Benefits and Issues within Cloud, SaaS

Cloud Market Size

The Cloud market is one of the most rapidly expanding market segments in all of business.

It is expected that cloud computing will be $270 billion market by 2020 and is expected to grow at a CAGR of 30% every year. Cloud is the business of the future as all major corporations are slowly orienting their businesses towards cloud. For example, we see Amazon, Google and Alibaba building businesses based on cloud services. Companies are betting the future of their core businesses on Cloud. Amazon has made references to the role of Amazon Web services in driving profit, rather than its e-commerce venture. Amazon is working hard on building a dominant cloud presence.

Some Interesting Facts about The Cloud Computing Market:

1. End user spending on cloud has been rising steadily and is expected to cross $180 billion in 2016.
2. Each year businesses across the United States spend over $10 billion on cloud computing and storage.
3. 90% of businesses around the world have admitted to using cloud related services for their IT operations.
4. Only 20% of organizations worldwide have a cloud specific budget.
5. By 2017, cloud workload is expected to grow 4 times than the current levels.
6. SaaS software revenues are expected to cross $100 billion in 2016 as they continue to grow at an overwhelming rate of 20% year on year.
7. Spending on cloud computing infrastructure is growing at a rate of 30 percent each year.

 

Software-as-a-Service platform is the largest of the three cloud layers. Growth analysis of the SaaS market reveals that it has been growing at a tremendous speed of 20 percent annually and is expected to present a $90 billion market opportunity by 2020.

Nearly 30 percent of IT heads identify public cloud implementation as a top priority in 2016.

Some key aspects of Cloud computing are outlined below:

 

1. Six Benefits in moving to the Cloud

There are some obvious benefits to Cloud Computing, or moving data management and associated business process management into a centralized ‘cloud’ or hosted solution. However, it cannot be emphasized enough that these benefits need to be tracked, monitored and proven. Firms moving to the Cloud, should have a methodology in order to ascertain precise costs and benefits.

 

6 bottom line enhancing benefits in moving to a Cloud Computing Model:

 

1. Lower up-front CRM cost

The Cloud by definition, means you don’t have to buy software or server hardware.
Instead of the capital expense of traditional on-premise CRM systems, a cloud subscription is treated as an operational expense.

2. Faster returns from CRM

This depends on the type of Cloud deployment [Private, Public, Hybrid, with no application software to be installed, or some application software to be installed on user devices]. A main driver behind Cloud models, is the speed to set up users [minimal time]; ease of set up [depends if a client install is needed]; and the ability to outsource all IT software and hardware commitments.

3. Reduced IT overhead

Your Cloud partner pays for everything related to the system and its infrastructure. This must reduce your personnel and IT related cost structures. Firms might still need IT support, a Cloud provider interface, or some software staff on premise. It will depend entirely on the exact nature of your Cloud deployment.

4. Connect with other Cloud technologies

Usually one Cloud process solution, can be integrated with other business processes residing on the Cloud. An example would be a Cloud CRM, integrated with Cloud Marketing and Cloud Partner platforms. Integrating various Cloud systems can provide utility, interactivity, and timely information exchange.

5. Predictive Cash-Flow

A Cloud CRM system should be easier to budget since the license costs are typical calculated on a per user, per month basis and are usually contracted as a known cost and rate into the near future.

6. Easy to scale & reduce IT-related issues

A major benefit of Cloud computing is that you can scale through resource management and elasticity tools, to accommodate cycles of demand and usage. Availability, reliability and fault tolerance are some of the technical hallmarks of a well designed and responsive Cloud System.

 

2. Migrating to the Cloud

Moving your on-premise IT resources to the Cloud is a daunting task. There are many upfront labor costs including the following:

• assessing which delivery and deployment models are necessary model[s];
• analyzing which data in particular should be cloud-enabled;
• planning the details on how precisely one should move current on premise data to the desired delivery/deployment;
• establishing the various layers of security depending on the delivery/deployment model you will use;
• modeling and understanding in detail the concepts of elasticity, redundancy, resiliency, and failover.

A detailed specifications document needs to be built which identifies which targeted IT resources and applications are to be cloud-enabled and all of the steps involved in moving an application to a secure cloud.

As a part of this document you need to understand from your Cloud Provisioning partner:

1. Network details – bandwidth, security, redundancy
2. The logical architecture of the data center from IP blocs to controllers
3. All of the IT assets in the data center [from the control room, to the server in the rack]
4. Security
5. Center failover plans in the case of a catastrophe
6. Any single points of failure

3. Security Issues should not be dismissed

Cloud computing comes with the lucrative promise of cost efficiency, innovation and ability to scale up businesses on demand. However the security and privacy risks associated with cloud still pose significant challenge.

Cloud computing areas which require security and risk assessment are:

• Data Integrity
• Copied, corrupted data due to hacking
• Recovery of good data after hacking/system wide failure
• Privacy issues for clients around data protection
• Trojan horse; trusted consumer problem
• DNS attacks
• Malicious intruders

There are many levels of security to worry about, at all levels of the cloud architecture. Moving to interdependent networks always brings risks.

 

4. Best practices for managing cloud security risks

• Be updated about latest monitoring services.
• Limit the access privileges of office staff.
• Have a proper understanding of laws and jurisdictions related in your respective domain.
• Conduct timely security audits of the host.
• Enquire about rights and privileges of the third party and have full information about the kind of data available for them.
• Be sure that the security policy of the cloud service provider and your own organization are in sync.

The most important factor in avoiding and managing cloud security threat is to prevent key credentials from being stolen. Next is effectively managing insecure interfaces. Adding too many layers to API interfaces can expose them to security risks. It is essential that the organizations understand the security issues associated with management of cloud related services and protect interfaces with proper due diligence.

 

5. Migrating to a SaaS model

There are many types of Software as a Service. Cloud based, cloud driven SaaS is different than many forms of what is termed SaaS. Many SaaS products are simply client – server systems, pushed into the Cloud [or ‘forklifted’ which is a common term of reference]. These forklifted systems of taking the client and server software off premise into the ‘cloud’, have some advantages.

• Application infrastructure components such as the database and operating system remain the same and can be managed in pretty much the same way.
• Customizations are preserved because each customer uses their own dedicated instance of the application and database.
• The licensing regime remains familiar — indeed, many client-server SaaS contracts even accommodate traditional perpetual licenses as an alternative to the less predictable pay-as-you-go model favored by SaaS purists.
• Less costly for the vendor to deploy

A fully Cloud enabled SaaS is different than the forklifted variety. They don’t operate in a client-server environment but in a multi-tenancy, multi-client mode. The code is constructed in a different manner, based on different data and usage models.

There are however some steps along the way to a full Cloud SaaS and forklifted client-server applications are part of that journey. This approach would fit many firms the best. Forklift the current products into the SaaS model, built on top of an outsourced IaaS platform and then over time, turn the next generations of the produced modules into truly Cloud premised software applications.