In its August 2021 report, Gartner was forecasting that the 2022 worldwide spend on public cloud services will reach US$482bn compared to US$314bn in 2020. Clearly more businesses are moving to the cloud, more rapidly than ever before.
On premise and cloud solutions each have both advantages and disadvantages. Whatever you choose will depend on your own particular needs. In this article we will look at cloud computing and some of the factors that will help you decide what is best for your organisation.
The basics of cloud computing
With an on premise solution an organisation has its own IT infrastructure. This means that it buys or leases its equipment, applications and software as well as taking responsibility for maintenance, security and for keeping each of the separate parts up to date. The IT experts required to manage this will either be in-house or, as is often the case with smaller organisations, contractors. All this becomes more of a challenge when a business is experiencing fast growth.
With cloud computing, on the other hand, the vendor shoulders most of the burden. Cloud solutions rely on the internet connecting users to servers that host both the applications and the associated data.
There are three basic levels of cloud computing consisting of the following:
1. SaaS – Software as a Service: where the vendor provides specific software that is accessible through the internet and is often paid for monthly. An example would be Intuit’s QuickBooks, in return for a monthly fee they allow access via the internet and take care of everything. Other examples include Salesforce, Gmail, Dropbox and Pipedrive.
2. IaaS – Infrastructure as a Service: this is where servers, networks, storage and operating systems are rented according to demand. For IaaS think companies like Amazon Web Services (AWS) and Rackspace
3. PaaS – Platform as a Service: with this comes the provision of hardware, software and infrastructure for developing, running and managing applications. PaaS is often purchased on a pay-as-you-go basis, whereby payment is made only for those resources used.
Why are organisations moving to the cloud?
Costs – there are no upfront costs with the cloud, the investment required for an on premise solution is replaced with predictable monthly payments that also cover software licences, support, upgrades and security, and are adjusted according to resources used. This is advantageous when an organisation is growing (see scalability below) or contracting, in which case usage can be scaled down. When making the decision however, an organisation has to weigh up these lower, regular, relatively predictable costs against an on premise cost spread over the lifetime of the investment (to which must be added support, maintenance, licence fees, power etc.).
Security – with cloud solutions there is a lower risk of significant losses being incurred. For example, security measures are likely to be much more comprehensive and sophisticated than those that would be found in a small or medium sized organisation. Cloud vendors will have in place disaster recovery plans and solutions to prevent data loss through such things as equipment failure, fire and theft. What is more, because the data is accessible from anywhere, business continuity is less of a challenge should a local disaster strike. Cloud services can be accessed from wherever the user is based. In addition to high security standards, software will be kept up to date, with the benefit of both security and access to the latest features.
Some industries manage sensitive data and need to stay in full control. For this reason they will likely prefer an on premises solution. Indeed, some companies are subject to regulatory control that requires they know exactly where their data is being stored. Such controls will not necessarily preclude using the cloud, it just means one must ensure a vendor is compliant with all the applicable regulations within the user’s industry.
Scalability – when your organisation is growing, by using the cloud you won’t have to invest in additional hardware or infrastructure. No additional purchasing, maintenance or office space is required. You only pay for what you use and can easily scale up to meet additional demand (and, importantly, scale back when this is appropriate).
Easy access – the cloud is accessed from anywhere, simply by logging on using a browser, a web-based application or a mobile app, often from any type of device. Cloud based solutions have brought increased flexibility to organisations as working from home was first necessary and is now so popular. Of course, the downside is that cloud solutions require a reliable internet connection for a user to be productive.
Team collaboration – with the recent growth in remote working, the cloud makes team collaboration much easier. Team members can work from anywhere that has access to the internet, sharing resources and being able to work just as closely with their colleagues as if they were in the same office. This is of course also possible with on premises solutions and software, but takes much more time to set up, maintain and protect.
On premises or cloud, which is best for your organisation?
This decision is one that will be based on individual needs, both solutions having advantages and disadvantages. Having looked at the pros and cons of both ways of working (and possibly also a hybrid version) you need to ask yourself whether your business actually needs the cloud, and more specifically:
1. What business are you in? Some industries have regulations that determine where data must be stored and the security that must be in place. This will also determine your specific requirements, for a example the needs of a health provider will be different to a PR agency. The size and nature of your business will dictate its needs.
2. Where is my data? Again, some industries have their own rules and regulations, banks being an example. Also, the distance between the user and the data centre affects what is known as latency. Network latency is the time it takes for a data packet to go from one place to another – higher latency will negatively affect the user experience.
3. What is the uptime and reliability? Downtime means losses. Where you see a 99.9% uptime guarantee you need to know what measures are in place to cover the possible 8 hours each year when the system could be down. Take a close look at the provider’s SLA and what remedies will be available should these standards not be met.
4. Who owns the data? You need to ensure the service provider is acting as guardian of your data when it moves to the cloud. Make sure the small print does not remove any of your rights, that the data remains yours, and that you are only granting access to it (see also below what happens on cancellation of the contract).
5. Who has access to our data? The cloud provider must have access to the data and should have in place proper systems when vetting its employees and suitable controls in place when allowing access to those employees. There should also be audit trails available to determine who has accessed your data and when.
6. What security is in place? It is crucial that a provider is able to give the peace of mind that your data is adequately protected, also that suitable measures are in place to ensure business continuity, for example with backups, restorations and disaster recovery . If you are in a regulated industry both the necessary security and compliance standards must be met in full.
7. What are the costs? Different providers have different ways of charging, although they should be related to resources used. Much like data costs on mobile phones, you need to understand the basis of the charge and ideally have in place a mechanism that warns you should consumption go above certain limits. Moving to the cloud will also require some investment, this will be in the migration of data and to ensure you have the equipment to take full advantage of the benefits that come with a cloud service.
8. What happens in the event of cancellation? A subscription model means you should be able to cancel at short notice. Find out how this is done, the terms, and how your data is moved if this should be necessary. If you do move, you will also want to ensure your data is removed from the provider’s servers.
Moving to the cloud can make sound business sense, both financially and in a way that will provide you with new options and capabilities without the need for a significant upfront investment. However, you need to look very closely at the technical aspects of a move, the changes that will be needed in the way you work and give consideration to the control of your data. If you do decide on the cloud, moving information and operations is something that will require careful planning. Choosing the right partner to help you do this is essential, one that will ensure the migration will be as smooth and painless as possible. An increasing number of our CompassAirclients are choosing the cloud. To find out how we can help, contact us at any time for an informal discussion.
A few words about CompassAir
Creating solutions for the global maritime sector, CompassAir develops state of the art messaging and business application software designed to maximise ROI. Our software is used across the sector, including by Sale and Purchase brokers (S&P/SnP), Chartering brokers, Owners, Managers and Operators.
Through its shipping and shipbroking clients, ranging from recognised World leaders through to the smallest, most dynamic independent companies, CompassAir has a significant presence in the major maritime centres throughout Europe, the US and Asia.
Our flagship solution is designed to simplify collaboration for teams within and across continents, allowing access to group mailboxes at astounding speed using tools that remove the stress from handling thousands of emails a day. It can be cloud based or on premise. To find out more contact email@example.com. If you are new to shipping, or just want to find out more about this exciting and challenging sector, the CompassAirShipping Guide might prove to be an interesting read.
Contact us for more information or a short demonstration on how CompassAir can benefit your business, and find out how we can help your teams improve collaboration and increase productivity.