http://www.reviewjournal.com/business/technology/some-businesses-cloud-computing-pays-dividends


What is the cloud? It’s not as scary as you might think.

Although the name evokes an image of ethereal, tough-to-grasp computer technology, it’s actually something most people have experience using.

Online banking?

In the cloud.

Your free email accounts?

Those, too.

Using the cloud means your computer data and programs are stored in data centers rather than your office. Data centers are facilities where servers are housed and maintained by IT professionals.

Cloud computing has become popular in recent years for convenience, added security and potential cost savings of not having to buy computing hardware and have IT workers on site.

Surprisingly, the cloud is not new technology. It’s just undergone a name change in the past four or five years.

Jason Mendenhall, executive vice president of cloud at Las Vegas-based Switch, the largest data center in the world, says the cloud business model has been around for some time, though there are new cloud technologies.

What was once called “hosted services” or “managed services” are now called “cloud services.”

But the information isn’t floating around in the sky somewhere, as the name “cloud” might suggest — it’s located in a real-life, on-the-ground location.

“The term cloud is very misleading,” said Jeff Grace, CEO of NetEffect remote-managed IT services in Las Vegas. “To most folks it suggests their stuff is off in ethers somewhere.

“To explain cloud computing in simple terms, it’s taking applications and data and moving them to a data center.”

Tom Andrulis, CEO of Intelligent Technical Solutions, an IT company that serves small and medium-sized Las Vegas businesses, simplifies the definition of cloud even more: “It’s just your stuff in someone else’s space,” he said.

Easy enough, right? With that in mind, here are the basics to migrating your business to the cloud.

IS THE CLOUD RIGHT FOR YOU?

Any kind of business can be migrated to the cloud.

Locally, cloud clients work in fields such as law, billing, construction, nonprofits, retail and accounting.

“The only candidates that aren’t a good fit at this time are an organization running a lot of graphic-intensive programs,” Grace said, pointing to companies who carry out intensive design and run programs such as Autocad, Final Cut Pro, Photoshop or InDesign.

There are two main obstacles with hosting businesses who run 3-D design or video editing, Grace said.

One, the customer would need expensive, high-end hardware in the data center, which could eliminate cost savings because the cost of the specialized equipment could be passed on to the cloud customer.

Two, clients wouldn’t get the same “real time” performance as if they were doing something 2-D, such as Excel spreadsheets or simple documents.

In that case, it might be better to keep operations in-office, he said.

Though for most small businesses, the cloud is a good fit, said Dan Rodrigues, CEO of Kareo, a cloud company that specializes in medical office software and services.

Kareo, of California, recently bought Las Vegas-based Ecco Health medical billing.

“Small practices have been challenged with tech because their only option historically was to install on-premise solutions,” Rodrigues said.

A lack of options required small businesses to buy their own equipment and have IT services on site. Servers alone can cost tens of thousands.

The cloud eliminates this problem, allowing businesses to pay only for services, typically by the number of people who will access the account.

Andrulis says average fees range from $30 per user to $250, depending on what services are included.

The cost of using the cloud is typically 10 to 20 percent more than a business would pay for IT services alone, said Grace.

At its core, cloud costs cover four categories: program licensing, for services such as Microsoft Office; resources and infrastructure located in the data center; data center support; and end-user or client support.

For most small businesses, Andrulis recommends “hybrid” cloud services, which includes hosted email and files, and general programs like Microsoft Office, but no customized programs.

At the top of the cloud services menu is a “virtual office space,” that includes specialized or even customized programs, with a central line of business applications, customer relationship manager package and accounting software.

Andrulis said the best candidates are people who work from home or businesses that have multiple offices, eliminating the need to buy costly or redundant equipment.

He warns, however, it’s not a one-size-fits-all solution.

“Businesses should be realistic about their expectations of the cloud,” Andrulis said. “A lot of people think of it as this magical thing that will solve all their problems.

“The reality is it’s just a tool. You have to use it as a tool just like any other. It’s not for everyone.”

KNOW WHAT YOU’RE GETTING

If you think cloud services could help your business, the best thing to do is talk to a professional.

“If you ask 10 people about the cloud, you’ll get 11 answers,” Mendenhall said.

For this reason, he recommends seeking out experienced cloud providers when trying to learn about the technology. It will save time and the headache of having to sort fact from fiction on the Internet.

Rather than rely on solo Internet research, Mendenhall recommends asking a trusted technical adviser or setting up a free consultation with Switch.

Switch serves more than 500 customers from startups to Fortune 1000 companies, including 45 cloud-computing companies locally and internationally.

“Very few can help you navigate that space,” Mendenhall said. “We’re really thought leaders in the cloud computing space because of all the cloud companies we work with.”

Switch helps potential customers understand the cloud landscape and decide what services are best for them. Sometimes, that means more than one provider.

David Rounds, CEO of UpTime IT in Las Vegas, notes that it’s important to go with a reputable company, one that has been around for a while and isn’t in danger of closing and taking your information with them.

“Make sure you want to be with them for a long time and have faith they’re going to be around forever,” he said.

If forever won’t work, it’s important to know a cloud company’s policy about migrating out of the cloud.

While migrating in can be pretty simple — usually a plan carried out over a number of weeks — there can be expensive catches to getting your information out.

“It’s easier to migrate in than it is to migrate out,” Rounds said.

Besides a cost of thousands of dollars, customers looking to leave the cloud or switch services would lose accounting records, transactional history, forecasting and other reports.

“For small business, that could be very painful to lose your transactional history,” Rounds said.

As a final consideration, it’s important to be able to identify the problem you’re trying to solve by migrating to the cloud, Mendenhall said.

While cloud computing is a lucrative management tool, it won’t improve everyday business on its own. A clear objective must be defined.

“At the end of the day, the goal is for someone to manage and own the infrastructure for you so you can focus at the business at hand.”

Contact reporter Kristy Totten at [email protected] or  702-477-3809 .



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