Businesses Cashing In On The Cloud

Move your business to the cloud, and you'll save time and money, improve flexibility. Stay away, and you're missing out.

Well, maybe. If it fits your business. If you can figure out how to get there efficiently, without major hitches, while keeping your business going and … gulp … not losing your data.

Most CEOs aren't tech experts. And even old-school IT teams may not know how to engineer the transition, or weigh the range of benefits and, yes, the downsides that exist in the nebulous, jargony and rapidly evolving world that is "cloud computing," one of the gassiest buzzwords on or off Planet Earth. At its core, cloud computing is accessing computer systems and infrastructure via the Internet, rather than connecting directly via a physical server or hard drive.

Getting a company transitioned from its legacy systems and onto the cloud is more than a snap of the fingers.
"Like all things, it's never that easy; there's gray area and complexity," says Raj Kanaya, chief marketing officer at Santa Clara, Calif.-based Aeris, a mobile technology company that is, itself, both a provider and a user of cloud services (full disclosure: Aeris CEO Marc Jones is an investor in OZY). "There's so much noise out there, you need somebody to help you think through that, where you trust their advice."

Enter the middlemen. Or the sherpas for the cloud.

They're the enterprising folks selling tools and services to make companies' leap to the cloud a little simpler. It's big business, given the scale of the transition now taking place; market researchers estimate spending on cloud services could reach as much as $180 billion by 2015. Adoption by medium and large companies is just now picking up steam.

As Forbes columnist Joe McKendrick wrote in January, "Cloud computing represents one of those once-in-a-generation shifts that not only changes the way we think about managing information, but also the way we design and run businesses."

That's got plenty of established players, whether they be IT providers or big consulting firms, ramping up services to help with the cloud transition. New entrants are also jumping in. Take SkyKick, a Seattle-based startup that has figured how to automate the process of migrating a company from traditional Microsoft Office to Microsoft 365, the software giant's cloud-based business tools. Or companies like Silicon Valley's Bitglass and Boston's Cloud Health Technologies, which offer applications to help monitor and secure cloud-based business IT.

8K Miles, based in San Ramon, Calif., helps companies figure out how to set up and use Amazon Web Services' cloud-based computer infrastructure (as opposed to owning their own servers), as well as a range of other cloud-related offerings and consulting.

And then there are service providers — not middlemen — that provide direct access to the cloud like Dropbox, which allows users to store files virtually, via the Internet, as opposed to on a local computer. Dropbox, like Google Drive, is a type of cloud provider known as "Software-as-a-Service" or SaaS. There is also "Platform-as-a-Service" or PaaS (Microsoft and Google both offer this) and "Infrastructure-as-a-Service," or, yep, you guessed it, IaaS, which includes Amazon Web Services.

Who could figure this out all by themselves?

Amazon pioneered the cloud concept, carving up the computing power of its servers and enabling other companies to rent that power, bypassing all the startup costs or time involved setting up individual servers.

That's helped fuel the startup boom now cresting in Silicon Valley because it's become cheaper and easier for a small shop to obtain its own email system, store files, crunch data and, most importantly, host their websites.

For IT developers, it's a field day. They can skip right to the cloud and acquire computing power in a matter of hours without setting it up in-house. Barriers to entry have tumbled. Of course, that's also led to ad hoc decisions and less careful cost-benefit analysis, say operations and IT managers. And it leaves companies grappling with how to formalize and streamline cloud-based processes once they've built up.

Many questions persist.

How much computing power does my company need? How much server space? Do we want to pay for it one-off? Or rent for a time? How do we write the software to connect to and maximize this power? And how do we make sure this computing power is reliable, secure and backed up to avoid any untimely crashes?

There's money in answering these questions, certainly at least until the transition's complete. Sri Vasireddy, founder and president of Virginia-based Rean Cloud Solutions, says he doesn't expect the gravy train to just dry up.

"There's a lot of engineering work that needs to be done to optimize the use for it," explains Vasireddy, whose company helps private and public-sector clients use Amazon Web Services to create their own email, web hosting or data analysis programs.

The cloud, he says, takes the sort of computing power needed to convert information into knowledge, which only a few big corporations used to have access to, "and puts it back in the hands of the common man."

"What people do with it is left to anyone's imagination."