Introduction A common understanding of cloud computing is continuously evolving and the terms and concepts used to define it can often be unclear. Media coverage tends to be vague and focus on how cloud computing is the way forward, but not examine what it entails or represents. Therefore, we have chosen to examine the basics of cloud computing and look at what characterises it, how we use it and who is behind it. We have also looked at the transition from personal to professional cloud consumption and how cloud computing has simplified our private lives and is now redefining the way we work. A study conducted by Gartner research and advisory company shows that corporate use of cloud computing will more than double by 2016. The journey to the cloud is in full swing, and for many innovative small and medium sized businesses (SMBs) it has already begun. This whitepaper will therefore address this evolution and provide more in-depth information to help assist your company in the decision making processes around cloud computing by addressing the benefits as well as the challenges. Cloud computing Cloud computing is the use of the Internet to access hardware, software, and other resources. The cloud is at the forefront of today s ever evolving technology changes and it s not just a fad. We are all using the cloud, whether conscious of it or not; our personal files are stored in the cloud, we maintain our friendships via apps in the cloud and many businesses are moving their data to the cloud. Instead of investing money and time on the traditional hardware, software and infrastructure required to run your business successfully, why not leave maintenance and servicing to the experts? Cloud computing allows you to do exactly that. Software-as-a-Service (SaaS) is one of the cloud computing alternatives that many businesses are opting for as it allows you to simply pay for the application required. So IT becomes a service, or set of services, that you simply pay a monthly fee for. According to IT visionary Nicholas Carr, the IT resources of the future will only be available online. The shift from traditional software models to the cloud service model, has steadily gained momentum over the last 10 years. Looking ahead we can see that the next decade of cloud computing promises new ways of collaboration. Research by IDC indicates that SaaS solutions are set to grow six times faster than all software and to show annual growth of around 26% through to 2014 (1). Many major organisations and government agencies have already embraced this trend and entrusted the cloud to manage their data. They fully appreciate the benefits that come with being able to access their data in real-time, via a browser, from anywhere in the world. Cloud computing is empowering, as anyone in any part of world with an Internet connection and a credit card can run and manage applications in the state of the art global data centres; companies leveraging cloud will be able to innovate cheaper and faster. Jamal Mazhar, Founder and CEO Kaavo Characteristics of cloud computing You pay for the service on a monthly basis You can access it anywhere and anytime via a web browser Data backups and upgrades are handled for you automatically You can easily expand the service as your business grows
Examples of notable companies delivering services from the cloud Google email access, document applications, text translations, maps and web analytics are just a few examples of the services that Google are delivering. Microsoft delivers Microsoft SharePoint and also makes its office applications available in the cloud. Evolution of cloud computing Cloud computing is more an evolution than a revolution. Morten Strand, COO Visma Software We see that we have changed the way we work, everyone expected to see a revolution in the year 2000 around the Internet, and that revolution never happened but the evolution has been extremely strong since then and how we consume services through the Internet, how social media and social networks are building is just a start. - Morten Strand, COO Visma Software (2013). As these new digital tools are becoming common place, our mental approach to business technology and the way we work and communicate is shifting. We are increasingly working on the move from airports, other offices, from home or during the commute meaning we have become more flexible in terms of our physical presence. Thanks to advances in technology, the idea of the office being our primary work location is being challenged as we are no longer anchored to our desks by the telephone. The need to work anywhere, anytime, on any device is evolving and modern offices are changing and adapting to meet this trend. This shift is being endorsed by the next generation of business leaders, who are bringing with them a deep knowledge and understanding of better and faster technologies that can transform the way we work. Many companies and organisations understand that equipping employees with the latest technologies makes good business sense as in turn increases efficiency and productivity. This shift is being endorsed by the next generation of business leaders, who are bringing with them a deep knowledge and understanding of better and faster technologies that can transform the way we work. Many companies and organisations understand that equipping employees with the latest technologies makes good business sense, as in turn increases efficiency and productivity. At the same time, Generation Y is entering the workplace, with different ideas and values. They are typically comfortable with technology and social media as an integrated part of their lives. They are less inclined to segment their lives into compartments of work and play and their behaviours are spreading across generations, as people become more and more familiar with the latest technology and ways of communicating through their personal lives. In the face of this change, the challenge for businesses and organisations lies in the ability to adapt and embrace new technology. This enables people to be as productive at work as they are at home; while attracting and retaining people from all generations and fostering connectivity between these groups. Businesses that are perceived as enabling a more transparent work-life balance through flexible working are more likely to create the right environment to respond to these challenges; one that inspires passion, creativity and innovation. This requires a change in management approach from control to trust, and from presence to output. I don t need a hard disk in my computer if I can get to the server faster carrying around these non-connected computers is byzantine by comparison. Steve Jobs, late chairman of Apple (1997).
Common uses of cloud computing Email it takes a lot of effort and IT resources to set up and manage your own email server. Cloud email systems provide identical functionality, with far less hassle. For example, Hotmail, Gmail and Yahoo. File storage storing files in the cloud offers greater flexibility, enabling you to access data from any computer and from many different devices. So you and your staff always have the right information on hand, anywhere, anytime on any device. For example, Dropbox. Backups cloud backup services automatically back up your data to a safe location so you don t have to worry about full disks or corrupted files. This reduces the burden on your IT team. For example, icloud. Accounting a cloud accounting service enables you to process day-to-day transactions efficiently, and grant remote access to users. For example, Visma eaccounting. CRM lets you connect to your customers in a whole new way. For example, Visma.net SuperOffice CRM. HR covers your HR needs in the cloud. So you have an on-demand solution that you can access anytime, anywhere, on any device. For example, Visma.net Expense. ERP combines information about sales, customers and suppliers to create an overall view of your company s processes and prospects and hold it in the cloud where you can access it anywhere, anytime and on any device. For example, Visma.net. Figure 1: Adoption and maturity in the cloud
Business communication in the cloud Although the initial focus of cloud computing has been on private customers, cloud computing offers flexibility, cost reductions and addresses the fundamental IT requirements of industrial companies. Cloud based communication services enable businesses to embed communication capabilities into business applications, such as Enterprise Resource Planning (ERP) systems. This allows you to easily work on the move as you can access the system from your smartphone. This in turn supports increased productivity while away from the office as you are able to access real-time data and make business critical decisions from anywhere in the world. Cloud is about how you do computing, not where you do computing Paul Maritz, CEO of VMware Why you should consider moving your business to the cloud There s no software or hardware to install The beauty of cloud computing is its simplicity. There is no software or hardware to install on the server and thus no infrastructure or maintenance costs. Technical resources within your business are therefore able to focus on value adding activities, as the vendor is taking care of these activities as part of the service. A cloud based business solution is faster and easier to implement as the solution is often less complex. Because the solution is not installed locally, you can be up and running in a fraction of the time required for traditional software solutions, meaning less disruption and quicker adaption. What s more, there are no big upgrade scenarios and the vendor ensures that you are always working on the latest release. So you no longer have to invest time and money in upgrades and can always benefit from the latest and newest functionality. The software is easily accessible Cloud computing enables users worldwide to access their company data from anywhere, at any time, and on any device - without having to download and install anything onto their desktop. All you need is an Internet connection. Since we are increasingly working on the move accessibility is becoming more and more important for us to be able to accomplish our work in a more dynamic collaborative and connected fashion. Cloud computing technology meets this need and endorses these smarter working practices.
Recent research revealed that there is a genuine need for the increased accessibility and flexibility that the cloud provides; 73% of workers in Europe believe their lives would improve significantly if they could work more flexibly; but less than a third of businesses provide this opportunity (9). This is demonstrated below in figure 2. Figure 2: Increased need for accessibility and flexibility that the cloud provides
It promotes scalability that keeps you agile Cloud solutions provide a flexible subscription based structure, where you can easily adapt the solution to meet your business needs. This enables you to meet market fluctuations and keep your business agile so you can exploit opportunities as they appear. Running in the cloud provides a more robust environment that allows your company to quickly scale up their application without a large additional investment, and only pay for what s needed. This flexibility and scalability that the cloud offers, lowers total business costs and allows the solution to grow with your business. This in turn helps you to stay one step ahead of your competitors. It offers reduced and predictable costs Cloud computing is a very cost effective solution for all enterprises, regardless of their size. It eliminates the need to purchase hardware or local software that requires upfront payments, and it requires absolutely no updates. Overhead costs, version upgrades, maintenance, system administration costs, and server failures are now a thing of the past as are managed by your cloud vendor. Once your application is in the cloud, your IT staff no longer need to worry about servers, networking, and operating system software support. Those things are being taken care of by your cloud vendor. It provides integrated and automated business services Cloud solutions automate your business processes, and the services are delivered as a fully integrated solution. You can, for instance, schedule the system to automatically send and receive transactions through the various services to your business partners. Manual business processes are not only inefficient, but are also prone to error. With a cloud version of your ERP solution, you can bundle your software with third-party solutions and upsell your customers with a host of added services. It s time to grow your bottom line. Pros Cons Scalability so you can adapt the solution as your needs change A consistent connection to the Internet is required Always on the latest release and there are no big upgrade scenario Cloud security varies depending on the vendor and is outside of your control Easily accessible, anywhere, anytime, on any device Not all cloud vendors can provide the required customisation Fast deployment as solutions are faster and easier to implement Cloud vendor redundancy, if the vendor goes out of business you may no longer have access to the system or data Most cloud vendors have put a heavy investment in security and backup infrastructure You are required to upgrade to the latest version of every release The cloud vendor provides technical resources It may be difficult to leave the vendor and migrate your data to a new system Online collaborative tools help improve business efficiency You must keep vendor payments current, or you may lose access to the system
Taking the plunge The plunge into the cloud is often based on the following pain points: Lack of resources to build an infrastructure Traditional software licencing costs being too expensive Lack of integration between existing systems Lack of resources to maintain the software, especially IT Lack of technical know-how to maximise the benefits of the IT system Therefore, it is not surprising that SMBs, especially start-ups, have seen the cloud as a very attractive option. However, more experienced SMBs should also be considering the cloud and not only because of the reduced costs. This trend is illustrated below in figure 3. Larger organisations can also benefit greatly from the cloud; they simply need to ensure that the chosen vendor is able to meet their necessary business needs Figure 3: Why medium-sized companies want cloud ERP
Conclusion Today, competitive advantage comes from using the latest cloud technology in an intelligent way. Being able to make decisions based on accurate and up-to-date information, available wherever you are, enables you to respond to customers or send reports on the move. This in turn increases your company s efficiency and enables you to be one step ahead of the competition. Organisations that best adapt their business models, infrastructure and culture to get the most of their technology and employees will be best positioned to overcome future challenges and competition and in turn increase their productivity. Cloud technology solves many of the issues confronting today s increasingly complicated and constantly evolving business environment. Most importantly, the pressure organisations are faced to get work done faster, more efficiently and economically. As well as enabling them to accomplish work in a more dynamic, collaborative and connected fashion. The additional benefits that can be gained from embracing cloud technology and this new way of working it promotes are endless. Visma s vision of the cloud Visma is the Nordics leading supplier of business software and services. For the last 17 years Visma has been leading the way with on-premise solutions and is now ready to revolutionise the way businesses work by taking them to the cloud with Visma.net. Visma.net is Visma s flagship cloud offering. It promotes smarter working practices that help you stay ahead of the competition by connecting your team and your data through online tools. It offers the same speed and ease of use of local systems, with all the benefits of the cloud. The beauty of Visma.net is that it enables the whole organisation to be more productive with technology at work. So the easy online tools that have simplified our personal lives are now available in our professional lives with Visma.net. As the Nordics leading supplier of business software and services, Visma has extensive experience in automating business processes in all segments. Visma has combined its expertise to create Visma.net, a best-of-breed online business solution, designed to help you work smarter not harder. What do the market players think about cloud computing? A report published by IDG Enterprise (10) highlighted the key cloud computing trends and future effects identified in a recent survey as follows: 49% of executive-level management see cloud computing as transformational to their business strategies. 40% are currently having their IT staff investigate the potential of cloud computing contributing to their businesses, 5% don t see cloud as an option and 6% aren t sure. Amazon (32%), Microsoft MSFT +0.3% (23%) and Google GOOG -0.1% (20%) are most often considered thought leaders in the field of cloud computing by respondents to the IDG survey. Enabling business continuity (43%), greater flexibility to react to changing market conditions (40%), speed of deployment (39%) and improving customer support or services (38%) are the top four drivers of investment in cloud computing technology according to the survey. Accelerating business value by providing access to critical business data and applications (56%); serving as a catalyst of IT innovation (56%); enabling greater employee collaboration (54%); and enabling greater levels of IT agility (54%) are the top four benefits enterprises are gaining from cloud-based applications. Financial Services and high tech companies are projected to have the largest cloud computing budgets based on the survey. Enterprises are expected to invest an average of $1.5M in cloud-based services during the 2013 2014
timeframe. IDG projects that large companies will spend $2.8M relative to small and medium-sized businesses investing $486K on average. The three most important factors in selecting a SaaS application provider include the ability to configure and customize the cloud application to meet specific business needs (40%), consistent cloud application performance and availability (38%) and security certification and practices of the SaaS provider (34%). 61% of enterprises have at least one application that is cloud-based in their organizations today. This increased from 57% in 2012. 24% of enterprises are planning to implement cloud applications in the next 12 months and 15% are planning to between 1 to three years from now. List of sources (1) NetSuite The benefits of running your business software in the cloud (2) Salesforce What is cloud computing? (3) IMA Is cloud computing right for you? (4) Booz & Company ERP in the cloud (5) GFI Software On-premise vs. cloud-based solutions (6) Dialogic Introduction to cloud computing (7) Accumatica Are you in the cloud? 5 reasons you should be How cloud ERP software can benefit your business Cloud ERP (8) FinancialForce.com Benefits of cloud accounting (9) Microsoft The new world of work (10) Forbes IDG Cloud Computing Survey: Security, Integration Challenge Growth 10 Quotes on cloud computing that really say it all (11) Sage Gain the cloud advantage (12) Cloud Provider USA 5 quotes explaining cloud computing (13) T-Systems Alternative sourcing strategy for business ICT (14) Visma Cloud computing er førsteprioriteten til innovative ledere