The future of computing is in the cloud

November 9, 2009

pierslinney-Piers Linney is a self made entrepreneur and former City investment banker. He is currently Joint-Chief Executive Officer at Outsourcery, a leading communications and hosted IT company. The opinions expressed are his own.-

“Cloud computing” can sound like a very amorphous concept, perhaps even conjuring up images of important business data floating around in the skies above us. It often raises questions about control and security. But the reality is a lot more down to earth and it is quite simply the future of computing and the way in which businesses will consume pooled resources of software and hardware.

It is not a technology that is on the way or in “beta testing”. Cloud computing uses tried and tested software that is just delivered in a new way. It is already empowering thousands of small and medium-sized enterprises (SMEs) in the UK while saving them money, increasing productivity and allowing them to get on with running their business instead of their IT.

The arrival of cloud computing – where software and hardware is pooled centrally and made available over the internet – has parallels with the early use of electrical power. When industry first started using electricity, each business had to build a generating plant.

This model was replaced with large centralised power stations with electricity distributed using the National Grid network – providing customers with “on-demand” power without any investment or maintenance costs and billing based on only what was used.

My business Outsourcery is a leading provider of communications and cloud computing solutions to 25,000 SMEs in the UK. We have two purpose built data centres, complete with security, 24/7 monitoring, expert staff, redundancy and real time back-up of systems and data across two sites that even most corporations could not afford. If one of our data centres was catastrophically destroyed, our customers would probably not even notice.

I have been involved in many start-ups and SMEs where looking after technology was a constant burden – involving the purchase of expensive servers and software and maintenance support.

The same expensive start-up costs were always needed – whether the office had a team of five or 25 people. Data back up solutions, PABX phone systems and the installation of ISDN lines were all part of the expensive communications and IT mix.

All of these systems were separate, with no integration. It usually was not long before we had to hire an IT Manager to look after the “stuff in the cupboard”.

Things have changed. Now, businesses of any size can benefit from state-of-the art IT without enduring any infrastructure or maintenance costs. These businesses pay for the service on a per person, per monthly basis.

This is all done without the business needing its own server, telephone system or maintenance contract. Whether the business is a two-man band or a company with 200 employees in different offices, the technology can be rapidly deployed.

When documents, e-mails, contacts and other business critical data are switched from an “on-premise” server inside your office to the cloud it makes them accessible from any PC, laptop or mobile device anywhere in the world.

Mobile and virtual businesses are now a reality. Switching business critical functions to an external “cloud computing” solution is not really about outsourcing. It is more about reducing costs and focussing the resources of a business on what it does best – serving its customers.

Whether we are providing a hosted IT solution to a freight distribution company, a cake shop or a charity – the overarching aim remains the same: we handle the communications and IT while our customer gets on with the business of running their business.

We do this by providing a holistic solution which links an employee’s work PC, laptop, landline telephone and mobile together. This is what we call “unified communications” – the seamless blend of real time communication (mobile, voice, video and instant messaging) with non-real time communications (e-mail and voicemail).

This is then seamlessly integrated with mobile devices, document collaboration and customer relationship management (CRM) solutions.

While the case for this type of cloud computing solution is compelling, IT managers of large and small companies still have fears about the risks involved in switching business critical IT functions to an external supplier.

For example, a YouGov survey, commissioned by IT assurance specialist NCC Group, found that 20 percent of IT managers working in large businesses believe that their outsourced systems and processes have less IT security than those based in-house. These fears have doubtless been fuelled by high-profile cases of outages where data has been lost and the common confusion with the low security available for users of consumer focused sites such as Facebook or Twitter.

Thousands of people with Sidekick smart-phones, for example, lost their address books, calendars, photo albums and other personal data which was stored in the cloud. But the reality is that outages where sensitive personal or business data is lost are extremely rare in the business sector. However, choose your hosted IT and communications supplier carefully as they are not all the same. Companies such as Outsourcery are attuned to the growth of cloud computing and the major commitment made to it by global-leading technology companies such as Microsoft and Google.

During my time in business I have experienced a failed IT back-up system – which was a result of it not being set up properly – and days without e-mail as the internet connection cable for our e-mail server had been knocked out by a cleaner and we were all abroad. The fact is that it is far more risky to house a server in your office where an accident or mishap can result in a server being damaged and business critical data being lost forever.

All businesses need to embrace cloud computing as it will make them more efficient and more productive while enriching their working relationships. Businesses already using cloud computing quickly ask themselves how their competitors can cope without enjoying the many benefits that this new technology brings.

I am sure that the last company to ditch its own electricity generating plant for a far cheaper, more efficient and more reliable on-demand supply via the national grid lost out to those that embraced the inevitable process towards the grid earlier on.

Cloud computing is the future of computing.

Cloud dialogues…

Imagine you are sitting in an airport in the U.S. using a wireless network and you urgently need to obtain access to a proposal on your secure intranet that you want to send to an important customer who needs it for a key internal meeting, but it needs to be updated.

You can see in a glance next to the document that one of your colleagues involved in preparing the proposal is available in your London office and online as their “presence” icon, which checks their diary and status, is green. Another is in a meeting and their status is red. You instant message your available colleague to ask whether they can help you to amend the document.

They reply “yes” and initiate a voice call over the internet at no cost. You put on your bluetooth headset, open the document and then start a web conference allowing you to have a face to face conversation.

At the same time you can share the document and collaborate to amend the document in real time. You bring in another colleague by dragging and dropping them in to the call window, but just converse by instant message to ask a few simple questions.

As soon as you’ve finished, you drop out of the conference, but your two colleagues continue using instant messaging as they’ve had an idea to improve the document. They actually then go on to escalate to a voice call from their desk phones by one click to continue the conversation. You save the document back to your intranet, which is automatically subject to version control.

You then look at your customer record launched from a CRM solution integrated with Outlook, which lists all of your company’s communications with the customer to ensure that somebody hasn’t already sent a similar document and pricing to a different decision maker. You then send the document by email to your customer and it is logged in the CRM system automatically and an automated notification is sent to your commercial team – with a link to the document on your intranet – so that they know that a proposal has been issued.

You try to call your customer in London and the call is routed over the internet to the UK where a UK call over the fixed line network is made so that you would only pay for a local call, but there is no answer so you leave a voicemail. You then close your laptop and head to your gate.

As you board the plane your colleague instant messages you on your smart phone to ask whether you got it out in time. As you read the instant message, your customer confirms receipt by email and thanks you for a speedy response and your follow up voicemail.

They also called your office number to thank you, as they don’t know where you are, and left a voicemail, which is sent automatically as a sound file to your smart phone. You should have actually diverted all calls to your mobile though using the toolbar in Outlook that controls how people can, or can’t, reach you.

You respond to your colleague by instant message typing “they have it. thanks”. You then forward your colleague the customer’s grateful voicemail as an email attachment from your smart phone – just before you switch off for your flight.

In my business, this is how we work every day. It astounds most people that see these powerful yet cost effective and scalable solutions in action.


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It has even more parallels with the world of commercial time-sharing, which Mr Liiney looks as if he is too young to remember.Commercial time-sharing was unpopular because it was expensive. I can’t speak for Mr Linney’s offerings, but the cloud computing that most people experience is pretty expensive, cross-subsidised by other activities such as advertising. Subsidy is always popular at first, but rarely stays the distance.Commercial time-sharing was unpopular because of fears about control and security. I once worked for a company which found that all its intellectual property had disappeared overnight in a dispute with its service provider. Cloud computing offers no guarantees against that happening again. And just in the past month, there have been two or three frankly astonishing data outages which should never have happened in any sized business.Commercial and in-house time-sharing was unpopular because it was resource limited and undemocratic. DP departments thought they had the right to tell people what the CPU cycles got spent on. That’s why DP departments don’t exist any more. As the one-off benefits of virtualisation software products get spent, cloud computing will also inevitably become resource limited. DP departments are likely to reappear, at least in some form. DP departments are unlikely to be popular.

Posted by Ian Kemmish | Report as abusive

So-called cloud computing is a fad to sell IPOs. There is no sucurity whatsoever to the data which is held off site. Reliability is a moot point because if the server in your basement can fail, so can the cloud server.How about having a legitimately unbiased story on ‘cloud computing’ from someone who doesn’t have a vested interest in making it popular.

Posted by Ednonymous | Report as abusive

Cloud Computing is not only about getting businesses to the cloud as Salesforce CRM gets clients from Oracle or SAP while companies can reduce IT costs!Cloud Computing is also what Amazon or Yahoo are doing!Yahoo has an audience of 600 million monthly users worldwide giving them a second home in the Cloud!I am sure that a Cloud Computing Company has to get businesses which pay for the Service (SaaS) ot it has to have the big audience to make profit!

Posted by Michael | Report as abusive

Since I am new to the “social networking” scene, I see a lot of the X generation, not buying into the Y generation mindset. Totally agree that SME’s need to survive in this day and age, larger companies can afford, by default a large IT budget, but “bureaucracy” is not the way forward, use the resources that you have, and follow the lead of the next generation of “how to do business” in the age of the World Wide Web. Creativity and innovation are good things in any business environment. Join LinkedIn and you will find a good mix of X and Y generation going on. As a coach and mentor I am always available for advice, helping people with the same problems is a good thing, were not reinventing the wheel, we just use different tools in the Age of Technology.

Posted by Paul Koyich | Report as abusive

… if you belive cloud computing is the future for businesses, you must be ‘really high.’

Posted by mike | Report as abusive

A necessary condition for cloud computing to fully succeed is Trusted Computing. Once a TC paradigm is completely insinuated into the computing ecosystem, users will be able to source out the most efficient solution to their computing need. Without TC, users will continue to be held hostage to a very few service providers and their limited computing models. TC is rapidly developing and is dependant upon acceptance of the TPM chips contained in over 300 million enterprise pc’s. Just as banks today provide credit to individuals they trust, the service providers of the cloud will one day provide computing services to all users they trust.

Posted by Rainer | Report as abusive

To you x and y generation person. Cloud computing is here and will only become bigger and more robust. “you can’t stop progress.” Now we have to figure out how to make the public cloud more virtual private cloud friendly.

Posted by mike clark | Report as abusive

Cloud computing is really about outsourcing white collar work, mostly to India. The US now has 8400+ banks plus branches, plus thousands of non-bank banks. It is how a third of our GDP is financial sector.

Posted by Ken | Report as abusive

The analogy to electric power is the most overused and irrelevant example used to show the power of cloud computing and reference it against something thats known in the industry as an answer to today’s problems.Electricity is a one-way flow. Utilities generated it, grid delivered it and companies utilized it. Computing is a bi-directional flow. Unique intellectual property and operational business information is generated and then put back in the cloud. There is NO similarity to electricity. When did a piece of capital equipment generate its output and send it back to the power provider for storage?The technical community is short of true innovations and hyping this as a breakthrough.

Posted by Baber Khan | Report as abusive

Cloud computing is also subject to abuse of privacy by governments and corrupt government employees. Both Google and Yahoo have caved in to Chinese government demands for information leading to arrest of journalists. The Democrat-controlled federal government, desperate for money, will also snoop in the Cloud for evidence of tax evasion.

Posted by Greg | Report as abusive

I have a degree and over twenty years under my belt in IT. I don’t care what he says, cloud computing won’t work. And outsourcing is not the answer. Someone above mentioned fad… ugh, yes.

Posted by rjs | Report as abusive

For most businesses it will end up being a combination of private cloud and public cloud, a blend of complimentary services from each.However businesses need to figure this out and take care, as we all know when two clouds collide you get thunder and storms…..

Posted by trevor attridge | Report as abusive

So we come full circle. ‘Cloud’ computing is just the resurrection of ‘Heavy Iron’ except the ‘Iron’ are now stacks of ‘Pizza Boxes’ running virtualization software. “Cloud, smoud”.I can however see companies colocating IT facilities for small and large businesses alike heavilly leveraging virtualization to create virtual data centers. Several different organizations mails systems could inhabit the same email server while being secure oblivious to one another.The only little fly in the ointment? You know it, come on, it’s on the tip of your tongue!Ma’ Bell. Wide Area Networking. If you can get the speed you need, then it’s gonna cost you the salary of an IT executive every year. If you can get it at all.Until gigabit plus WAN is affordable this cloud, or more specifically co-located virtual datacenters, will just be so much mist in the stratosphere. Is that a dragon I see? Now, it’s a gigantic mouse! No.. wait.. it’s a…

Posted by J | Report as abusive

Why is a commercial for a personal enterprise even considered a fit subject for “the Great Debate”.

Posted by PVR | Report as abusive

thank you for the post.
very informative and useful also.
keep going on.

Posted by Business | Report as abusive

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