Cloud technology and how it can help you make an ERP decision for your organization

Everyone seems to have a different definition of the cloud. So what is the cloud and what does “cloud technology” mean?

"The cloud" is a familiar cliché for the Internet, but when combined with "technology," the meaning gets bigger. Some people define cloud technology as an updated version of utility computing or virtual servers available over the Internet. Others argue that anything outside the firewall is "in the cloud," including conventional outsourcing.

Cloud technology is a way for the IT function in an organization to increase capacity or add capabilities without investing in new infrastructure, training new personnel, or licensing new software. Cloud technology encompasses any subscription-based or pay-per-use service that extends existing capabilities in real-time over the Internet.

I used to draw "the cloud" to symbolize data moving over an X25 link from remote offices across USA and Canada to a 24 port MUX connected to a DEC PDP11-70 at Head Office. The smallest offices sent engineering time as a data packet via a 2400 baud modem and I wrote code to import the data. And if you don’t understand a word of what I just said it is because this all happened twenty three years ago.

ERP Cloud? SAAS? They are nothing new. The software at our Head Office twenty three years ago was the forerunner of ERP - a somewhat integrated project tracking and accounting system. As the "service provider" to a large network of offices and affiliates we were effectively providing a form of SaaS before the Internet was available to the world. The output was pretty darned good for the time but people complained about "the system" much as they complain about today's ERP and for the same reasons - vendor issues, sloppy data entry, poor communication, cost overruns etc.

Cloud ERP Advantage

A big advantage of today’s cloud technology is that it can enable an organization to test drive ERP software through applications such as Open ERP or Openbravo. I strongly recommend trying out ERP via this method. A company that has never had an ERP system before will get the feel of how complex the data matrix set up can be in an integrated system before investing in any particular software solution.

Flexible ERP systems have so many user defined attributes and variables and these can be hard to define unless you are able to visualize the resulting output. What “types”? What “classes”? What “activities?” What is the best way to set up the organizational hierarchy?

Hosted cloud technology companies offer a one month free trial or even free software, so you have the ability to plug in the parameters, enter some data and see how it all comes out.

Cloud technology could be the ultimate answer for small business ERP - an ERP software solution with no hardware or software investment and the flexibility to choose an open source system to suit the business type.

More definitions for cloud computing technology

Here is a compilation from several sources of the most commonly used terms for applications in the cloud.

SaaS: This type of cloud technology delivers a single application through the browser to thousands of customers using a multitenant architecture. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting.

Utility computing: The idea is not new, but this form of cloud computing is getting new life from, Sun, IBM, and others who now offer storage and virtual servers that IT can access on demand. Early enterprise adopters mainly use utility computing for supplemental, non-mission-critical needs, but one day, they may replace parts of the datacenter. Other providers offer solutions that help IT create virtual datacenters from commodity servers, such as 3Tera's AppLogic and Cohesive Flexible Technologies' Elastic Server on Demand. Liquid Computing's LiquidQ offers similar capabilities, enabling IT to stitch together memory, I/O, storage, and computational capacity as a virtualized resource pool available over the network.

Web services in the cloud: Closely related to SaaS, Web service providers offer APIs that enable developers to exploit functionality over the Internet, rather than delivering full-blown applications. They range from providers offering discrete business services -- such as Strike Iron and Xignite -- to the full range of APIs offered by Google Maps, ADP payroll processing, the U.S. Postal Service, Bloomberg, and even conventional credit card processing services.

MSP (managed service providers): One of the oldest forms of cloud technology, a managed service is basically an application exposed to IT rather than to end-users, such as a virus scanning service for e-mail or an application monitoring service (which Mercury, among others, provides). Managed security services delivered by SecureWorks, IBM, and Verizon fall into this category, as do such cloud-based anti-spam services as Postini, acquired by Google. Other offerings include desktop management services, such as those offered by CenterBeam or Everdream.

Service commerce platforms: A hybrid of SaaS and MSP, this cloud computing service offers a user-interactive service hub. They are most common in trading environments, such as expense management systems that allow users to order travel or secretarial services from a common platform that then coordinates the service delivery and pricing within the specifications set by the user. Think of it as an automated service bureau. Well-known examples include Rearden Commerce and Ariba.

Hybrid cloud scenarios

It’s not all or nothing - on-site or offsite in an external cloud - it’s the ability to amalgamate across multiple pools of resources, matching application workloads to their most appropriate infrastructure environments.

Hybrid cloud technology includes several functions:

Using multiple clouds for different applications to match business needs. For example, Amazon or Rackspace could be used for applications that need large horizontal scale, and Savvis, Terremark or BlueLock for applications that need stronger SLAs and higher security. An internal cloud is another option for applications that need to live behind the corporate firewall.

Allocating different elements of an application to different environments, whether internal or external. For example, the compute tiers of an application could run in a cloud while accessing data stored internally as a security precaution (“application stretching”).

Moving an application to meet requirements at different stages in its lifecycle, whether between public clouds or back to the data center. For example, Amazon or Terremark's vCloud Express could be used for development, and when the application is ready for production it could move to Terremark's Enterprise Cloud or similar clouds.

This is also important as applications move towards the end of their lifecycle, where they can be moved to lower-cost cloud infrastructure as their importance and duty-cycle patterns diminish.

Cloud technology service providers

Besides price, there are a number of variables to consider when deciding on a cloud technology services provider. For some companies – especially firms that deal with sensitive data – the physical location of the cloud servers on which data is to be stored is very important.

Security-conscious customers may want to check the certification of their potential cloud provider’s infrastructure. Some organizations, such as the Cloud Security Alliance, offer security certification, and a host of cloud companies have recently applied for and received such certification.

Along with security, cloud companies have also moved to improve the reliability of their services. Many major providers now offer so-called uptime guarantees. Essentially, the companies assure their customers that the cloud service will remain running at least a certain percentage of the time. For large providers, that number hovers around at least 99 per cent uptime.

There are a number of major cloud providers that offer comprehensive solutions for small and medium-sized businesses – essentially, services for companies that want to migrate fully to the cloud, rather than purchase one or two cloud-based services.

Google, for example, offers its popular Docs, Calendar and other services to businesses as a cheaper solution than buying software from a retailer. The company has largely tried to leverage its size and scope to sell customers on its cloud services – providing each employee 25 gigabytes of Gmail space, for example.

Amazon, the giant Web store, has also moved into the cloud business. The company has leveraged its huge server capacity to offer businesses a traditional cloud computing solution. In effect, the company rents out server space on a pay-as-you-go basis.

Customers can rent out computing power, space or bandwidth, and can easily scale the amount they need as they go along. Unlike its competitors, however, Amazon offers few bells and whistles. There are no Amazon-branded business software tools such as Google Docs. Instead, the company focuses on renting out server space and computing power with no frills. The result has proven successful, as many small business owners – especially tech startups that can’t afford to buy servers – have migrated to Amazon’s service.

A number of traditional software and hardware firms have also recently stepped into the cloud services market. Microsoft launched Windows Azure, a cloud-based network of software and hardware that allows the company to offer a number of services, including storage space and virtual networks. IBM, Cisco and a host of other tech firms have also expanded their cloud offerings.

While companies such as Amazon have leveraged their massive hardware infrastructure to sell businesses on the cloud, other firms have focused on software. Perhaps the best-known example is, which specializes in sales software. The company’s applications, which are hosted on the cloud, are designed to help businesses manage their relationships with their customers. In recent years, the company has expanded its offerings to mobile devices, and introduced new apps, such as real-time collaboration tools.

For almost every major corporate task, it seems, there’s a cloud company offering to let businesses do it without buying new hardware or software.

Barbara Craven

Box 433, Enderby BC V0E 1V0 Canada 1-250-838-6358

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