Cloud services refers to the provisioning of computing and software applications, or services, by a third-party provider who delivers access to those resources over the internet. There are two fundamental types of cloud services: asynchronous, often called cloud computing, and synchronous, often called cloud communication. Of these services, cloud computing is technically easier, and therefore has been more reliable and widespread. We now have a new alphabet soup of acronyms that attempt to describe these cloud services: SaaS (software as a service), IaaS (infrastructure as a service), and UCaaS (Unified communications as a service) to name a few with more coming all the time.
Popular cloud computing applications include email servers like MS Exchange, file storage and backup services, such as Dropbox, Google Drive, and MozyPro, Microsoft’s Office 365, accounting applications, project management, CRM, and too many others to name.
Cloud communications applications are often known as “hosted VoIP” or hosted voice and can vary widely in quality. Skype and Vonage are examples of peer-to-peer cloud communications services that are known for being both low cost and inconsistent n quality. Some cloud communications providers, like Ring Central and 8×8, small business providers, have users “bring your own internet”, and so the quality of the synchronous connection depends on the bandwidth provided at the user’s facilities and over the public internet. Other providers host their systems over private internet connections which prioritize voice packets through QoS, or quality of service data packet detection and analysis. These latter services are typically more expensive but provide a business-class level of service.
Cloud services are distinguished from renting space in a data center, sometimes called co-location, where the organization may buy or rent servers and software licenses and the client provides the management of the licensing and access, but the data center provides the integrity of the physical location.
Benefits of Cloud Services
Cloud services, especially cloud computing, bring a host of benefits to the SMB (Small and Medium Business). Probably the most popular benefit is that the SMB can get very sophisticated resources with very little investment in IT staff. Another benefit is that these resources can be acquired and used on an OPEX (Operating Expense) basis, rather than a CAPEX (Capital Expenditure) basis. This can (but not always) conserves cash for the organization, which doesn’t have to invest in hardware and software licenses upfront.
Scalability is another significant benefit: the organization can scale up (or scale down) its use of resources on an as-needed basis. Closely related to this benefit is the speed of deployment, as these resources can typically be deployed almost on a minute-by-minute basis. And because cloud resources can be scaled up and down, it gives the SMB a great deal of flexibility.
Another important benefit is that having resources and applications in the cloud provides remote access, not dependent on having a file or application on a particular piece of local hardware. This is beneficial for collaboration as well, and provides a level of .
Finally, a benefit of cloud services, especially computing, is reliability. The resources are almost always going to be available, but it is important to note that not all applications and resources are always going to be available, and there will be occasional outages.
Challenges of Cloud Services
Although there are many compelling benefits to cloud services, especially cloud computing, there are also significant challenges. These include questions about security and privacy, because a company’s information is traveling in the public internet, and residing on remote hardware, owned by the provider, that is shared among many clients. Because the client has no visibility or control, this can be a concern for some SMBs. Also, if the cloud service goes down, the client will have no access to their own information.
Another serious concern is the ability to migrate the software and information in the event that the client becomes dissatisfied with the service. In many cases, this can be very challenging, if not impossible.
Since cloud services are not accessible without access to the internet, a wide deployment of cloud services will necessarily cause an increase in demand for bandwidth. How much depends on the application, and in general, cloud computing applications require far less bandwidth than cloud communications.
Another challenge, especially with cloud communications, is quality. The internet in general is not optimized for simultaneous conversations, so getting cloud communications to work well can be either expensive or frustrating or both.
Finally, cloud services when evaluated on a life-cycle basis, can be far more costly to an organization on a net present value basis. This is especially true for cloud communications, where contract term lengths are often 1-3 years and go on forever.