Curt Frierson, EVP Technology and Education
By now, anyone remotely involved in information technology should be familiar with the terms cloud computing, software-as-a-service, and hosted solutions. If not, I would suggest getting up to speed as soon as possible. These terms are sometimes used interchangeably and relate to a new chapter in the history and evolution of computing; one that will eventually create a fundamental and permanent shift in the way businesses utilize software and computing. This shift will occur because of the massive economic and strategic benefits of the new “cloud” models. To accommodate this change, Safe Systems is positioning our business to provide the greatest benefits of cloud solutions to our clients, while still allowing customers to choose the level of control over their environment that matches their individual business need and strategy.
Let me first provide a brief description of these new methods of providing software and IT services:
- Software-as-a-Service (SaaS) – SaaS provides software applications running on a third-party’s systems to an end-user organization over an Internet connection. SaaS typically provides a single instance of a software application to multiple organizations at the same time. This is referred to as “multi-tenancy,” or multiple, separate entities sharing the same application environment. In this model, there must be strong application controls to segregate and secure each organization’s data.
- Cloud Computing – Cloud computing, in its most general definition, is a pool of network computing resources that is capable of rapidly expanding or contracting to accommodate demand. Cloud computing typically involves virtualization to provide the required flexibility and eliminate the bonds of operating systems and applications to physical machines. There are actually several different types of cloud computing, but the two most often discussed are private cloud and public cloud.
- Public Cloud – A public cloud is an environment that is shared between many different organizations. This environment is typically owned and operated by a third-party service provider. Although there may be controls to keep each organization’s data separated and secured, the pool of underlying resources is common across all organizations.
- Private Cloud – A private cloud has all of the features of cloud computing, but is designated solely for a single organization. It can be located within the end-user organization or provided through a third-party service provider; however, the pool of underlying resources is completely separate from other organizations’ environments.
- Hosted Solutions – Hosted solutions is an umbrella term that can include both of the previous models, among others. The key characteristic of hosted services is that a third-party is providing the resources and wrapping a service around those resources to add value to the overall solution for the organization.
Now that we’ve defined these terms, let’s look at why these new models make sense. By identifying the below benefits, we can begin to understand the importance of this fundamental shift and its long-term implications on the future of information technology.
- The service provider bears the high costs of building and managing the systems involved in these delivery models. Because of economies of scale, however, providers can typically offer their services at a more realistic price point for smaller organizations.
- Software licenses, updates, and hosting costs are bundled into a single recurring fee for the customer, making it predictable to budget from year to year.
- Implementation fees are typically much less than traditional on-premise solutions.
Ease of Implementation:
- The solution is already installed and running at the service provider’s site so there is little or no server-side setup involved for the customer.
- Many software-as-a-service solutions are accessed through a common web-browser; therefore, no client application installation is required.
- Since costs are based on usage, customers no longer have to perform long range capacity planning for systems. Additional users or capacity can be added quickly.
- Customers are no longer bound by CapEx expenditures on internal systems for 3 to 5 years. If a solution doesn’t fit their needs, they are not stuck with “shelfware” and waiting for it to depreciate off their books.
Access to Leading Technologies:
- Cloud delivery models can enable small companies to benefit from the same leading technologies that large corporations use without requiring the level of investment and expertise it would typically take to implement and manage the system internally.
Focus on Core Business:
- Organizations can implement new technology without requiring their IT staff to become experts on every new system.
- By reducing the amount of management attention involved in managing complex internal systems, organizations can focus on issues that help drive the business.
Service Provider Expertise:
- Cloud service providers must be utterly committed to providing the highest standards in the delivery of their services in order to be successful. Therefore, service providers are required to be experts in the software and technologies being offered to their customers.
- Strong customer support is essential for the service provider to retain customers, so customers can and should expect the highest levels of service.
Business Continuity & Disaster Recovery:
- It can be extremely cost prohibitive for smaller organizations to implement robust disaster recovery strategies for all of the technologies they utilize. Because these services are the major driver of a cloud service provider’s business, they must incorporate extensive business continuity and disaster recovery procedures into their solutions, including a highly available and fully redundant environment to house this technology. The benefits of those BCP/DR procedures are shared by all of the service provider’s customers.
These benefits are just a sample of the many advantages offered by the new cloud services models. As the technology evolves, many new benefits will likely emerge. One thing is for certain, all IT companies, including software vendors, hardware manufacturers, and service providers, are preparing for this unstoppable shift in the way that software and IT services are delivered. As your technology partner, Safe Systems is committed to ensuring our customers can leverage the benefits of hosted solutions to help you survive during these troubled times and thrive in the days to come. To find out more about our Hosted Solutions, please contact your Account Manager.