Investing in IT: Part 4 - Cloud computing concepts
Earlier in this series, we looked at some of the factors businesses should consider when investing in IT hardware and software. The next stage is to identify the best way to implement and manage the different hardware and software your business wishes to deploy.
Whilst many larger organisations still prefer to have full control over their IT infrastructure, and possess the resources to do so, others prefer to outsource key services, or alternatively, adopt a hybrid approach using a combination of internal and external IT systems and resources. For many small and growing business, building and maintaining an IT infrastructure can be costly and complex. Fortunately, technology service providers have recognised the need to make systems and applications more readily available and easily scalable to customers.
This is why cloud computing has become ubiquitous in the business world, simplifying how IT services are provided and how software can be deployed within organisations, reducing the need to invest in costly back-end hardware such as servers and networking equipment.
What is cloud computing?
Simply, cloud computing involves the provision of IT services over the internet. A common example of this is email. Many businesses have now moved away from the more traditional method of maintaining their email services on servers held on their premises. Email services are now readily accessible on a range of publicly available resources, such as Microsoft Outlook and Gmail. Services like these are commonly accessed via your internet browser, increasing users’ ability to access their email and other key business resources wherever they are and on any device.
Cost benefits of the cloud
Many new and growing businesses prefer to spread the cost of their IT investment and reduce initial outlay. Cloud computing allows businesses to minimise IT capital investment by adopting services on an on-demand basis, and manage that investment as smaller, more predictable ongoing operational costs. Rather than investing in back-end hardware required to run more complex applications, services can be purchased, renewed, maintained and supported on a periodic basis, usually on a subscription based pricing model. As the business grows, services can be quickly and easily scaled up to cope with the additional demand, with many services being offered on an individual user or per device model. When no longer required, the subscription can be terminated without being left with outdated hardware which depreciates in value over time, as all the costly aspects of managing the services are borne by the technology service provider, and those costs are often divided by multiple clients sharing the same services.
Types of cloud services
There are three types of cloud services which are often adopted by businesses. These are:
Software as a service (SaaS) – Purchasing applications which are hosted by a software vendor and made available to the user over the internet. Such services have become common for email, accounting applications, and CRM systems.
Platform as a service (PaaS) – Where specialist hardware and software tools are provided to customers over the internet removing the need to invest in the underlying infrastructure, or having to download, install and maintain software.
Infrastructure as a service (IaaS) – Where processing, storage, network and other computing resources required to run an IT system are sourced from a cloud service provider.
The services above all share the same principles of cloud computing, and can be used in conjunction with one another to create a complete and all-encompassing business IT system.
Public and private cloud
Cloud environments are commonly termed as public or private.
As the name suggests, private cloud environments are dedicated to the business which purchases, deploys and maintains it.
In contrast, public cloud systems provides internet based computing to multiple clients and are made available to any organisation that request its use. Two of the more prevalent public cloud service providers are Microsoft and their Azure platform, and Amazon Web Services (AWS).
Many organisations use a combination of private and public cloud environments to create a hybrid IT system. This model is becoming all the more appealing to businesses given the value and flexibility it offers. By understanding the advantages and disadvantages of cloud services, a business can implement a technology strategy which supports their business objectives, and is flexible and cost-effective to accommodate immediate needs as well as future growth plans.
Because cloud computing can encompass a broad range of systems and services, it can be difficult to explain in detail the advantages and disadvantages of the IT model. Each particular service needs to be evaluated to understand the benefits it can provide to the individual aspects of a business. Some of the advantages and disadvantages are summarised below, and apply to most instances of cloud computing services.
Reduce or remove upfront or capital costs
Minimse IT implementation costs
Lower cost licensing, maintenance and support fees
Less investment required into back-end hardware
No operating systems, database or applications servers to install
Reduce costs in hiring IT consultants and staff
Software and services usually accessible via web browsers
Improved scalability, eliminate cost and complexity of managing different layers of hardware and software
May not be attractive to larger companies and their application needs
Responsibility of data storage and control is in the hands of the provider
Security risks may increase and open vulnerabilities to data maintenance, although this is decreasing as technology improves
Potential system reliability issues
Business dependency on the cloud computing provider
Capitalising on the cloud
As part of your technology strategy, consider some of your workflows, and what technology would be required to efficiently achieve them. Draw up a list of items noting what purpose they can serve, whether it would be best to lease or purchase the relevant hardware and software, and the approximate capital and operational costs.
Investing in IT can be a difficult area for businesses. There is plenty of help available to support investment plans and IT systems, and partnering with the right organisation can be essential to a business’s success.
marketpreneurs can help you make the most of your IT budget and investment. If you have a technology based project, why not take a look at some of our IT services, or request a quote for an adhoc IT project.