Getting the Business Edge: IT simply applied

July 4, 2012

Ray Smyth of Swindon’s The IPstore says: “To gain any of the economic benefits offed by cloud computing, it is necessary to increase IT planning, control and management. Care must be taken…”
This month I am looking at the economics of the cloud. A lot is claimed, especially about the savings on offer. In order to evaluate putative savings, a new cloud service needs to be compared with either an existing or planned in-house service.
Accordingly, the savings will vary as the specifics of each situation unfold. However, there is one area that is likely to be universally true: in-house provisioning of an IT service will consist of capital expenditure (CapEx) and possibly recurrent costs (OpEx), whereas a cloud-based service is likely to be primarily, if not exclusively OpEx.
This alone could be an exciting prospect for a business considering a new IT investment; it must never be the main driver. Neither should the cloud be considered as an all-or-nothing option; in fact, a new project is likely to prove a good place to start, providing it co-exists with existing services.
Cloud services are generally charged on a pay-as-you-use basis using virtual computing (virtualisation). In essence, a physical server when virtualised can provide a large number of virtual servers; because the virtual servers are defined by software, any business can provision and vary services in quite literally minutes, making it easy and effective to handle exceptional or peak workloads, temporary staff, and projects.
Cloud computing will offer some benefit to all organisations and for the majority, a hybrid (premises and cloud) deployment will be best. 
Any headline savings can quickly turn very bad when the cloud service is not properly planned and provisioned.
A significant concern – an unfolding situation – is data. The chance of irretrievably losing your data is substantially reduced when using cloud-based storage. 
This is because data centres should have a mirrored facility, possibly on another continent. But this can also be the problem because locations outside of the UK might give rise to a breach of industry regulation or data protection legislation. 
You need to know where your data resides and in how many instances – don’t forget back-ups. You also need to be legally certain that your data remains your data. There have been cases where standard terms and conditions, ticked on-line by an IT Manager have unwittingly conferred data ownership rights on the provider.
Experts seem to agree that the law needs reform in many areas concerning the internet and its environs, so care is needed because the economics of error are very harsh, possibly deadly. Don’t just grab the savings on offer and use the cloud as a tool to deliver IT services once you know it makes sense for your business.

Comments are closed.


Reach tens of thousands of senior business people across Swindon & Wiltshire for just £70 a month. Email for more information.