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SMBs: How is the cloud different?

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A few weeks ago I asked small business to ponder if the cloud is right for their business suggesting companies do their due diligence before leaping into cloud computing. I specifically suggested companies define what success means and assess if it is in fact achievable. If success can be defined, companies should then determine what business functions need the most help, if their competitors are moving to the cloud and who in their company will benefit most from it (customers, employees or vendors).

Now that you’re excited about the cloud, let’s take a step back to truly understand how cloud computing is different from traditional on-premise IT. There are some fundamental differences between client server computing, the mainstay standard for delivering business applications since the 1980s, and today’s cloud delivery models. Understanding these differences is essential in making sure you take the right steps to benefit from making the move to the cloud and minimize business risk in the process.

The good news is some of today’s experts have weighed in along the way. Erik Knorr, editor in chief of InfoWorld, tackles the cloud value proposition from the IT professional’s perspective and Dell’s own Jim Stikeleather, Chief Innovation Officer, addresses the evolution of cloud computing along with its myths. Jim breaks down the cloud into three basic categories – Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).

Out of the cloud delivery models, SMBs most often turn to SaaS applications given they abstract the underlying cloud computing infrastructure and platform architecture to deliver packaged solutions. These small businesses also typically lack the software development expertise required to leverage either IaaS or PaaS cloud computing models. So what are the basics SMBs need to know about SaaS?

Cost: SaaS application pricing is based on a subscription model – typically on a per user/per month basis. The business does not own the software outright but has a license to use it for the term of the contract which includes maintenance and upgrades. Some applications base the pricing on other dimensions such as database size, or number of entities or usage. Likewise, some SaaS applications use a “Freemium” model wherein a lightweight version of the application is available for free and more full featured versions require a paid subscription. Forrester Research’s Liz Hebert provides a great overview of these evolving SaaS models.

Maintenance and support: SaaS applications are based and supported remotely. Given SaaS applications run on a common infrastructure and in centralized data centers, on-site maintenance is not required. In addition, all software upgrades and support are delivered across a common infrastructure at the same time.

Infrastructure: SaaS applications run on their own infrastructures. This is the major difference between cloud and client server computing. Deploying SaaS applications requires no individual incremental investment in hardware, storage or other data center components. In addition, as SaaS applications serve many companies, they typically run in enterprise class data centers with first class redundancy in networks, storage and computing resources. Studies by leading industry analyst firms have found that SaaS deployments offer a 25-90 percent lower total cost of ownership (TCO) than on-premise deployments.

Access: SaaS applications are accessed over the internet or through a corporate VPN, giving remote and mobile workers easy access to the applications they need in real-time whereas client server applications are accessed over a corporate network and require special access technology be deployed to enable remote access. Depending on the bandwidth requirements of individual SaaS applications, high bandwidth connections might be required to ensure optimal performance.

Security: Security has often been a top concern for companies looking at SaaS applications. A survey conducted by Marketing Solutions Corporation and sponsored by Dell at this year’s Cloud Expo found data security is a barrier for more than half of all respondents while 32 percent cited compliance and 27 percent disaster recovery as issues.

Though concerns remain, a lot of progress has been made in addressing cloud computing security issues. Certifications for SaaS security have emerged such as SAS 70, ISO 27001 and 27002; and best practice organizations, such as the Cloud Security Alliance, are emerging to help businesses better understand and manage cloud security.

While understanding the differences between cloud computing and client server computing will help companies better prepare for migration to the cloud, having a grasp of the differences in cost, maintenance, infrastructure, access and security are critical in helping companies make the move.

What are your thoughts? What has been the tipping point in the journey to the cloud for you?

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