Over the past 12 months there has been a lot of talk about Cloud Computing. Vendors have been hyping up how they will deliver their services from the cloud, while organisations have been gushing about the potential cost savings and productivity benefits they’ll reap. However, as with any technology adoption, it is essential to look before you leap. While companies that need speed to market, or SMEs with smaller IT budgets, may see Cloud Computing as a Godsend because there is no initial IT outlay, there are a number of issues which need to be considered carefully.
You’re only as strong as your provider’s servers
Businesses using Cloud Computing are completely dependant on Internet connections in order to access their applications. In particular, they are at the mercy of Cloud Computing providers in terms of application uptime as applications are hosted on the provider’s servers. It is therefore important to establish a service level agreement (SLA), backed up with meaningful penalty clauses, so that if the provider’s servers go down, you know firstly, the likely duration before restoration of service and secondly that they will focus their utmost efforts to achieve that. . Your path to the clouds suddenly becomes one of the most critical components of your IT delivery, and as such needs multiple levels of resilience and redundancy to keep your business processes safe. Once again, having stringent SLAs and smart penalty clauses with your Internet service provider is critical.
Given the potential for Internet problems, many businesses with critical applications are deciding that using Cloud Computing is not yet the best option for them and they are keeping all applications in-house. This offers more control over service levels as it is easier to establish SLAs and ensure they are adhered to when internal teams can easily be contacted and chased when problems occur.
If you do decide that Cloud Computing is worthwhile for your business, make sure you know exactly how outages will be handled and what downtime maximums will be. It would also be prudent to ensure that there is a simple and inexpensive exit strategy, that covers all your data that is in the software-as-a-service provider’s possession so that you are not tied to the provider for several years, or worse your organisation finds its data stranded out of reach. We’ve all heard of Escrow agreements to safeguard us if there are issues with a software supplier, but what is your equivalent course of action for a software-as-a-service provider? Another tip is to ask potential providers how much service level credit they paid out in the last quarter. If it is a substantial figure, it’s time to look elsewhere.
Customisation
Many larger businesses use applications which have been customised to meet their specific needs. However, when the same application is delivered through Cloud Computing it may be more difficult, or even impossible, for the same application to be customised. If the application can be customised, this is likely to be expensive, and there is a question of ownership of this work should you need to exit the service provider. If it cannot be customised then it might not be as effective at meeting business requirements.
Impact on compliance
Cloud Computing also has ramifications when it comes to compliance regulations. For example, the UK has data protection laws which don’t really take into account vendors using server environments based outside the EU. However, the Cloud Computing model means businesses don’t have the same visibility of which server their data is stored on, or where the server is located compared to if they hosted their own servers. This makes it impossible for a proper risk assessment to be carried out. If businesses using Cloud Computing don’t know where their data resides, it will be impossible for them to comply. Data held in some countries can be directly accessed by local governments. This risk is unacceptable for many organisations.
The alternative – a hybrid model
The issues outlined above mean that larger organisations are still wary of Cloud Computing and are choosing a watching brief for now. However, this does mean that they will be missing out on the benefits that it can bring. One way of getting the best of both worlds is to implement a hybrid model. This model has been introduced by a few vendors, such as SAP, which has been criticised for being slow to adapt its solutions to the Cloud. Yet by taking their time, these vendors have come up with an innovative approach which sees businesses have some of their processes in the cloud and others within the business. With the vendor supplying both the traditional solution and the cloud solution integration issues are negligible or non-existent. This approach means that organisations don’t have to put their business critical processes in the cloud if they feel it is too risky. However, by putting less critical processes in the cloud they can still reap the benefits that this approach can bring.
Weighing the options
While Cloud Computing offers some exciting possibilities and allows businesses to run applications without a large initial outlay, clearly businesses must do their due diligence to endure that it is suitable for their organisation. Consider the impact of outages and ensure there are SLAs and adequate exit processes with clearly defined clauses that you understand. Also consider adopting a hybrid approach which will allow your business to feel the benefits without being shouldered with heavy risks. Organisations that look before they leap stand to gain the most from Cloud Computing and will ensure that when it comes to business success, the sky’s the limit.
Alan Bowling is chairman of the SAP UK & Ireland User Group
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