A Publication of WTVP

Whether you realize it or not, you’re probably already using cloud-based services, and have been for a while. Yahoo email, Gmail and Google Docs are a few examples—we just don’t think of those services in those terms. Backing up your data through an offsite service like Mozy or Carbonite? You are using cloud-based services. Storing your photos on Flickr, Facebook or a multitude of other sites? You are in the cloud. The concept has been around for awhile, but it only recently gained a new name: cloud computing.

If you are already using cloud-based services for smaller tasks, you may begin to wonder: Why not use cloud-based hosting for our “line-of-business” applications? For a doctor, that might be their EMR system. For an accounting firm, that might mean Quickbooks. For a lawyer, that might be their case management tool.

Why not indeed? There are inherent advantages to the cloud:

It all sounds so good…why not just sign up?

Like many technologies in their infancy, cloud-computing standards aren’t very well defined. Before you click YES—and ship your most valuable technology to a cloud provider—you need to do your due diligence.

We are still in the “Wild West” stages of cloud computing standards because frankly, we don’t have dependable, comparable standardization between different company’s cloud offerings. There are organizations, such as the IEEE (Institute of Electrical and Electronics Engineers), working on developing standards for portability, interoperability and operational conventions. These types of defined standards are critical in moving toward a dependable model of cloud computing.

Until there are defined standards for cloud offerings, you have to be vigilant in asking questions, getting answers and protecting your business. First and foremost, get it in writing. Cloud computing services are easily initiated, typically through click-through agreements online. If this application is critical to the operation of your business, it is best to take the time to understand all of the variables that go into such an undertaking.

Service Level Agreements
It is important for the contract to include a service level agreement (SLA) stating specific parameters and minimum levels for each element of the service provided. Some of the items in the SLA pertinent to cloud computing include:

Ownership and Disposition of Data
Since your data will reside on a cloud company’s infrastructure, it is important that the contract clearly asserts your company’s ownership of that data.

Your company needs to know in advance how it will switch to a different solution once the relationship ends with the existing provider. This is to avoid vendor lock-in and allow your data to migrate freely to another service or back in-house at your choice in timing.

Know where your data is located. Depending on your field of business, a variety of legal issues can arise if a cloud computing provider’s data center is in another country. It is important for the contract to identify the geographic region within which data center hosting your data may be located.

Who is responsible for the backing up of your data? What if the user accidently deletes a record, but it is not realized until three days later? How do you recover that information, and who is responsible for providing that service?

It is easy to forget that cloud computing is still dependent on a physical data center. All vendors are not created equally. A SAS 70 compliant center is generally preferable for cloud computing situations as there is no common standard defined for the cloud.

» The ultimate goal of the cloud model is for computing to become more like a utility. A lot of people use the analogy of electricity. The old “self-hosting” system is like having to build, own and operate your own power plant outside your house. The cloud is like purchasing electricity from the utility.

When you purchase electricity, you only pay for what you use. You don’t care what kind of technology they have at the power plant, just what a kilowatt-hour costs. If your needs quadruple in size, you don’t have to build another power plant—the utility takes care of all of that.

Some cloud services are providing the model already. Amazon is a great example, and one of the first to deliver on this type of model.

Cloud computing companies can also be victims of disasters and other unforeseen events. To protect your company, you need to know the provider’s minimum disaster recovery and business continuity responsibilities as it pertains to the level of service you are expecting.

You also need to consider your own infrastructure. Now, your Internet connection is more important than ever. If your connection to the Internet is down or degraded, how is that going to affect the service you provide to your clients? In these situations, redundant Internet connections through separate carriers are recommended to keep you connected to your applications in the cloud.

Vendors typically attempt to get companies to focus on the initial buy-in costs. Minimum purchase volumes, multi-year commitments, and other indirect costs (redundant Internet, as stated above) are other factors to consider when determining the actual cost of the service. Make sure when comparing pricing of providers, you are comparing apples to apples. The devil is in the details and the details are usually in the service level agreements.

Cloud computing is definitely starting to make its mark as a significant shift from the way technology solutions have been implemented in the past, and it comes with its own unique set of challenges. Keeping an eye open to not only the type of cloud service being delivered, but the quality and levels of service will help ensure that you and your business are mitigating as much risk as possible while gaining the benefits of this advantageous new technology. iBi