Does cloud computing save money?

20 04 2009

This is something I have been looking into quite a bit in the past 6 months, and though reading lots about the “cloud” suggests this is the case, I have always had my reservations. For me there is a distinct difference between cloud based services, and the cloud itself.

Cloud Services

This is basically software applications that operate in the cloud (SaaS – Software as a Service). Here I can see many cost saving benefits, simply due to licensing and usage. For some time there has been a distinction between “dedicated” licenses and “concurrent” licenses, the second being basically licensing on demand. We have always sold our own licenses for software, such as workFile, workFile EPOS etc on a “concurrent” basis, allowing a 1-10 license model. This means you can have up to 10 users for 1 concurrent license, effectively providing large cost savings.

Cloud Networking and Storage

Ahh, outsourcing your actual hardware and storage capacity requirements. Now here is where my main reservations lie, simply because of cost analysis never seems to be quite right. I have always thought that the more space I used up “in the cloud” would cost more per month, so the larger the organisations requirements, obviously the cost of their “cloud” services would increase. I also believe that the larger the requirement the more cost “ineffective” the cloud could potentially become. I have to be honest, most of my thoughts on this were based on our own hosting programmes that OD Media offer, and our own cloud solutions based on workFile.

Concerns proved?

Today I see that a McKinsey study actually proves my concerns. Let’s face it, large enterprises are not going to commit all their data storage and networks to the “cloud”. So, realistically there will be some hybrid requirement, if one at all. Because of this there really just isn’t any large saving to be made for larger organisations, sure if you outsource everything there will be an admin saving to be made, but since this realistically won’t happen, that saving is negated.

Small businesses? General Public?

This for me is where cloud computing services should be aiming, and in the purest form, cloud computing has been aimed at these areas for some time, just think of outsourcing your website…

There are savings to be made for small businesses, especially if using SaaS. Our own workFile ECM SaaS does provide significant cost savings to small businesses.

The general public will always make savings with SaaS, though with the “cloud” storage I am not so sure. At the end of the day, most members of the general public will purchase a mass storage device, which is more than adequate. So again, SaaS is the only real benefit I see…





Seeing past the marketing cloud, in cloud computing

28 03 2009

A lot of our customers have been talking about “cloud computing” and asking us to explain it in some simpler terms. Some have even got caught up in the marketing hype, of shall we say, the larger cloud computing players. This really isn’t surprising when you start looking around the web for information on cloud computing, it can be quite confusing, full of marketing hype and sometimes, I would say, misleading.

Cloud computing, in its basic form

Let’s look at what cloud computing is. First off, the cloud is just really a term for the internet or externally hosted space. Why cloud? Well for those of you not from a technical background, it’s simply because when diagramming out networks etc, externally hosted content or the internet was drawn as a cloud.

In its basic form, and without any jargon, cloud computing is simply an externally hosted environment, accessed and connected to via the internet. That’s it. Oh, and it’s not a new idea by any means. If you think of it as this pure concept, cloud computing has been used since the birth of the internet. By hosting a web site, which contains content, on a third parties server, which is connected to and accessed by the internet, you effectively are using cloud computing.

So what is new?

Like many things in IT, the concept is nothing new; it isn’t even a new technology. What is new is the way we see that concept and the things we add, or take away. For example, think back to a time before Blogs were on the web. Many of us read news articles on the web, we may have even used forums and discussion boards but never blogged. But, blogging was a massive new thing, and with all the hype that went along with it, many people believed it was some new technology, something that had never been done before. In essence, a blog is just a news article that we can comment on, or it’s a forum where you don’t respond to one topic, you respond to an author’s topics. See, nothing new there. But something new is created, but it’s not a new technology, rather a new way of looking at things. The same is true of cloud computing.

Cloud confusion

Now things get a little complicated when people look at how companies provide their clouds. By this I mean, how the third party actually provides you with hosting space.

Looking at Amazon EC2 (Amazon Elastic Computer Cloud), we see that the implementation is to provide virtual machines for people on their hardware, effectively using one machine as many, expanding virtual machines to meet the usage demands. In this method, Amazon EC2 does give developers a lot of freedom to deliver software in any shape or form. The cloud really is a virtual machine.

Google offers its own cloud computing solution; however, developers have to deliver applications written in Python. This is very limiting, and in essence a developer is not presented with a personal machine, rather a space reserved for them on the Google servers.  

Microsoft’s Azure provides a cloud platform that enables developers to deliver web based applications. As long as you wish to develop in Microsoft technologies, then Azure will provide all that you need to run your applications in the cloud. So this is a little bit of a mix between the Google solution, and the Amazon solution, however Microsoft bundle a lot of extras, such as storage services, Windows Live integration etc.

Please note at no point have I discussed other concepts that often get confused with cloud computing, concepts such as Parallel distributed computing, or Grid computing. We will talk about this another time….

Should you use cloud computing….

I see some real benefits, the obvious being accessibility to your content / applications. However, I see some real pitfalls too, most of which revolve around security, physical locations of content and the freedom to move away from a particular provider. The following article does highlight a number of concerns and issues for businesses. http://www.computerweekly.com/Articles/2009/03/27/235439/security-concerns-for-cloud-computing.htm 

For the general public and even some small businesses, cloud computing makes real sense. They don’t have to invest in expensive hardware, backup and disaster recovery services nor payout for particular software.

A small business though will do well to look to standard webhosting environments and software development companies that provide external hosting of particular applications. My own company provides these services with our workFile ECM platform. We provide a Virtual Server on our externally hosted platform, and allow businesses to access and use all the typical content management functions across the internet. The difference here is that the storage space and physical location of the application and content is known at all times, it isn’t lost in the “cloud” as such. Also workFile is a highly secure repository, encrypting all content within its repository.

Don’t get me wrong, I can see massive potential for cloud computing, but more focused on delivering applications and storage space to the general public.

It’s all in the marketing…

As usual it’s how we market things and cost that determine how successful something is. In the case of “cloud computing” this really is true. However I have missed a trick, that’s for sure. My own company has provided “cloud computing” services and “cloud” applications for sometime. However, it has never been marketed as anything “new”. This is changing though, the language we use, and the way we describe these services will now be communicated as “cloud computing” and “cloud based applications”. And to deliver cloud based solutions, we won’t have to change a line of code….








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