8 Things Every Business Owner Should Know About the Public Cloud

By Matthew Davis|14 August 2014

“Cloud based software allows me to offer a level of service to my clients that I would not be able to otherwise provide on my own,” says Sam Imandoust, owner of a small Certified Public Accountant, tax law and professional services firm.    If you’ve been living under a rock for the last few years, you may have missed the impact cloud computing is currently having on the modern business landscape.

“The Cloud” is now an often repeated term in business vernacular. Cloud based platforms are becoming an ever more prevalent tool, wisely put to use by businesses of all sizes and models.  Yet even as cloud based platforms and related products continue to saturate the market, much is still misunderstood about what specifically qualifies as a, “cloud based,” service and what potential benefits cloud based platforms offer to users.  What follows is a basic dissection of the types of cloud services currently available and how they can be leveraged to benefit your business.

1) What Are the Three General Categories of Cloud Based Services?

The term, “cloud based service,” can be used to describe an entire range of services with various functionalities.  In order to properly diagnose how and when cloud based platforms might benefit your business, it’s important to understand what cloud computing is.  Generally speaking, cloud based services fall under three categories.  These categories are commonly referred to as Software as a Service (SaaS), Platform as a Service (PaaS), or Infrastructure as a Service (IaaS).  There are a broad range of products with specific functionalities within these three categories, but for comprehension purposes it’s best to start with high level concepts and then get more granular.

At its most basic definition, cloud computing simply refers to the ability of end users to leverage large shared resources that can be accessed with ease and efficiency.  In a nutshell, a cloud based platform allows for end users to utilise parts of bulk resources, (such as a shared server maintained by the platform provider), quickly and seamlessly, with a relatively minimal investment of labour.

Cloud platforms usually offer a few common capabilities.  Among these is the ability for end users to sign up and receive services without employing a traditional IT service or setting up their own secure server, the ability to access resources that are pooled/shared amongst all end users, and the ability to access these resources via a standard end-user portal, (such as a laptop or mobile phone).  Cost for use of these services is much the same as a cable or phone bill, with use being metered and charged based on an agreed usage rate.

2) What is Software as a Service?

As a small business owner, Sam Imandoust Esq., (who is also a barrister), will emphatically speak to anyone who cares to listen about how cloud based software saved his business.  “Going with [Cloud Software] was absolutely one of the decisions that allowed me to survive the rough economic times we’ve seen recently.”  According to Mr. Imandoust, the combination of speed, efficiency, security and cost reduction were essential in allowing him to compete with larger competitors that have access to more resources and can leverage traditional infrastructure.

“Cloud computing allowed me to skip the painful and tedious tasks of purchasing, developing and maintaining my own large infrastructure which would otherwise be necessary to support the services I offer to my clients.  Without cloud computing I would be forced to hire an outside IT specialist and additional support staff, then oversee every detail of maintaining and ensuring it continues to function optimally.  I simply would not have the time and resources to commit without sacrificing the level of quality I provide to my clients.”

Software as a service can be defined in the simplest of terms as software deployed over the internet.  A SaaS provider licenses a web based solution to customers as an on-demand service through a paid subscription.  Payment models vary from, “pay as you go,” to ad space agreements or revenue sharing from leads or business the solution might provide the end user.  Some of the common characteristics that traditionally define a particular cloud based program as a SaaS application include allowing web access to commercial software, managed from a central, (presumably off site), location that frees the end user from handling any of the traditional housekeeping chores usually associated with software like installing software upgrades/patches and securing the information via an in house encryption or fire wall.

3) When Should I Use SaaS and When Should I Avoid it?

Cloud computing in general is growing rapidly, and SaaS based platforms especially so.  The reasons for this are numerous, but there are specific business models and unique challenges where SaaS is a better solution than others.  In this section, let’s examine what sort of challenges are best met by a software based cloud solution.

Mr. Imandoust uses several SaaS cloud platforms to provide the best service he can to his clients.  As a tax barrister, he uses a cloud based storage system to securely send, receive and store sensitive legal and tax documents.  The data encryption the server protects his information with is provided completely by the cloud based platform.  This allows him to cheaply, quickly and securely exchange information with clients, court representatives, creditors, or anyone else he might need to send paperwork to via a secure portal.

In addition to file storage, Mr. Imandoust also uses an additional SaaS to provide accounting and tax services over a secure cloud.  This program allows him to quickly do the grunt work of tax filings and calculations, along with any other accounting related services; without having to establish in-house infrastructure to store and secure the sensitive information he handles.

This is a great example of how a small Certified Public Accountant or legal firm might make use of SaaS, but is it right for your business model?  When considering whether or not to employ a SaaS cloud program, there are several common instances where SaaS makes the most sense.

i) The most obvious and most commonly used SaaS would be any cloud based email platform.  There are numerous platforms to choose from, but one might look to Gmail or Microsoft Outlook/Exchange as two common and well known examples.  In 2014, email platforms such as these are really more of a basic need in order to do business rather than an avenue to pursue any sort of competitive advantage.

ii) Anytime your business model requires significant online interaction between your organization and the outside world.  Our discussion about Mr. Imandoust’s use of a secure cloud based file sharing program to send and receive sensitive documents to and from his clients is a perfect example of this type of solution.

iii) If your business requires mobile access to a database that can be shared quickly and easily amongst all employees.  A CRM, (Customer Relationship Management), program used to build and track your organization’s sales and marketing pipelines are typical examples of this type of need.

iv) Project collaboration – If you’re building out a specific short term project where the contributions of many are required.

It’s clear that software as a service can offer a wide range of benefits to nearly any business regardless of size or model, but it is also important to recognise its limitations.  Just like a hammer or a saw, cloud based software is a tool.  Tools are better suited to some purposes than others.   For certain tasks, cloud based software is less than ideal.

If for example, you require a program to process large quantities of data extremely fast in real time, you’re likely better off with a traditional software platform and a local server to send and receive data.  Another caveat would be anytime you do not want data hosted or stored externally.  Perhaps the nature of the data is extremely sensitive and because of this it is determined that it would be preferable to set up traditional infrastructure with very stringent security protocols to limit risk of exposure.  A smaller server with fewer users usually means a smaller incentive for would-be hackers to attack your system.  Huge cloud storage servers such as those provided by an international conglomerate are understandably a more visible target for those who would seek to gain access to a company’s sensitive data.

Depending upon your industry, your company also may not want to host data externally because there might possibly be some industry specific legislative regulation against it.  This quite obviously depends on what type of data you’re storing and what nation(s) your company does business in.

Lastly, a savvy manager understands that a simple solution is usually the best one.  So, if your on-site solutions and programmes are already optimal to complete the tasks and functions you require, don’t complicate things by incorporating additional programs that are unnecessary.

Now that we’ve seen how software as a cloud based service can improve efficiency and productivity while simultaneously lowering cost; let’s explore another general category of cloud based services.

4) What is Platform as a Service?

Software as a service is usually what casual technology users associate with the term, “cloud based services,” but in fact that’s merely the tip of the cumulus.

While the line between Paas and IaaS continues to become ever more blurry, it is still important to understand the subtle distinctions as one wades into the cloud for solutions.  At a most basic level, one might view PaaS as a sort of blending between software as a service and infrastructure as a service.

PaaS put simply, is a series of cloud based tools used to create/put into use customised applications quickly and efficiently, with very little of the traditional infrastructure which would normally be required to support it.  It’s a set of tools and programmes designed to make the task of coding, developing and disseminating new or custom applications quick and efficient.

To put it even more simply, PaaS functions as a cloud based application in essentially the same ways as a Saas, the only difference being that Saas is software as a service delivered over the web, and PaaS is a platform for the creation of software delivered over the web, (like buying a car vs. buying an assembly line to build your own car).

Jeff Fenster, the Owner of JFEN Holdings, swears by PaaS cloud functionality.  He uses everything from content creation, to native advertising and instructional videos to help bring awareness to the products and services.  According to Mr. Fenster, the reach, customization and efficiency PaaS programs provide his business is an absolutely essential component to his success.

“[PaaS] allows me to organise and functionalise all the unique data I collect, or my clients collect to help me gauge how effective a particular marketing campaign might be.  I can take the data I’ve collected and stored on a cloud based server, then build out an app in close collaboration with my clients, without any knowledge of coding or programming, (here he adds a “thankfully,” with a look of relief), that allows me to disseminate and make sense of the data collected, then share that data with my clients securely in a way that is easy to digest.  This functionality also allows for seamless interaction between myself, my clients and their target demographics.  Additionally, [my PaaS] gives me access to thousands of custom apps already created and shared by fellow users/independent software vendors that I can buy or exchange via a secure cloud based marketplace.”

The high functionality of cloud based PaaS is a truly valuable tool for those who would seek to turn ideas or unsorted data towards useful application.  Many PaaS programs allow the user to create and share ideas/collaborate on campaigns or create social media platforms so that employees and clients can stay in touch and collaborate instantly no matter where they are anywhere across the globe.

PaaS platforms can build apps to handle a specific task or individual function, all with a few clicks; without the need for IT resources or infrastructure.  One can automate key business processes, design page layouts for websites, create reports, all in minutes and deploy them instantly across any device within a given network.

While there are a multitude of different providers of this type of platform, they all center on some common characteristics and functionalities.  Generally speaking, PaaS platforms are web based creation tools that help users create, test, edit and disseminate different user programs and applications.  These applications usually offer some level of infrastructure support so that applications that are deployed are easily scalable and make efficient use of available resources.  A good PaaS will also include a system to make collaboration around development and delivery seamless and simple.  Think of a good communication tool like a closed social network, only available to those with a hand in development of a particular project or application.  Finally, PaaS programs will usually also offer a system or apparatus to allow your business to handle billing or subscription issues related to an apps dissemination and use.

Further Information

Cloud Usage and Risk Analysis

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