The grand vision of cloud computing, which promises an
end to the stress and cost of supporting internal applications,
took a dent in February. The leading proponent of cloud computing,
and standard-bearer for the post-dot.com internet, suffered an
embarrassing outage.
Google's web mail servers dropped the ball for about three hours
and users could not access Google Docs - the rival to Microsoft
Office which stores and processes personal productivity
applications in the cloud - a virtualised internet-connected server
environment.
"Cloud computing may be great in principle," said
Observer columnist John Naughton. "But it might not be wise to
bet the ranch on it."
But would the problem destroy the argument in favour of the
cloud computing model? After all, internal e-mail servers have
their glitches, and desk-based PCs do crash.
For Andrew Shebbeare, partner and co-founder of digital
marketing firm Essence, cloud computing is still attractive.
Essence uses Google's online mail service Gmail and its online
document creation and sharing system, Google Docs.
"We used to run Small Business Server from Microsoft," Shebbeare
says. "It was expensive to support and not all that reliable. We
had only one server and needed to upgrade it to run Enterprise
Outlook, which would have cost £10,000."
The enterprise system from Google costs just £700 a year, he
says. Although Gmail is now the company's main e-mail system,
Google Docs has not replaced Microsoft Office. Rather, it provides
inexpensive online collaboration, he says.
In the end, the return on investment, compared to buying and
servicing an in-house e-mail server, was "compelling", Shebbeare
says.
Clive Longbottom, service director at analyst company Quocerca,
says small and medium sized enterprises (SMEs) will be able to save
time and money by investing in cloud computing for certain
applications. "SMEs do not have a datacentre, they have a computer
room. When the realise they cannot cope with the workload, what are
they going to do?
"By outsourcing, you can say to the cloud provider: we do not
know what the workload will be, we plan for our main ongoing needs,
but if it goes above that you provide extra resources [at a cost].
If we do that regularly we renegotiate the main deal."
This means businesses can increase costs incrementally,
alongside demand for a service, instead of making a large
investment once demand goes above a certain threshold.
Microsoft's cloud offerings
Although it dominates the desktop application market, Microsoft
also sees strong benefits in cloud computing. It already offers its
ubiquitous Microsoft Office applications as a service, hosted in
the cloud, in a similar way to Google Docs.
Microsoft is also offering its suite of Microsoft Dynamics
business applications, including customer relationship management
(CRM) and enterprise resource planning style packages, to small
businesses via the cloud. In a partnership with the Institute of
Directors (IoD) in the UK, it is offering a hosted version of its
Dynamics CRM package for £35 a month for IoD members.
Robert Epstein, head of SMB sales and marketing at Microsoft in
the UK, says a community of service partners will develop in cloud
computing, in a similar way to the company's distributor network.
"Businesses may want help integrating cloud applications with their
Active Directory, for single sign-on, for example; our partners can
help in this."
Salesforce.com, which hosts CRM applications in the cloud, also
sees an ecosystem of providers growing around cloud computing.
However, it will still host the main CRM application and publish
services to other providers, which in turn offer the application
front-end to users.
For salesforce.com, users and third-parties must be able to know
who they can trust for the cloud computing model to grow, says
Robin Daniels, senior manager of product marketing at
Salesforce.com.
This is the reason the application provider dedicates a website
to live server availability statistics and historic performance
data. "Trust has got to be integral to cloud computing. This is why
we have decided to open the kimono. I do not know of another
company doing that. When you put trust in someone's data services
you need to know what their reliability is," Daniels says.
Despite all the enthusiasm for cloud computing, businesses
should still be cautious, according to Jon Collins, managing
director of analyst firm Freeform Dynamics. "You do not do
something just because everybody is talking about it," he says.
SMEs in the cloud
Research from Freeform Dynamics shows that despite the hype few
small businesses are investing in cloud computing. Cloud computing
could offer the best way to support complex applications that
become periodically hungry for resources, such as in scientific
computing or business intelligence programmes. In these cases,
server resources bought by the mips can save a lot of capital
investment in hardware.
Chris Lindsay, general manager for business applications at BT,
says smaller firms that have no experience of business applications
would benefit most from cloud computing. "Most SMEs have the CRM on
spreadsheets. Getting a business application is too big and too
scary," he says.
He says hosting companies offering "try before you buy" deals
can help SMEs understand the benefits of these applications running
their business data with relatively low risk.