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Another influential US business analyst has weighed into the cloud computing and software as a service (SaaS) debate.  McKinsey & Co analyst Will Forest’s presentation goes into considerable detail on definitions and where the technology is making its impact.

The presentation supports what we have been saying for the past few months:  cloud services and SaaS can provide significant benefits to small and medium sized businesses – especially when those businesses don’t already have cash and resources tied up in expensive business software, data centres or storage.  This is because it gives smaller businesses access to these applications and functions without the overhead.

Is the cloud mature enough to help large enterprises save money?  Maybe.  But frankly, businesses of that size have the budget to experiment.  Smaller businesses don’t – so they are likely to simply get on with their business and take advantage of the SaaS model, as Gooroo’s recent survey says.

If you’d like to find out more about what our software can do, we’re exhibiting at the Business Growth show, Ramada Piccadilly, Manchester, Wednesday 22^nd April.  It’s free to enter.

With all the buzz around cloud computing and cloud services, perhaps it’s no surprise that a poll of Chief Information Officers (CIOs) reckon it will be the most over-hyped technology this year, even ahead of Windows 7 or Google apps.

The survey, by leading IT portal Silicon.com, goes on to say that less than one in 10 of the tech chiefs responding listed software-as-a-service or grid and utility computing as one of their technology priorities for this year.

While the survey is right in one way – there certainly has been a lot of speculation and coverage of cloud computing – hype doesn’t mean the technology will not take off.  What’s more, it looks like it’s set to take off at the small business end of the market.

We’ve just completed a survey (we will release the full findings shortly) that shows 54% of UK small businesses will be using cloud software solutions for key functions by the end of 2010.  The economic downturn is driving companies to seek alternatives to traditional business software.

Perhaps the telling aspect of the Silicon survey is technology that CIOs rated as overhyped in previous years.  In 2008, it was the iPhone – a spectacular success – and in 2007 AND 2006, Windows Vista.  OK, Vista is flawed, but can’t be ignored.  So, hyped the technology may be.  But that doesn’t mean it won’t succeed. 

There’s still a lot of discussion about security in the cloud, how secure your data is, and more.  And I’m sure that discussion will continue for months to come.  But it’s important to look at the issue in perspective.  How many of the cloud security nay-sayers are really applying the same standards to their own systems, servers and data centres?

As this article on the US portal ComputerWorld points out, cloud applications are subject to far fewer threats than data sitting within the average company’s building. 

Is there easy physical access to the cloud?  No:  cloud hosting is done in massive data centres with multiple perimeter check points to restrict access.  Are there thousands of services running on the network with little visibility into what they are?  No.  Are there rogue access points?  No – firewalling and network perimeter defences are airtight.  The risk of disgruntled employees?  There is maybe a small risk, but far less than in any ordinary company. 

Not to mention the fact that cloud apps have resilience and multiple failovers, and don’t lose your data in the event of a crash.  Compared with these points, the average company has a long way to go to match cloud security.

When people start making cartoons based around technology, you know that the technology is crossing over into the mainstream.  The cloud secotr is no exception.  Daryl Plummer, an analyst for Gartner Group, the leading analyst body, has started publishing a series of cartoons taking an affectionate, ironic view of cloud computing. 

Called the “G-Men”, it pokes knowing fun at the misconceptions and buzzwords surrounding the area.  Is it a Dilbert for the cloud age?  Judge for yourself:  you can read the strip from the beginning here, and see Daryl’s general blog here.

When one the world’s biggest cloud applications has an outage, it immediately draws comment about whether the cloud model can truly support business.

This was certainly the case yesterday when Google’s Gmail service fell over following some routine software maintenance.  This left many of the service’s 113 million business and personal users without access to their accounts for about 3 hours while engineers fixed the problem, as detailed here.

But when you think about it, the outage also showed how robust cloud applications can be.  Look at those figures again:  a service with over 100 million users fails, then is restored in under three hours.

Yes, it’s inconvenient for users during that time.  But how many times a month or year does conventional business software crash?  For how long?  And at what cost of repair? 

As the article above points out, business Gmail users have uptime guarantees – so are likely to be compensated for the inconvenience.  Which is something that users of conventional users wouldn’t get from a software vendor.

In my view, the outage says more about how resilient cloud apps can be in the event of a problem.

This story in The Guardian’s online technology supplement shows how a Yorkshire-based small business, Allgas, will soon be benefiting from Gooroo Software’s cloud applications.  The company believes it will help it to minimise IT costs and boost efficiency.

John Cummins, sales and marketing consultant
www.bestquarter.com

When Microsoft says something, it’s always worth listening to. Especially when it involves moving to a new model of software delivery that doesn’t involve physical disks or boxes.  Of course, they have a vested interest in cloud computing, but it’s interesting to get their viewpoint simply because of who they are.

In this case, Doug Hauser, Microsoft’s general manager of business strategy, cloud infrastructure services, said that a weakened economy will help to push businesses from on-premise computing to accessing cloud services

He added that the small-to-medium business sector was “looking at [cloud computing] adoption anyway, regardless of the economic climate.”

What’s clear is that Microsoft’s commitment to cloud computing is strong, and based on solid economics where Microsoft makes money while the consumer saves cash. It’s a sure sign of where software and solutions are heading — and how the most influential software companies are putting their weight behind the model.

John Cummins, sales and marketing consultant
www.bestquarter.com

Here, we’ll be linking to and discussing interesting developments in cloud computing, cloud services, software as a service and more.

We welcome your comments and input — so please contribute!

John Cummins, sales and marketing consultant
www.bestquarter.com