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Pay-as-You-Go with Cloud Computing

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Salesforce.com is one of the technology industry’s more recent Cinderella stories. Less than a decade ago, it was just another Silicon Valley startup operating out of the home of its founder, Mark Benioff, with three employees, $6 million of his own seed money and an idea that was the laughing stock of the business section. Some implied he had his head in the clouds and in a way, he did. Benioff, a former Oracle executive, had a vision to develop software, but not sell it. Instead his customer relationship management (CRM) applications would be offered on a subscription basis while empowered and housed on his company’s maze of servers and computers (euphemistically referred to as a “cloud”), not to mention storing and securing the entire body of client data created in its wake. CRM applications, formerly cost prohibitive for small to mid-sized businesses, would now be affordable, scalable and turnkey living on Salesforce.com’s more robust data grid than the more limited networks of its clients. Back in 1999, that idea was considered voodoo. Critics at the time predicted companies would never be willing to offload control of such core business applications. Pioneer in cloud computing In 2008, the now publicly traded company has more than one million subscribers from its 41,000 subscribing companies and works in partnership with some of the biggest names in technology and on Wall Street. As for the power of the company’s data grid or “cloud,” there are now days it accommodates more than 100 million user requests. “Salesforce.com is a really a pioneer in cloud computing. It identified a specific need; that it’s hard for a small to midsize business to manage a CRM system. With Salesforce.com, now those same companies only need a web browser. It’s effective and it addresses a clear pain point,” says Andrew Reichman, a senior analyst from Forrester Research. Software-as-a-Service (SaaS), data centers, Web-based applications and virtualization, along with cloud computing, are some of the most over used and misunderstood buzz words floating around in business technology circles these days. They all have one thing in common: they are often confused in various combinations as the same thing. Though similar, they are not interchangeable terms. “It’s easy to confuse. From the standpoint of the user, there isn’t a difference between cloud computing or SaaS or Web-based applications,” says Frank Scavo, president of Computer Economics, based in Irvine, Calif. Historically, jobs requiring serious computing power have been performed by powerful mainframes, supercomputers, and over the past two decades increasingly by the ever more capable desktop or laptop PC souped up with the latest and most powerful microchips, RAM and sophisticated operating system that can run multiple applications simultaneously. Cloud computing is the alternative to all that high powered computing generating from one place. Cloud computing, instead, takes place within a integrated ballet of algorithms and code among cheaper, low powered computers and servers and third party networks “out there.” What IT types eventually started referring to as “the cloud” and what is increasingly becoming the platform of choice for many companies who no longer want the headache or expense of housing and maintaining all that cumbersome computing. Coming to terms So how is this different from all those other terms mentioned? Here’s a quick primer: Software-as-a-service: This is the business model, an alternative to the generations old business model of marketing software by selling usage rights with an “end user license agreement” (EULA). Web-based application: This tells you where the software lives. Traditionally, software applications have lived on a centralized mainframe or server or on the individual user’s PC. Web-based applications live on the Internet and are accessed with a Web browser through a password protected website. Data centers: A data center is the physical location of a farm of servers and computers. Data clouds are typically much bigger, involving perhaps thousands of computers across data centers around the globe. Clouds are automated. Data Centers involve human management. Virtualization: This is the programming mechanics of optimizing and integrating servers to act in concert as one external interface for the end user. It’s a great way to create redundancies, maximize the equipment’s efficiency and conserve energy. The benefits of cloud computing While Salesforce.com has proven itself a success serving small to mid-sized businesses by delivering CRM from the cloud, the cloud computing trend has hardly hit its tipping point. Here are some of the reasons many industry watchers say it’s only a matter of time: Save money. Through the business model of SaaS, applications living on the cloud are much cheaper for companies. Organizations save on the expense of implementation, maintenance, and security while benefiting from the economy of scale a massive “cloud” can offer compared to even a large company network. Access to more sophisticated applications. Salesforce.com is a great example of this with its offering of CRM tools to smaller businesses, whereas before CRM was completely out of reach for most modest budgets. Downsize the IT department. The more applications that are farmed out to a cloud, the fewer that have to live on the company network. That translates to fewer bodies for deployment, upkeep and updates, as well as less hardware in the building and less square footage taken up in the office. Saving energy. This is a factor on everyone’s mind given the economy, concerns for the environment and the growing energy crisis. “No one really thought about it up until now. But there’s a real focus on power, cooling and space because there’s a general mood of concern over energy costs,” says Reichman. Saving data. “Cloud computing relieves the smaller business from things like backup and recovery, which most don’t do a good job of doing anyway,” says Scavo. Any company big enough to provide data cloud services is likely to have more infrastructure to handle data security than the average small to midsize business. SIDEBAR: Cloud Computing Vendors Amazon EC2 — A funny thing happened on the way to becoming the biggest bookstore on the Internet. First, Amazon expanded to selling just about everything else available in retail making it the virtual Sears and Roebuck of the new millennium. More recently, with the launch of EC2 (Elastic Compute Cloud), which is still in beta, Amazon has revealed what is likely its long term business plan; to become the cloud service provider of choice for small businesses at affordable rates. Google — was perhaps the first company to build itself from the ground up as a data cloud, spending billions of dollars each year on additional servers and PC’s. There is no mother data center at Google headquarters running all those algorithims to conduct lightening fast searches while hosting email, dynamic calendaring and collaborative office applications. Google’s cloud is estimated to involve over one million PC’s and servers parceled out around the world. It’s only natural that they would monetize access to their subscribers. EMC Cloud — EMC is another one of the clouds gathering as this emerging market creates more buzz. The first tip off was the acquisition of online storage provider Mozy and more recently the startup cloud company, Pi Corporation. Pi stands for personal information. Cloud computing would be a natural progression for EMC, as it is one of the most popular vendors when it comes to virtual machine software (VMWare). Windows Live — Nothing could be more counter to Microsoft’s core mission than embracing and enhancing cloud computing. After all, Microsoft made its bones (and billions) selling software licenses by the seat and pushing its increasingly powerful Windows browser version after version. But clearly the folks in Redmond have seen the writing on the wall from the strong interest of web-based services like Google Docs & Spreadsheets and Salesforce.com. Windows Live is in the early stages of what industry watchers refer to tongue in cheek as the Windows Cloud O/S 3Tera — It’s a small company, but based on open source solutions and with its own patented Applogic technology is now in the process of rolling out its CloudWare services in stages. IBM’s Blue Cloud — It’s also still in the process of rolling out and is based on open source code. It could prove too pricey for smaller businesses, appealing more to the budgets of mid-sized and enterprise level companies.

Pay for Storage? Weighing the Free — and Low Cost — Options

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As a small to mid-sized business grows, so does the sheer volume of information generated each day: account information and budgets, along with databases of inventory and employee records. The list is endless. A generation ago, it was euphemistically called the paper blizzard. Now, it’s more like a digital Tsunami that only gets bigger and more difficult to manage for the organization without a storage strategy. “Archiving data is less about where to put it and more about how to get it when you need it,” says Andrew Reichman, an analyst from Forrester Research. Indeed, many small to mid-sized businesses make the mistake of growing out their methods for storing data like the business itself: piecemeal and as needed. The end result can be disjointed, irretrievable data that is mission critical to the company, yet scattered across a variety of discs, servers, and individual employee hard drives. The good news: data storage has never been more plentiful or cheaper. The trick is wading through the myriad of options available and deciding which one works best for your organization. In-house versus out The first big decision to be made is whether to keep all or most of the company data in-house or out-of-house. Traditionally, companies of all sizes have kept their information on site. However, using a third party host to store data online is increasingly popular. Out of house options What do Intel, Google, Microsoft, IBM, Seagate Technologies, and EMC all have in common? They are all heavily investing in online backup storage solutions; whether it’s buying startups like IBM snapping up Arsenal Digital, EMC acquiring Mozy, or Seagate absorbing eVault. And then there’s Google launching its own initiative called GDrive service. There are also countless independent companies (that haven’t been bought up yet) offering data backup and storage online and on the cheap. Here are some of the advantages and disadvantages for the growing company: Advantages: It’s cheap, fast to deploy, and turnkey requiring no staffing to maintain the data. Plus, vendors have the advantage of using economies of scale to provide better security and store data more cheaply than a smaller organization doing it all on its own. However, the most important advantage is really more basic than that. The biggest reason to go out of house is to get remote backup capability,” says John Longwell, research director for Irvine, Calif.-based Computer Economics. Simply put, you don’t want to have all your eggs (or data) in one basket (or place). If the building burns down or even just a poorly-timed snow day keeps employees away from the office during a critical time for the business, the results can be devastating. Off-site backup and remote access to information is a core need for most businesses today. Disadvantages: “The server and the application need to be in the same place. Going outside works if you’re talking about using Gmail as the company e-mail client and then archiving it all on Google, or CRM data with Salesforce.com. Businesses need to be careful which parts of the business processes they can give to someone else,” says Reichman. Even Amazon is now offering cheap data storage and retrieval programs like “SimpleDB”, which is in beta as of this writing. However, simple is the optimal word in that brand. It is a very simplistic way of searching and fetching data. It is not the place to store financial information a company may need to aggregate in a variety of sophisticated ways to generate specific reports. In-house options Despite all the hype over third party vendors offering online storage, in-house options make a lot of sense, as well, and may be more practical for many businesses. Advantages:  The obvious advantage is retaining control at all times. The other advantage is that the major disadvantages are disappearing fast. In-house solutions are getting cheaper and more effective too. “There’s a big shift among small to mid-sized businesses from on-board discs (data separately stored on each individual computer and server) to what’s called centralized network storage. This can be as simple as throwing a single appliance on the network that houses all the data. By centralizing storage, information can be pulled from multiple sources and aggregated into richer data. It also makes it easier to manage all the company information, control user access and retrieve it when needed. Disadvantages: In-house solutions mean buying gear, getting it installed, and then taking on the expense of maintaining it. “Sometimes it’s a tough pill for small to mid-sized businesses to swallow,” admits Reichman, who encourages executives to look at the long term savings of better data management specific to the business. It’s something an outside vendor can’t provide, as well. Deciding factors Costs:  Web-based third party vendors are cheaper, at least up front. It depends on the size of the business, however, whether they make sense. If a company has someone on staff to maintain a centralized storage network, then it might make more sense to invest in the equipment and save on vendor fees typically based on the amount of data stored on a subscription basis. What data and why and when it is needed:  How will users interface and retrieve information as they need it? A third party vendor may not be able to offer the sophistication needed to work with certain applications or databases. Then again, it may make sense to house older and less important data off-site and out of the way. Prioritizing storage needs: What’s the primary motive for storing data? Is it backup and security? If so a third party vendor is likely the answer, since it offers off site protection of the data and often smaller businesses don’t have the same level of security as the vendor (like encryption and less network downtime).  Sidebar: Data Storage Options Carbonite is designed to backup data on each individual computer or server. It runs constantly in the background backing up data and is handy for the desktop user who loses a file or accidentally deletes something of importance. Lost information can be retrieved immediately. This is not a likely solution however, for growing companies that need to manage data in a centralized way controlling access and aggregating data driven reports. Mozy Similar to Carbonite, it is designed for the individual user who needs his or her information constantly being backed up remotely in case of a virus strike or ill-timed computer crash. Mozy, however, does offer a professional version with a number of features like administrative powers to manage data from multiple sources and encryption. Its new parent company, EMC, may have something to do with the increasingly beefed up services targeting corporate clients. Pricing is based on a combination of price by seat ($3.95 per computer, per month) and 50 cents a GB per month xDrive is primarily targeting the consumer market. But for the small business just starting out, it’s worth consideration. xDrive charges $9.95 for 50 gigabytes of storage.  Based in Beverly Hills, Calif., xDrive is actually owned by AOL and markets itself as a preferred solution for backing up pictures, graphics and video for easy web access and collaboration with others. As is, it’s easy to imagine a business quickly outgrowing xDrive. But with AOL as its parent company, it’s also easy to imagine xDrive scaling up it services for growing organizations before that happens. Nirvanix is attracting a lot of attention, as well as high profile investors like Intel. The San Diego, Calif.-based data storage company is especially attractive to the small to midsize business market because it offers scalable storage services for a flat fee of 18 cents a gigabyte. What makes Nirvanix special is its application programming interface (API) that enables companies to easily integrate Nirvanix Web Services into their own company applications. In comparing just these four examples of online data storage vendors, there is at least one common denominator: they are all still growing out their corporate features to accommodate businesses. “The options are still limited today, but it’s getting there,” says Reichman.

Time to Try Online Backup for Your PCs?

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There’s no worse feeling for a PC user than realizing something important was just deleted — whether accidentally, from a hard-drive crash, virus, or power surge. Not only can it be a frustrating inconvenience, but the problem is magnified considerably when the data kept on the computer is essential for running a business. This can impact the business, its partners, and its customers. The only protection against losing critical information on your business PCs is to back up important files on a regular basis. Some mid-size businesses are already backing up computer servers regularly. But some of the most critical business information oftentimes resides on individual PCs. Businesses that have many remote workers or businesses that don’t have servers may want to also consider PC backup. Backup at the PC level can be handled in a number of ways, such as using an external hard-drive or server, using a tape-based backup system, or taking a leap of faith and hoping that employees are backing up important files using portable USB memory sticks or CDs or DVDs. For some businesses, however, those options are no longer good enough. Uploading files to an online backup company has become one of the increasingly popular solutions for small and mid-size businesses as costs have come down, the number of vendors increases as traditional offline storage firms such as EMC get into the act, and the risks of not backing up — or trusting employees to do it — are too great to the business. Benefits of online backup One of the biggest reasons to backup online is for disaster prevention. “Local backup solutions are prone to natural disasters such as floods, fires and hurricanes,” explains Vance Checketts, director of business operations at Berkeley Data Systems, a Salt Lake City-based online storage company best known for its Mozy services, which was recently acquired by EMC. “But more importantly, online backup solutions reduce the risk of human error because a professional, third-party organization is hard at work protecting your backed-up data.” For businesses, MozyPro pricing costs $3.95 per PC per month plus $0.50 cents per gigabyte per month. “The key advantage is your data is kept offsite — so your data is protected even if you’re having a problem at your office,” says Richard Shim, research manager for personal computing at IDC, the Framingham, Mass. technology research firm. After all, it was only in 2005 when Hurricane Katrina decimated much of the north-central Gulf Coast, causing more than 1,800 deaths and more than $80 billion dollars in damage. “Offsite storage translates to easy access — anytime and anywhere — so you’ll always have access to it,” adds Shim. Often considered an “insurance policy” for your critical work information, online backup solutions can also be automated so important files or folders are automatically backed up — after the workday ends, say, at 2 a.m. every night — therefore the employee doesn’t have to remember to do so manually. Price and other challenges  “The primary challenge with online backup is finding a solution that does backup well at a cost-effective price,” says Checketts. “Too many solutions are focused on online storage, which is quite different from backup, as [the former] is simply a cyber-locker without task-appropriate automation or encryption.” He says that businesses need a backup system that is automatic, secure, and cost effective. The cost for backup and storage is one of the key obstacles to more wide-spread adoption of the technology, says Shim. Many small and mid-size businesses are constantly watching the bottom line and decide to forego the expense for an ongoing backup system. In addition, traditional methods of backup, such as USB drives or CDs are so inexpensive. A 500GB external hard drive can be found for less than $100 these days, which is a one-time fee, compared to an ongoing monthly payment. “Cost can be an issue for a small business since you have to pay for monthly maintenance fees, to secure and manage this data,” explains Shim. Small businesses also have to grapple with the question of whether they want company information, e-mails, and spreadsheets to be in third-party hands — even if those third parties are trusted sources. “Depending on how sensitive that data is, there could be a security issue,” says Shim. “You give up a certain amount of security by making it more accessible online, trusting it in the hands of another company.” Mozy’s backup solutions, however, claim 128-bit SSL encryption to safely secure customer data during transport and 448-bit Blowfish encryption to secure the data on Berkeley Data Systems’ servers. Deciding factors Small and mid-size businesses need to consider a number of factors before taking the plunge into online backup: Do they have the resources for another monthly service fee? Are enough security controls in place at the online backup vendor to ensure that sensitive business data will not fall into the wrong hands? Will employees remember to backup important files each night on USB drives or CDs? What would happen to the business if a disaster struck — a fire, earthquake, hurricane, flood or other event — that destroyed business computers and all the business data stored on their hard-drives? Conclusion While not for every business, online backup solutions need to be considered by data-dependent businesses that could be wiped out in the event of a manmade or natural disaster. Not all small and mid-size businesses have the resources to spring for a disaster recovery backup site. The ease with which critical information and files can be downloaded onto a new computer is also a factor to help in the event of a computer crash or a hard-drive meltdown. The costs of trying to recover files in man hours alone probably would exceed a year of monthly fees for online backup. In addition, a recent Forrester Research survey found that when businesses left it to employees to backup important files, companies often had no way of verifying that backup copies were made. Automating the process of backing up data takes one additional risk out of running a business that is heavily dependent on electronic data. SIDEBAR: Online PC Backup Vendors Here are several vendors that provide online backup services targeted at the small and mid-size business sector: EVault – A wholly-owned subsidiary of Seagate Technology, the disc-drive manufacturer, offersEvault Desktop, an online backup service for protecting laptops and PCs. The company deploys such security protections as data encryption and state-of-the-art data centers. A Web-based management console can let your business monitor workflow and allow for flexibility to schedule times backups or additional runs. Iron Mountain – The records management and data storage company now also offers digital products, including an online PC backup product for small and mid-size businesses. The product allows a business to protect between five and 100 PCs with convenient, consolidated billing. Iron Mountain is a recognized name in data storage and boasts that businesses can “rest assured that their data is protected.” Berkley Data Systems (EMC) – This company’s MozyPro online PC backup has received several publishers’ awards. Now that this company is part of EMC, customers may be more satisfied with a big-name behind the start-up. The product offers automatic or scheduled backup, bandwidth-saving features so it won’t interfere with other business processes, and an interface designed with the “non-tech-savvy” user in mind so that it’s easy to use.