“Cloud computing” is shaking up the business world. But what is it, and how can it help your start-up?
Over the last couple of years, the phrase “cloud computing” has been used more and more frequently both within and outside the business world. This rather poetic piece of technical jargon is often accompanied by words like “revolutionary”, “game-changing” and “paradigm-shifting” – and indeed its impact upon the business landscape, at both ends of the scale, has the potential to be just that. But right now, is the hype justified? And just what does the “cloud” mean anyway?
Put simply, cloud computing is delivering software over a network – normally the internet – rather than storing it on a computer on site: “the cloud” in this case just means the network itself (and again this most commonly refers to the internet). There isn’t anything especially new about cloud computing – anyone using Hotmail, Gmail or any other webmail service will have been familiar with having their email run on the cloud, while every time you watch a clip on YouTube you are accessing, via your browser, software stored on servers potentially thousands of miles away – but recently there has been an explosion in business-facing software delivered through the cloud which has contributed to the “buzz” around cloud computing and the popularisation of the phrase itself.
One of the main ways in which the cloud model represents a significant shift for business is that it offers an alternative to the licence model which business software typically entails. Rather than spending a significant amount up-front to buy the software, and then shelling out again every year to renew the licence (and possibly, depending on the size of the business and the type of software, having to pay for on-site installation and maintenance and other costs) a company can simply access the software – perhaps on a pay-as-you-go basis – via the internet and use it when it is required (this is of course particularly attractive for software which is used infrequently). A great many different cloud propositions are now being developed catering for all types and sizes of business, many which dramatically undercut traditional licence-based offerings.
The cloud revolution isn’t without its challenges, however. Firstly there are ongoing concerns about security: the growth in cybercrime and the increased sophisticated of hackers were already a concern even for companies hosting all their software on their own premises; cloud computing requires business owners to place a great deal of trust in their providers’ security systems. There are also issues around data legislation: with software being delivered from anywhere in the world, and data being potentially hosted wherever a provider has server space, can a company be sure it is at all times staying within the legal parameters set by the UK and EU?
Nevertheless this is a genuine revolution for businesses which might previously have been unable to afford access to some of the programmes and solutions now being delivered over the cloud. Make sure, right from the start of your IT planning, that you are aware of your cloud options (and the challenges around them). It could shave a significant percentage from your IT spend as well as opening up new avenues to boost your company’s potential.
Words: Jamie Liddell
This article was first published in Your Business with James Caan in January 2012.