Up In The Air

Change is inevitable. Companies constantly improve upon their products, touting them as the best thing since sliced bread. Technology is one area where change happens frequently and ferociously. Ten years ago, cell phones made calls and little else. Today, many are more akin to miniature computers. To help users stay connected among all of their devices, one of the growing sectors of technology is cloud computing, which enables users to access programs and information through virtual servers available through the Internet.

Many people use the cloud without even realizing it. It has been around for years, mostly through email clients, such as Gmail, Hotmail and Yahoo! Mail, and through social media, like Facebook and Twitter. Now cloud computing is making its way into many offices and residences through programs that enable users to do their accounting, management, planning and design all through the cloud. But as the popularity of cloud systems continues to rise, so do questions about it.

A Service Industry

As with any service, some cloud-computing providers are more reputable than others. Mark Reino, chief executive officer of Boca Raton, Fla.-based Merit Mile Communications, a marketing firm that develops and executes tech-savvy strategies, recommends finding providers through independent review authorities, such as the technology review site CNET. (For additional independent authorities, see the sidebar on page 20.) Many would-be users have security concerns because their data is stored on an external server rather than locally. Reino says going through a trusted provider will ensure data is safe.

Numerous potential cloud users often wonder why they should pay to use cloud-based software when they could purchase comparable software to use directly off of their computer. “It’s the exact same reason you don’t have an electrical power grid in your house,” Reino explains. “It’s a service you rely on. Fundamentally, it comes down to a core business answer. If software development is your core business, then I can see you wanting to purchase, maintain, install and be responsible for version control. But if you are a professional home remodeler, you might want to have all of the conveniences of the cloud automatically delivered to you as they happen in real time.” Reino also notes in a cloud environment the user is immediately downstream of updates; this also means an in-house IT department might not be necessary.

Buying vs. Renting

Jeff Knutson, president of St. Paul, Minn.-based Contractors Software Group and J. Knutson & Associates Inc., a provider of construction software, computer hardware and IT services, has been involved in the software industry for 28 years and emphasizes using a cloud-based system is equivalent to renting software rather than owning it. “Back in the day before PCs, you couldn’t buy a computer system for less than a quarter million dollars,” he says. “People used to rent data storage and applications.” The cloud is similar to renting space.

Whether a company chooses to use the cloud should depend on the application, Knutson says. “The application will dictate if they want to put it in the cloud,” he asserts. “I see most people don’t want their accounting in the cloud because of security, but there are estimating applications in the cloud people do want to use.”

Knutson believes start-ups and smaller operations can benefit from using the cloud. “If they don’t have the infrastructure, the money or they’re growing, [the cloud] is a good interim step,” he says. Knutson does not think, however, using a cloud is a good long-term solution. The cost of renting something month after month eventually will exceed the cost of buying it outright.