Internet-based applications lighten IT budget, increase productivity
Story by Jessica La Plant-Wikgren
AMIDST AN ECONOMIC CRISIS, businesses have saved thousands of dollars on IT expenses, exploring new technological frontiers and the endless possibilities posed by cloud computing.
A relatively new addition to the digital lexicon, “cloud computing” refers to the practice of storing data and software on the Internet and accessing subscription-based or pay-per-use software through a browser. The technology is also known as software-as-a-service.
Software-as-a-service (SaaS) providers – such as Google Apps – are winning a broad fan base that includes businesses large and small by offering affordable, online data storage and access to a suite of popular, Internet-based applications. One of the most popular SaaS products on the market today – Google Apps for Business – includes spreadsheets, word processing programs, hosted email, and online collaboration tools.
Rather than paying thousands of dollars up-front for a box of software that needs to be perpetually upgraded and updated, businesses pay a monthly or annual fee to access that software through a browser. The vendor takes care of all maintenance chores – including security updates, product upgrades, and protecting data against loss and theft through the use of redundant servers and anti-virus programs.
Saving costs, saving time
AUTOCOMM INC. IS ONE LOCAL COMPANY that has embraced the cloud computing trend. Already, the Appleton-based provider of digital signs, LED displays and LCD monitors has realized enormous benefits, both in terms of cost savings and convenience.
The company made its debut in cloud computing in early 2008, when its founder, Duane Weber, decided to replace his office software suite with Google Apps. He learned about cloud computing from one of his vendors that began experimenting with SaaS solutions three years ago.
“They recommended I look at Google Apps.”
Savings is the number one selling point that caught Weber’s attention.
“We found some very cost effective, highly functional applications,” he said.
For $50 per user per year, Weber is given access to business applications, online collaboration tools, and business-class email service with robust data storage.
Making the offer even more attractive, Google Apps’ migration tool makes it easy to import email, calendar entries and contacts from Microsoft Exchange or Lotus Notes. In addition, Google Docs supports popular file formats, eliminating the need to convert files created in Microsoft Office.
Real-time collaboration tools – such as the software bundled with Google Apps – can make the difference between wooing clients and wowing them.
“Clients can log-in and see the content that we create; they can approve it without us having to email them,” Weber said.
Weber was so pleased with his Google Apps experience, he started to look for more ways to integrate cloud computing into his business workflow.
In 2009, Weber discovered Zoho CRM – an online customer relationship management tool that is full-featured and affordable. Compared to commercial CRMs, Zoho offers 90 percent of the functionality at 20 percent of the cost.
As a consumer and vendor of cloud computing solutions, Weber shares a unique perspective on the industry.
“We (not only) use cloud computing in our business operations, but we also sell cloud computing solutions for one of our digital signage platforms,” Weber said.
The product makes it easy for clients to update content on digital display signs by logging in to a Web portal. Real-time responsiveness and the ability to access data remotely gives cloud computing an edge over desktop applications.
For example, Google Apps includes “Internet Web sites for intercommunications,” Weber said. “You can share (documents) online for online collaborations; that has proved very effective for us.”
Reduced maintenance costs and in-house labor is another selling point. With SaaS products, upgrades occur automatically and more frequently than with traditional, packaged software. Because the software is accessed using a browser, operating system compatibility is not a concern.
“Maintenance, product updates, (and) product upgrades are always being done by the vendor, so I don’t need to have an IT person on staff or employ an IT person to manage it,” Weber said.
Weber believes the future of business computing lies in the cloud. Yet, for many businesses, cloud computing remains an unexplored frontier.
There are several reasons why businesses might be shy about moving their IT infrastructure onto the Internet. Security ranks at the top of the list.
Security concerns have “proved pretty much unfounded,” Weber said. “(We) have 10,000 customer files online, but it’s a very secure system.”
“Our internal systems are more susceptible to failure than (Google) who’s keeping this (data) on redundant servers,” he added.
Another reason for slower adoption may lie in the risk-adverse culture of the business community.
“Business people are – by and large – conservative and not necessarily risk takers,” Weber said. In addition, some information technology workers also are “resistant to change,” because moving data to the cloud could mean the loss of their jobs.
One risk businesses don’t have to worry about is losing money on a product that doesn’t make the cut. Most software-as-a-service products are available on a try-before-you-buy basis, Weber said.
Migrating to the cloud
CLOUD COMPUTING IS BOUND TO BECOME more popular among small to mid-sized businesses as increased demand drives down the costs, said Jeff Sonnleitner, a network specialist instructor at Moraine Park Technical College in Fond du Lac.
The cost involved can be “very expensive,” Sonnleitner said. Right now, most of the players in the cloud computing industry are companies “with 10,000 employees on up – a big company that has a lot of sales people; it’s perfect for something like that.”
“Microsoft and Google are two bigger companies that are really trying to push subscription-based or pay-per-use service software,” Sonnleitner said. “Those two companies will push small businesses into cloud computing and also make it available so it’s affordable.”
Cloud computing offers concrete benefits for both vendors and consumers.
Software vendors, such as Microsoft, look to SaaS as a first-line defense against software piracy, since the applications reside on the vendor’s servers instead of the client’s computer.
For consumers, key benefits include eliminating the need to invest in new hardware, reducing support and maintenance costs, and – to the surprise of some consumers – air-tight security.
“Believe it or not, cloud computing is probably more secure than an individual using a laptop at home or on the road,” Sonnleitner said. When you are running an application from your desktop, “you have to have an anti-virus (program) running on your laptop; whereas, if you were doing cloud computing or subscription-based software, they take care of the anti-virus.”
The origins of cloud computing can be traced back to five years ago, when IBM launched its managed hosting services. Targeted at the e-business community, IBM’s managed service allows companies to access a robust IT infrastructure – hardware and software maintained by IBM – using a Web portal. Since then, industry growth has been slow but steady.
Migration to the cloud will not be overnight, Sonnleitner said.
“Some companies might start out doing smaller things; for example, payroll or credit card processing,” he said.
To determine whether cloud computing is a good match, business owners and IT managers should take the following factors into consideration:
- Costs: Cloud computing may not be cost-effective for many small businesses. Products such as Google Apps represent the best way for smaller companies to get their feet wet; whereas, full-scale SaaS solutions – such as IBM’s Managed Server Services – are better suited for large companies. Migration costs, savings on maintenance and labor, and savings on hardware purchases are all considerations.
- Licensing: With many SaaS products, access is sold on a per-user basis, unlike packaged software, where a single license covers multiple users.
- Business-to-Business Functionality: Some SaaS products automate business-to-business transactions, such as supply-chain management. A technology known as Service-Oriented Architecture – leveraged by some SaaS vendors – allows software applications to directly communicate with each other.
- Service: Businesses should research the type of technical support provided: Is the helpdesk manned by a person 24-7 or an automated answering machine?
For more information on Google Apps for Business, visit:
Virtual servers, real value
SOFTWARE-AS-A-SERVICE began gaining traction about three to five years ago, after the emergence of a technology called “virtualization.”
Virtualization “is multiple computers running inside a single computer,” said Jason Loomans, a network analyst at Moraine Park Technical College.
The technology is used to run multiple, “virtual” servers inside a single server.
“In practice, we can run 10 to 20 virtual servers on one piece of hardware,” Loomans said.
Moraine Park was among the first colleges in the nation to use virtual server technology to power its own IT infrastructure. About 80 percent of the college’s applications are hosted on virtual servers. The college also subscribes to Microsoft Exchange Server, a cloud computing student-email solution.
For companies that possess in-house IT staff, virtualization may be less expensive than cloud computing, said Karl Reischl, MPTC’s head network analyst.
Virtualization enables businesses and organizations to consolidate their IT resources and save upwards of 30 percent of the cost of installing and maintaining a traditional server.
Because one computer can pull the load of 20, there is a “very high consolidation ratio,” Reischl said. “We are able to offer our students more offerings because of the low cost of running servers.”
Along with cost savings, turn-around-time is another advantage.
“It doesn’t take nearly as much time to get a server up and running,” Loomans said.
Network administrators can clone a server template and set up a server that’s ready to use within an hour, compared to a lag time of one to two weeks with traditional servers.
Virtualization has made it cost-effective for companies such as Google and Microsoft to host software applications on virtual servers, selling access to those applications – combined with technical support and maintenance – to millions of customers as an all-inclusive deal.
Because running a virtual server in-house requires specialized IT skills, Reischl said the technology is most cost-effective for medium to large businesses that have internal IT expertise. Smaller businesses may be better off going with a cost-effective software-as-a-service provider.
For more information on virtualization, visit: http://www.vmware.com/virtualization/.
Jessica La Plante-Wikgren is a freelance writer based out of Green Bay. She previously worked as a feature writer and staff reporter for The Door County Advocate and the Green Bay News-Chronicle. La Plante-Wikgren can be reached by email at email@example.com.