Discussion on:

The year in cloud computing: Key points in 2012

Hi Thoran: Thanks for sharing this insight into Cloud developments over the past year. You bring up key issues, including reliability, cost and security.

It's been our experience teaming with our manufacturing clients that its wise for organizations to analyze their specific situation carefully, taking time to look critically at the vendor's SLA - Service Level Agreement. In the case of Cloud ERP solutions, it is certainly more cost-effective up front due in part to the low cost of entry, but monthly fees might add up to be substantially more expensive than a traditional on-premise solution over the long term due to the vendors recurring revenue model. Some Cloud vendors tend to over-inflate the costs of in house IT while on-premise vendors underestimate these costs. Additionally, there is nothing to keep a SaaS vendor from increasing the monthly fees down the road unless specifically noted in the contracts. The possession of data is another area that requires additional scrutiny. Once again, a careful and thorough analysis is key.

We look deeper into these issues here http://www.ultraconsultants.com/is-saas-erp-really-a-good-investment/

Hi Thoran -
Great article. I would be great to get your take on some of the Cloud Services for Voice, like Hosted PBX in the Cloud, IVR in the Cloud, ACD in the Cloud, and Predictive Dialer in the Cloud. These are having a big impact for companies in the same way Cloud Computing is having a big impact, moving from a large Capital Expense for a PBX to an Monthly Recurring Operating Expense for "PBX (Voice) as a Service". Any thoughts?

Yes, I agree, reliability is the responsibility of the customer to a certain extent. Cloud services customers must look into this area, and make sure that the robustness and reliability of the selected solution are adequate to their business. If they want to pay the lowest possible fees, they must accept outages...

The fact that current stories about the dangers of cloud computing still exist makes it legitimate. It's not fear mongering at all. It's reality. Even if the cloud services outage was within the SLA, it is still a hit on the reputation of Netflix. One where competitors can take advantage and one where Customers may choose alternatives.

I live in a rural area. Some months back some idiot wiped out the communications trunk line to the town; all communications outside the exchange were down. No credit checks to the banks, no ATMs working, no Internet, no email, no outside phone calls. Once the extent of the damage was made known many of the businesses in town sent the majority of staff home as they couldn't do anything without access to the wider phone network or the Internet. Many people had issues as they couldn't buy anything on plastic or get money out of the bank. The grocery store let known clients charge stuff for a few days until they could get money again.

Many people drove the almost 50 kilometres to the next town to do their business there as they still had access to everything.

now image how a large company would go if their Cloud based service for business apps and data files got closed down for a day due to problems with the service provider or the Internet access - the cost could be horrendous. This is just one aspect that HAS to be considered before you go to cloud based services, yet few do and the service providers say nothing about it.