies among his clients. Borrelli, who got his first IT job in 1988 babysitting a mainframe the size of a small office, says the possibilities with the cloud are staggering.
In fact, Diamond Technologies moved all of its infrastructure to the cloud about three years ago, decommissioning six servers in the process, said Borrelli.
“We were able to reduce our hardware footprint by half,” he said.
Private, public and hybrid
Raj Lakshumanan, president of Blue Star Tech Solutions, an IT solutions firm, was recently a presenter at Tech2Gether in Wilmington, an inaugural conference highlighting innovations in medicine, education and technology.
Lakshumanan offered an overview of the cloud technology movement, proof that there’s still a place for laying out the fundamentals. And while the learning curve for end-users in a business setting may be small, the tech world for administrators, developers and IT specialists has been radically altered, he said.
“A lot of big businesses, even clients – they’re working in the cloud but don’t know exactly what it is,” said Lakshumanan. “They scratch the service.”
Overwhelmed with the complexities of the migration effort, Lakshumanan said company decision makers need to carefully look before they leap.
“The education piece is key,” he said. “Infrastructure is evolving toward the centralized model design.” That centralized model means massive data centers to house the information all over the world and cloud usage that he expects to double in the next two years.
“You have large groups of remote servers networked to allow centralized data storage and online access to computer services and resources,” he said.
That design includes the following Service models:
- Platform as a Service (PaaS), which enables companies to rent hardware, storage and network capacity and operating systems over the internet.
- Software as a Service (SaaS) applications hosted by a vendor or service provider and made available over the internet. Users typically pay a fee per use per month.
- Infrastructure as a Service (IaaS) provision model in which an organization outsources the equipment used to support operations, including storage, hardware, servers and networking components. The service provider owns the equipment and is responsible for housing, running and maintaining it. The client typically pays on a pay as you go basis.
Those services are deployed through private, public and hybrid options.
The public cloud utilizes open-source software over the internet to facilitate incredible amounts of data, with a “pay as you go” billing model, ideal for accessing information and resources quickly, but not the answer for companies specializing in proprietary information.
Private cloud, sometimes called an enterprise cloud, is provided by a hosted data server and is optimum for companies or organization requiring security measures. Services are offered behind a firewall, and only accessible by users from a specific business or organization.
Hybrid clouds are an integration of public and private cloud technologies.
But does it make sense for everyone?
If email is the most critical service and the exchange server is sitting in a coat closet with a sprinkler over it, then it might make sense to move to a cloud server.
But a replicated system stored in the cloud – a “snapshot” — can replace the existing system and get virtual office productivity humming again. That’s practical decision making, according to Dustin Sterkenberg, vice president of engineering at Qnectus, a “cloud-centric” IT company based in Newark.
It’s precisely this range of cloud services in the business realm that make it worth consideration – even from the wariest of CIOs. Businesses can migrate part or all of their tech infrastructure into the cloud system. They can also replicate services as a backup or as a disaster insurance policy or they can take a pass completely until the financial and logistical value outweighs the traditional model.
But overhauling your IT system to migrate your infrastructure to the cloud doesn’t always make immediate financial sense.
“The long and short of it is, if they just invested $50,000 in their infrastructure, if they’ve upgraded their onsite exchange server, if they’ve made that capital expense already, then it does not make sense from cost perspective.”
Sterkenburg said every situation is different, and key to weighing cloud migration is understanding individual business needs and where they are in the life cycle of their service.
Startups are a no-brainer, said Sterkenburg. Minimal needs, no money in an aging infrastructure and the
“lets-work-from-Panera” possibilities make cloud technology a perfect fit.
“From an FCC audit perspective, you can’t ever lose a laptop with sensitive data,” said Sterkenburg. But if that data is stored in the cloud the benefits are a turnkey solution with no onsite IT guy.
Email and basic office software leads the charge for small businesses moving at least some of their infrastructure to the cloud. According to Sterkenburg, services like Microsoft Office 365 are being bundled, starting at $4 per mailbox per month.
“Pre-cloud, companies would have to have an exchange server at their company someplace, internal people that know how to install the server, make sure it’s up – lots of stuff.” With no in-house person to do the care and feeding of servers, Borrelli said it makes sense.
Greg Gurev is founder and president of MySherpa, a business-technology leader in the greater Wilmington area, who said that 100 percent of his clients use some service in the cloud. He also touts the cloud recovery service for “on demand” spin up of servers from off data sites until on-premise services are restored.
But other cloud services, include Microsoft Office 365, Google Enterprise email and Skype for conferencing and cloud-managed security are highly effective menu choices for businesses looking at their options.
“It is the part of the due diligence process to evaluate the current methods and options to determine suitability,” said Gurev. “There is a trend for CIOs to highly value qualities like nimbleness, scalability and speed of deployment when choosing new platforms.”
Most all CIOs are open, said Gurev, demonstrated by Fortune 500 companies’ adoption of Salesforce.com, a popular SaaS.