The subject of Cloud computing has come up a couple of times recently. There has been a discussion on the Banbury Business Networking Facebook group, and an article in Computer Weekly last month.

Cloud computing and SaaS (Software as a Service) allows you to use applications without them being installed on your PC or server. All you need is an Internet Connection and a web browser on your PC. Many people are moving to cloud computing, but it is right for you?

The ‘cloud’ is a relatively new term generally used with mass-market applications such as ‘office’ suites. Proponents draw a cloud with lots of computers attached saying you don’t need to know what happens in the cloud … it’s all a bit vague and fluffy.

SaaS (software as a service) has been around for about 15 years, and usually refers to a customised application delivered over the Internet.

So what are the pros and cons?

It’s no different from any outsourcing decision – there are just a few nuances because of the technology. In essence, if you outsource it can be cheaper, but you will lose some control.

Using the cloud

Google and others offering ‘office’ applications over the web will charge you a monthly or annual fee to use the applications and store your data. The service is scalable so you can add and subtract users according to your business needs. As you’re not running the application locally, the age and performance of your computer is less critical, but it isn’t irrelevant. What becomes critical is your Internet connection.

Google have a commendable record for keeping their cloud services on line and functioning because they’ve invested heavily in their technology. To start with, they have many servers in different locations. Google has also designed the infrastructure to continue functioning if part of it fails. If you’re considering signing up with a smaller supplier, check their infrastructure and business continuity planning (what they’ll do in the event of a failure).

Software as a Service (SaaS)

Specific business applications (accounting, for example), are delivered by SaaS. The questions to ask are still about their infrastructure and business continuity plan. Don’t be swayed by a percentage up-time. Check with the supplier what it refers to (e.g. the server is running or the application is available), and if it excludes anything, such as their internet connection – they might argue it’s not relevant, but it will still affect the service you get.

Lets pick out two issues you’ll have to consider:

1. Cost – cloud & SaaS
   The fees for cloud computing or SaaS are usually paid monthly (good for cash flow), and include upgrades to the application. It is certainly cheaper to start with as there’s no initial purchase of software licenses or equipment.
2. Cost – local applications
   If you run the application locally, you may not have to upgrade each time there’s a new version.
3. Access – cloud & SaaS
   With some (but not all) of these services, you can access your applications and data from anywhere with an Internet connection. It also means you don’t have to copy and synchronise data. Useful if you travel a lot, but of limited benefit if you only work at one location. Remember that if you stop paying your supplier, you lose access to the applications AND your data.
4. Access – local applications
   You don’t need an Internet connection to access your applications and data – broadband problems can mean days without Internet access.

Summary

Google is a large and stable company. Some of the newer players in the market won’t have the same staying power as Google, and are bound to disappear. What will happen to your data then?

If you run your application locally and the supplier fails, you may have support and maintenance issues but your application and data will still be available.

If you choose or have to switch cloud suppliers, how easy will it be to transfer all your data and adapt to the new systems and processes? Probably no less work than changing a local system.

Which will be best and cheapest in the long term? Only you can make that decision for your business.