In December 2010 Bucan Holdings, the owner and operator of Host1, one of Australia’s most experienced hosting providers, announced the formation of BitCloud, a company providing cloud services for small to medium businesses. Bennett Oprysa, Bucan’s chief executive, explains why SMBs are turning to the cloud as a means of gaining control over IT costs and why cloud services are a natural evolution for hosting providers.
Define “cloud computing”.
Wikipedia says cloud computing is “location-independent computing, whereby shared servers provide resources, software, and data to computers and other devices on demand”. For BitCloud, this means the provision of services ranging from application and collaboration software through to disaster recovery solutions and computing and storage-on-demand. Or in other words, Infrastructure-as-a-service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS).
What does cloud computing offer?
Flexibility, scalability, reliability, performance and most of all, affordability. SMBs have struggled with IT costs for decades. Deciding when to invest and how much to install are difficult decisions. Cloud computing means companies can easily access computing resources as and when they need them.
They get the benefits of a dedicated server at a fraction of the cost of deploying and maintaining their own infrastructure.
They don’t have to find the money to invest upfront in hardware and software, and they don’t have to fund the IT skills and personnel that an in-house capability would otherwise demand. Administration is reduced and there are benefits from the provider’s economies of scale. It’s a compelling argumentfor most business owners, but particularly so for anyone involved with a SMB.
Aren’t companies hesitant about trusting so much of their IT to a third party?
This isn’t a new situation for business. Companies have been outsourcing all kinds of services and tasks for years. If you think about it, cloud computing is in a similar position to the one that hosting was in a few years ago.
Back then businesses were cautious about handing over responsibility for their email or web servers to an external organisation. These days, few companies would think twice about it because, for the majority of SMBs, hosting has proven to be the most reliable and cost effective way to manage their IT.
What we are finding is that organisations that have used external hosting or who have some familiarity with outsourcing tend to very quickly recognise the benefits of cloud services.
This perhaps explains why so many traditional hosting companies are considering expanding into cloud services. In many ways it’s a natural extension of the existing customer relationship, but there are dangers. Not every host provider has the skills to deliver a full range of IaaS, PaaS and SaaS.
As a service provider, you have to look carefully at where your expertise lies and develop your offerings accordingly.
Does the typical SMB understand the concept of cloud computing?
There’s still some confusion in the market but SMB understanding – and uptake – are on the rise and we expect this to continue. There’s so much being written and said by media, vendors and analysts, and somewhat unusually for the IT industry, the messaging tends to concur rather than conflict.
Everyone seems to believe it’s a good idea and everyone points to similar benefits. So when we start discussing the cloud with prospects we find they are generally interested and curious rather than uncertain or cynical.
What drives a company to make the change to cloud services? From a technical perspective the major drivers for cloud computing are things such as the need for enhanced security, better system up-time, guaranteed service level agreements, disaster recovery and backup services, and user access anywhere, anytime.
Businesses approach us because they have – or are about to – outgrow their shared hosting environment for reasons such as too many memory hungry applications or because they need more CPU power. The option most IT people suggest is to establish a dedicated server or a virtual private server, but this requires skills and knowledge beyond the ability of the typical office IT person. It’s too expensive and not feasible for many SMBs. Cloud services offer a safer and more cost-effective way of obtaining speed and power.
What do you believe are the major challenges when dealing with the SMB market?
You are dealing with a very fragmented audience. There is no medium capable of reaching all your prospects, so finding and educating them about the cloud takes time and energy. Second, you’re unlikely to be dealing at a purely IT level.
The conversation is often being held with the CEO, general manager or even owner and that means that discussion must centre on the business rather than technical benefits. Fortunately, this is easy for cloud services as it is from the business perspective that the cloud shines brightest.
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