Sidus CEO Weighs in on the Cloud Computing Trend

By Mark R. Smith, Editor-in-Chief
Business Monthly Newspaper

Cloud computing. It can be a somewhat nebulous term, a new-ish catch-all that has been embraced by the information technology (IT) industry as technology continues its forward march.

While most observers say that cloud computing isn't really anything new, it's becoming a more appealing option to companies, especially smaller enterprises, that want to keep their technical operations up-to-date while concentrating their energies on their core missions and competencies.

While companies that opt for that approach often unite embracing outsourcing, what one company considers to be cloud computing might differ from the perspective of another.

To Dave Kile, vice president with Ease Technologies in Columbia, "It encompasses a range of services, including applications like MSWord and its documents, data and services, as well as hosting a web site, e-mail and sales contact information, all delivered and consumed in real-time over the Internet," he said. "Its increased acceptance in the business world has been a growing trend."

In fact, Kile called the adoption rate for cloud computing "huge" based on recent figures from Gartner Inc., an IT research and advisory firm headquartered in Stamford, Conn.: It referred to cloud computing as "the one technology that you can't afford to miss out on for 2010" due to the reported 15% growth in 2009.

In addition, IDC, another provider of market information for the IT market, predicts that $17.4 billion will be spent on cloud computing in 2009 and estimates that figure will become a $44 billion bite out of the IT pie in 2013.

New or Not?
While such numbers are eye-catching, some observers do not consider cloud computing to be a new concept, including Roger London, chairman of American Security Challenge in Ellicott City, who calls it the "next generation of remote computing.

"In some way, shape or form, some companies have been providing applications across the Internet for about a decade," said London, noting the Application Service Provider model that first came to prominence through companies like US Internetworking, which was based in Annapolis. "Back then bandwidth was slower, but conceptually it wasn't much different."

The difference now, he said, "is that now you have web-based technology where you store data and perform functionality remotely - but you still can direct what you do from your desktop or locality via a BlackBerry, for instance."

It's true, added Kile, that the difference has to do with additional services, such as storage and infrastructure, that make cloud computing more accessible today.
"I'd say that the other change now is the high adoption rate by small businesses, mainly because it provides them a lower cost entry point for storage, applications and databases that would otherwise have been too costly for them," he said.

"This way, other businesses have put up those entry costs and expertise," said Kile, "which has allowed many small businesses the opportunity to use technology or services that were too cost-prohibitive."

Varying Perspectives
"What people who are new to the concept don't realize," said Christine Abunassar, Microsoft alliance manager with DocPoint Solutions in Maple Lawn, "is that when you say 'cloud computing,' it's important to understand that the interpretation varies, depending on the user."

For instance, a small-to-medium-sized businesses may relate it to what is known in the IT industry as software as a service (or SAAS), from providers like Salesforce.com, QuickBooks online and now Microsoft with SharePoint, which is hosted off site - as opposed to a real enterprise "cloud" that might actually host an entire custom application at a hosting facility like the Annapolis-based Sidus Data (see below) that offers IT infrastructure, security and a high-speed Internet connection.

"Businesses do not have to make the IT investment to set up a data center in-house, because they can just pay a subscription/monthly lease for that IT hosting service. That's what people mean by managing [their computer operations] in a cloud," she said.

Still, there are risks in going the cloud route, especially for a business that may want to control more of its IT data and operations in-house for security reasons.

"If you have IT support/infrastructure on-site, you probably don't want to go to a cloud unless there is a compelling cost/lack of resource justification," she said. "But many businesses don't want to be concerned with constantly installing the latest hardware requirements and software updates. Focus on core business and leverage the 'cloud' as part of that business strategy, but only if it makes sense."

For Client Benefit
That's the approach taken by Colby Hall, a solo family law practitioner in Columbia.

"Cloud computing gives me great flexibility, since I can access all of my client information, calendars, you name it, from anywhere in the world," he said. "When I was out of the country recently, that helped."

Hall said it's very efficient, compared to the traditional purchase of software. "SAAS means you're constantly receiving updates, as opposed to buying them each time an update is issued from a given manufacturer. That also means you have to arrange to have it installed or do it yourself."

While some companies have security concerns about cloud computing, Hall said that he and many other lawyers do not. "I find cloud computing extremely secure. All of the information is saved on remote servers, so a localized disruption is very unlikely."

Hall said that cloud computing is somewhat more costly than software "because it's typically a subscription, but you have updates, support and, I find, better integration of applications," he said, noting that his arrangement costs $60 per month from a company called Rocket Matter, which is based in Boca Raton, Fla., and focuses on the legal market. "After updates, training is offered immediately, and I've attended the webinars - from my desk."

Hall is sold. "This is fantastic. Lawyers nationwide are using SAAS services like Rocket Matter with increasing frequency, as are small businesses in general. The bottom line concerns how my clients benefit, and I can access their information securely, anytime, via any kind of computer or smart phone."

Geared Up and Ready
The increasing momentum of the cloud computing trend has not been lost on Mark Powell, CEO of Sidus Data in Annapolis, who has procured equipment from sources such as Dell, Cisco and other manufacturers to prepare the Sidus cloud, which will utilize VM Ware virtualization software.

Powell said the Sidus cloud just emerged from the testing phase and is now fully operational and will offer an initial capacity of up to 210 terrabytes.

"To me, the real advantage of the cloud is that it fits into what everyone is looking for in today's world, which is creating efficiency and driving down cost for everyone," Powell said.

Traditionally, each Sidus customer would have needed its own standalone system. "But that's different with a cloud," he said. "Cost, performance and the ability to rapidly increase the client's scale while still operating in a shared, secure, robust environment are what make that difference."

Pricing at Sidus is based on a sliding scale, "but the cost for the level of infrastructure provided is less than the clients having to pay for their own standalone system by far," he said.

With the new hardware and software in place, Powell and company are just waiting to see how far they can ride the trend. "We've already noticed intensive demand for these services that have exceeded our projections," he said, "and we expect that the majority of our new clients will be employing the cloud model."