Costco Connection - January 2010

small business

Businesses may find
benefits in remote services
Computing

in the clouds

KEN BROMAN

By Eric Taub

YOU’RE A SAVVY computer user. You scan your hard drive for viruses. You regularly upgrade your applications. You back up your company’s data to an external hard drive. And then a natural disaster hits, your office is flooded and you lose everything anyway.

That was not going to happen to Mike Widener. Owner of a five-person accounting firm in Seguin, Texas, Mike saw other accountants’ businesses destroyed when hurricanes hit and their client files were lost.

“This is my livelihood,” Widener says. “I need to know that if something happens to my electronic files, I won’t lose any data and I can be up and running within a day.”

The solution, he realized, was to move copies of his computer files away from his office—very far away—to remote servers owned by Mozy, a company that specializes in cloud computing backup services.

Many uses of the cloud

The idea is simple: Instead of keeping your programs and data on a local computer or server in your home or office, let someone else store and manage the material for you in the “cloud”: remote servers kept in multiple locations throughout the country.

Data backup is just one use of the cloud. Companies large and small are realizing that they can ditch their in-house servers and let other people store and manage their e-mail, and even their favorite software, from anywhere in the world. Many are now using cloud versions of e-mail, word-processing, spreadsheet, calendar and presentation software. Microsoft is working on a cloud version of its Office suite. Sophisticated accounting and customer-relationship-management (CRM) software, such as Salesforce.com, is kept on a remote server and accessed from a standard Web browser.

By utilizing cloud computing services, there’s less need for an IT department, and

you don’t have to burn a backup CD every Saturday and take it over to your brother-in-law’s place.

Cloud computing is growing as high-speed broadband connections become widespread, making fast data transfer feasible. When colleagues need to revise a document, everyone can use their Web browser to view it in the cloud and make necessary changes, all on the same copy.

“With the cloud, you’re not proliferating versions of the same document across local PCs,” says Jonathan Rochelle, group product manager for Google Docs, a set of cloud computing services available by subscription.

“With cloud

computing ... you

bene;t from ...

economies of skill.“

—John Betz, Microsoft

But what about security? Many consumers raise questions about how safe their personal information is, given recent accounts of hackers obtaining Social Security numbers, breaking into banks and more. Cloud computing service providers respond that steps are taken to ensure safety—typically several layers of protection. And customers’ files are usually kept encrypted, safe from prying eyes.

“It’s simple; if we didn’t [take security measures], we’d be out of business,” says Raju Vegesna, head of product development and marketing for Zoho, a provider of cloud computing e-mail and office applications.

Devin Knighton, spokesman for Mozy, adds that his company encrypts all data on a customer’s machines, and that data is trans-

mitted via a secure connection. “Cloud backup can be more secure than local backup because it can’t be stolen and because it’s encrypted,” he says.

Many services on the cloud

By cutting IT costs and by not needing to continually upgrade both software and local servers, cloud computing can also be a bargain for many small businesses.

Just by switching to a cloud-based e-mail service, for example, a typical small business can reduce costs. According to Forrester Research, a local e-mail service can cost a business from $7 to $21 per month, once IT and hardware expenses are included. Cloud e-mail can be as low as $4 per month.

“With cloud computing services, you benefit from our ‘economies of skill,’ ” says John Betz, Microsoft’s director of product management. In addition to the expected coming release of cloud versions of Microsoft Office, the company also offers cloud computing for e-mail, CRM and instant messaging, among other services.

Even more esoteric and sophisticated services have now migrated to the cloud. Using Salesforce.com, for example, executives can track leads, maintain contacts, order ads and integrate other traditional CRM services without adding a piece of hardware in their own offices.

And cloud computing is easy to use, says Costco member Bill Kelly, chief information officer of Duralee Fabrics in Bay Shore, New York. His company uses e-mail and other productivity applications supplied through Google Apps.