A director s guide: What is cloud computing? An information guide from Access

Transcription

1 A director s guide: What is cloud computing? An information guide from Access consulting software solutions

2 Aim of this guide News of the cloud is everywhere but how much do you know about it? In this guide, we aim to simplify the basic concepts and balance the key benefits and considerations so that you can form your own view on the topic. To make it easier to read, we have included a glossary at the end to explain the terminology we are using here. First concepts The cloud is born Cloud technology dates back to the 1990s, when it was known as ASP. The term cloud stems from a visual metaphor used in computing diagrams to represent the ways computers linked together on one huge infrastructure platform. In 2001, SaaS was introduced as a term for on-demand computing this was principally ASP re-born and it had varying degrees of success. Now, cloud software describes the growing number of software applications that use the web to deliver a service to you. Examples of cloud applications include: Google Docs, Office web apps from Microsoft, MobileMe from Apple, Dropbox and a huge variety of webbased solutions including Gmail. What s it got to do with business and accounting software? With the means to develop, support and maintain cloud software becoming more accessible, an increasing number of business & accounting software vendors now market cloud-based offerings alongside their traditional on premise software. But what exactly is the difference between business and accounting software in the cloud and what you ve got at the moment? Storage, delivery & service Ultimately, it boils down to the way your data is stored, the way it is delivered back to you, and the service that supports the whole process. At present, you probably keep your business data on your hard drive (or in-house server). With a cloud solution, it lives in a data centre managed by a third party. Your space in the cloud In order to take advantage of cloud software, you buy resources as a service and only pay for what you use. This is often referred to as easyin/easy-out meaning you can quickly set up and use the software/service without being tied into a lengthy agreement. Instead of storing your business data in your own office, you use an internet connection to connect to the service, and all the transactions you process and the data you generate will be saved in the cloud. Types of service available Cloud computing describes a range of computer resources that are delivered over the internet. In order to understand the benefits of cloud computing, we need to consider some key examples. SaaS The most well-known is Software as a Service (SaaS). This typically refers to a specific vendor, offering its applications to multiple customers in a hosted model. The enterprise CRM solution Salesforce.com is one such example. For customers, SaaS means no upfront investment in servers or software licensing; for providers, SaaS applications are cheaper to host as there s only one application to manage. IaaS and PaaS Two of the other cloud services you might hear about are Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). The former (laas) is the concept that someone can provide the technical infrastructure for your software, so there s no need to specify the type of hardware you want to use. Companies, such as Rackspace, have added interfaces so businesses can control their allocated cloud infrastructure. PaaS is the same plus a programming language, enabling you to make your SaaS applications accessible from one common platform. PaaS may also include tools that enable you to design, develop and test new applications solely via the internet. Two current-day examples of cloud platforms are Amazon Web Services, launched in 2007, and Microsoft s Windows Azure, launched in All three of these services are usually offered and maintained by third-party providers on a pay-as-you-go basis. At the moment, these are the most common offerings but many continue to emerge as the market matures. Types of cloud There are two definitive types of cloud public and private. Public cloud networks (such as Amazon Web Services) represent mainstream cloud computing, where the provider sells services to anyone and makes its resources available on a self-service basis. Critically, these resources are relatively cheap to access, since the costs of resources and bills are shared by its users. A private (also internal ) cloud is used to describe offerings that replicate cloud computing on private networks. Vendors often propose greater benefits in the areas of security, governance and flexibility. Private cloud networks require levels of internal expertise to set up and manage, which may come at a cost. For this reason, private cloud networks may actually go against the cloud s very premise: to provide large quantities of users with easy, scalable and cost-effective access to relevant computer services. In reality, domestic users and SMEs largely rely on public clouds to fulfil their needs, while enterprise organisations typically use a combination of the two, known as a hybrid. Cloud types, and their typical applications, are shown in the diagram on the page 5. Building the case for cloud In this section, we cover some of the key factors to put forward when building a business case for cloud technology. 2 Access E&OE.

3 Choice The number of business and accounting solutions available online are increasing all the time, and range from basic ledger systems through to fully fledged Enterprise Resource Planning (ERP) solutions. Elasticity The notion of scalability is inherent within the cloud. Because you only pay for what you use in terms of storage, modules and users, you don t have to do much to scale up. The model is simple increase usage, increase costs and vice versa. Cost models The most cost-effective form of cloud computing is the multi-tenanted model. Here, the software itself (and the cost of services to maintain and support it) are spread across all its users. Cloud solutions delivered with a different model are harder to justify on a cost basis. All aspects of the service are rolled together into one fee which is normally paid monthly. This fee varies along with your required changes in your elasticity use. Benefits Linear cost of ownership As you are renting the solution, it becomes a Profit and Loss cost rather than a capital expenditure cost. The pay-as-you go, elastic capacity expands or contracts in line with operational requirements. The main cost benefit is that there is no need to purchase capacity on a worst case scenario basis e.g. if there is a surge in demand over the Christmas period but then the extra capacity is not used at any other point in the year. This linear cost of ownership can have a clear impact on the bottom line. However, it s important to do your sums; the cloud model does not necessarily mean an overall reduction in the cost of ownership. (See considerations: cost.) Lower infrastructure costs Cloud computing removes the need to have software installed on inhouse servers. This not only eliminates the upfront cost of hardware, but reduces the staff costs involved in maintaining the system s infrastructure and upgrades. High availability With the cloud, you re always on, regardless of time or geographic. The ability to view your data 24:7 is not exclusive to the cloud however, it s a given, rather than a nice to have. This is complemented by a growing number of providers who are striving to give you access to information not just anywhere, at any time, but on anything examples being mobile devices such as BlackBerry and iphone. For organisations that look after clients data, for example, accountants, cloud software may be particularly useful. It means you can see data on-demand, produce monthly management accounts, access reports and gain early visibility of any issues. It also means business and client can work on data simultaneously, without having to worry about using different versions of the software. Upgrades Today s good on-premise software providers continually strive to make upgrading as easy as possible, for example, offering downloadable patches to keep costs and downtime to a minimum. Access E&OE. 3

4 Cloud providers take this even further, taking care of all upgrades for you so there s even less to manage. Considerations Of course, no technology is perfect and you will need to balance its benefits against the following considerations to ensure whether a cloud solution is right for your organisation. Cost Relatively low monthly charges for an online business and accounting service may, on the face of it, appear to compare favourably with the up-front (and subsequent maintenance) of an on-premise solution. But do your sums carefully and model the whole cost over a three-to-five year period, taking into account the cloud solution cost and the savings you can make from your existing on-premise solution. Data protection For many businesses, data security or more pertinently, worries about who can access your data is a key concern. Yet any breach of security would hugely damage the provider s reputation, so it is in their best interests to put the highest levels of contingency in place. To this end, seek assurances within the Service Level Agreement (SLA) that your data can only be viewed by securityvetted staff with fully encrypted, role-based access permissions. Also consider whether outsourcing your data to a company with no knowledge of your business is any more of a risk than entrusting the same data within your internal network. Compliance The main point to make here is that the responsibility for remaining compliant still remains with you, not the cloud computing supplier. So you will still be required to seek assurances that your data conforms to, for example, the Data Protection Act. Good vendors will provide warranties as to the treatment of personal data processed within the cloud into your Service Level Agreement (SLA) described later in this guide. Disaster recovery Concerns in this area fall into two camps: internal (what happens if our premises burn down?) and external (what happens if the providers infrastructure fails?) While such concerns are understandable, you may be surprised at the level of protection available within the cloud. Take the internal scenario first. Should you no longer be able to access your premises because of fire, flood etc, all you need to find is office space and the internet and you haven t lost a thing! In the second scenario, the onus is on the data centre supplier to recover your data. This is where vitriolisation (the ability to quickly re-deploy resources) and your Service Level Agreement (SLA) come in. Equipment failure for example will be covered by failover redundancy if one cloud server goes down, it s automatically recovered to another cloud server and you have practically zero down time. So what about terrorism how will the data centre cope if the whole infrastructure is taken out? Typically, a cloud provider will mirror their infrastructure over a number of physical sites. So in the event of a major disruption, your data will be treated in the same way as above, although perhaps with more noticeable downtime to the user. While these measures should provide reassurance, it is also important that you have clear access to the backups of your data, which can be downloaded to your own premises to give additional piece of mind. Configuration If you re used to working closely with your provider to get a customised solution to exactly match your business processes, then you may lose some of this flexibility in the cloud. By using a multi-tenant cloud solution, all organisations using that service will be using the very same software. User configuration is normally quite possible, but wholesale customisation is not. Care is required to ensure that your operational business needs can be met now and in the future from your chosen solution. Support At the moment, you might be quite used to picking up the phone each time you need help. With cloud-based suppliers, online support might be the only option so check how comfortable you d be with this. If your preferred supplier does offer hotline support, be sure to check how the support centre is resourced, where it s based, and that its opening hours tally with yours. Service Level Agreements (SLAs) In commercial terms, a SLA is a set of key performance metrics agreed between the service provider and the customer. In cloud terms, for example, this could be service uptime typically the % of time the services will be available for normal commercial use. The SLA is also the place where the supplier states their key policies regarding data protection, disaster recovery and the like. As usual, it s essential to read the small print and to seek assurances over any of these areas before entering into the contract. Integration Good cloud computer solutions will have the ability to integrate seamlessly with your other systems whether they re existing on-premise applications or other online programmes. For example, if you rely heavily on spreadsheets, you ll need the ability to export information into the online software, work on it, and post it back without any duplication of data (or effort). Levels of integration vary from one supplier to another, so be clear about what you expect and insist on seeing examples of how the integration works in practice. Speed Cloud technology allows for much more efficient computing by centralising storage, memory, processing and bandwidth. 4 Access E&OE.

5 The cloud provider The cloud provider Public cloud Public cloud SME Hybrid cloud Enterprise Connectivity (Network Access) Private cloud SME Enterprise SME Private cloud However, this all could be compromised if your internet connection is not up to scratch. Connection speeds vary hugely and the faster and more reliable the connection, the better it will be. So check that you ve got the bandwidth to run large parts of your business remotely if not, prepare to invest. Be sure that the SLA supporting your internet connection, from each of your required connection points, is robust to support this need. Business process fit As always, it is the needs of the business that should drive the technology employed not the other way round. It may be that you have invested heavily in your existing IT infrastructure, so it may not be possible, cost-effective, or even desirable, to put certain applications in the cloud. In all cases, it s important not to jump straight into a cloud solution without checking what your existing vendor can offer you. Some vendors have made specific areas of their portfolio available within the cloud while still fully supporting the on-premise model; this level of flexibility may offer the best business fit. Upgrades While all cloud providers should take care of upgrades for you, it s well worth checking their upgrade policy. Will you be informed when these take place and with how much notice? Will you have an option to take or not take the upgrade? How much downtime can you expect to lose per month/year? Will training be required for upgrades? Vendor lock in At present, there is no formal protocol to ensure portability between cloud software providers. So if you fall out with your provider, you will have to start again with another one. Beware of how things will work in the case of any dispute the supplier will have the ability to turn your solution off, so be sure the contractual terms are workable. You will also need the ability to port your data should you stop working with a provider, else you will need to maintain the service in order to access your old data. Conclusion We hope this guide has clarified much of the hype around cloud computing. Like any investment, your decision has to be based on a careful balance of the risks and benefits. So do your reading, do your research and do your sums only then will you be able to make an informed decision about whether cloud computing is the right move for you. Access E&OE. 5

6 Glossary Like any emerging technology, cloud computing is awash with its own terminology. Here, we clarify some of the most commonly used terms and acronyms: API stands for Application Programming Interface; creates an open architecture for sharing content between different applications. For example, photos on sites like Flickr can be shared with communities such as Facebook. ASP Microsoft s first tool for developing dynamic web pages. Means that pages can be updated over time and appear fresh to the user on each separate viewing. Easy-in/easy-out allows a business to quickly and easily set up and start using the cloud solution it is also easy to stop using the cloud solution without being tied into a lengthy agreement Hosted model allows software to be run on a server (as oppos ed to desktop applications that are installed on your computer via physical software such as a CD) IaaS Infrastructure as a Service provides a virtual IT environment (i.e. the hardware such as servers and network equipment) delivered via the internet by a provider on a payas-you-go basis. Lock-in dependency on a particular software/cloud vendor for the delivery of the service, in a way that makes it difficult to move to other vendors, should a business wish to change its service provider. Multi-tenancy a single instance of an application running on a server, serving multiple businesses. On-premise software solutions that are physically installed at the customer s location, on their own IT infrastructure and are licensed to that customer PaaS Platform as a Service delivers the computing platform such as the operating system over the internet by a provider on a pay-asyou-go basis. Provisioned rapid deployment of resources such as networks, servers and storage, requiring minimal interaction between customer and supplier RESTful REST stands for Representational State Transfer; REST is a stateless architecture where the API design/capabilities are interdependent with the Cloud Storage System; RESTful refers to how closely the API conforms to the REST approach SaaS Software as a Service delivers cloud applications over the internet by a vendor on a pay-as-you-go basis. Sandbox provides a safe testing environment to try out a software solution or an upgrade, without it impacting on live data. SLA A service level agreement is a contractual agreement, defining the agreed service levels, responsibilities and priorities. This includes guarantees on availability, performance, and other services. References SOAP Simple Object Access Protocol ; XML-based messaging protocol that encodes web service requests and responses and then sends them across the network. SOAP is operation system/protocol independent. User experience the personal experience of the user as a result of interacting with a software application or service. Utility computing metered online computing or storage which is a direct parallel to the way public utilities such as electricity are costed based on usage. Virtualisation creating a virtual version of a server, storage device, network, operating system so that resources are divided into one or more separate areas/environments. E.g. in server virtualisation, software divides a physical machine into many separate virtual machines, each with its own operating system and applications that share the computer s physical resources. Web services web-based application programming interfaces (API) that can be accessed over the Internet, and executed on a remote system where the services are hosted. These are used for instance to integrate cloud solutions with on-premise applications Access E&OE.

7 Who we are Access will give you the advice, tools and clarity you need to make effective decisions, quickly and with certainty. As both a business-focused consultancy and a specialist software developer, we combine our innovative software with practical experience to deliver a solution that s exactly right for you and your business. You can rely on us to provide you with a solution that s simple, proven and relevant to your company. We have over 19 years experience of developing software here in the UK and our regional consultants have tailored and implemented this software all over the UK and in Ireland. The expertise we ve gained gives us an unbeatable ability to accurately assess your needs and deliver maximum impact with ease and confidence. All our software is accredited by industry bodies including the Inland Revenue, the Institute of Chartered Accountants, the Business Software Developers Association and Microsoft. We believe your solution must be ready for the future, as well as right for today. We design and own our software, so we can continually innovate to meet your changing needs as well as those of your industry. For instance, we worked with the Carbon Trust and DEFRA to create a way for your organisation to measure its carbon footprint without adding extra administration or complexity to your current processes. Because your business will constantly evolve, we provide a software solution that grows with you. Our modular software covers a complete range of business, financial and administration processes and can be flexed to give you the precise view of your business that you need at any time. Our supportive consultants combine their first-class software expertise with in-depth industry knowledge to constantly improve and simplify your business processes so that your solution delivers maximum value and a continual return on investment. We ve won many awards over the years and have once again been voted best Mid-tier Software Package at the Accountancy Age awards and also separately by our customers. We are driven to deliver high impact, straightforward solutions. We believe in sustainable business and demonstrate best practice. We are committed to reducing our own carbon footprint. We want to help make your business more competitive and successful. With Access, you can be sure you ve got the clarity you need to reach your business goals. Further information For further information on Access solutions, please telephone us on , info@theaccessgroup.com or, alternatively, visit our website at You can also follow us on Twitter at Access E&OE. 7

8 Winner: Software Package of the Year - Accountancy Age 2010 Winner: Enterprise Accounting & Finance - Sift Media Business Software Satisfaction Awards 2010 Access UK The Old School, Stratford St. Mary Colchester, Essex CO7 6LZ, United Kingdom T T F E info@theaccessgroup.com Access Ireland Plaza 212 Blanchardstown Corporate Park 2 Blanchardstown, Dublin 15, Ireland T +353 (1) F +353 (1) E info@theaccessgroup.ie Winner: Construction Accounting Software of the Year - Construction Computing Awards 2009 Winner: IT in Manufacturing - Manufacturer of the Year Awards 2009 consulting software solutions