Cloud computing has been the transition that most software platforms and services have made in the last few years which is driven by the cost savings, ease of upgrades, and the ability to scale. The most notable cloud computing companies are probably Salesforce with their CRM platform, most of use use e-mail in the cloud(Gmail, Hotmail, etc), and also many business apps like company e-mail and HR systems are switching to cloud computing. Now what happens when the cloud suddenly disappears? What happens when your business has become dependent upon a service that resides in the cloud and you get an e-mail or even worse, read a press release, that the business that supports your application is either going out of business or is already out of business. Can your business recover?
Many businesses are using Software As A Service (SAAS) cloud computing programs, but are not prepared for what would happen if the service suddenly disappeared. What brought this to my attention was the announcement earlier this week that Ning was discontinuing their free offerings and reducing staff by 40%. Now my first thought is that it is not a problem because business owners should expect to pay a certain amount for the services that enable them to run their business and this will only affect the people who do not. If you are not familiar with Ning, it is an application that allows you to create your own niche social network in minutes and manage your community without the need to maintain a site, deal with security issues, or manage member details. All of that is handled by the Ning platform. Their are a number of different options available where you can(or could) set up a free network or upgrade to some of the options that are not free, but have more functionality included and do not display ads.
According to reports from Ning last year, they were 12,000 networks paying the $55 per month out of over 1 million active networks. That is just over 1%. Many of the networks are setup by people who have no other members to their group and who have not been back to the site after setting up the network, but it is safe to assume that there will be A LOT of active, regularly used networks that will be affected. Should they immediately start paying the $55? May be, may be not.
The point is that for businesses to used cloud computing and at full mercy of another company has to make many nervous. You are not only hedging a bet that you are choosing the best application for your business, you are also betting on the viability of the company. That the service that is being provided by the company will last as long as you need it to.
A few things that businesses should do to decrease the pain in the event this happens to a service they use:
Back up your information – Most applications have a export tool or an API that allows your business to regularly backup your information to a location that is not on their servers. Take advantage of that! If the business that is supporting the software fails, it will cause some pain, but you have a much better chance of recovering quickly if you have all of your information.
Review company information as well as application details – It is not enough to just choose your cloud computing service based on the bells and whistles of the application. You also have to review the company history and financial data that is available to make sure the company has a chance of surviving. If you a comparing a 5 person startup that offers the same service as Microsoft, but is a little bit cheaper, it may be in your best interest to pay the little bit extra for the sanity an security of knowing that the support is available in the event your application has problems.
Evaluate how essential the application is to your business – You can afford to take more risks with parts of your business that are less essential and that you could function smoothly without in the event of a hiccup. For your essentials like e-mail, CRM, phone system, you must take extreme caution hen choosing your vendor as the pain that is caused by these applications failing is not easily solvable.
The cost savings and continuous improvement in quality of cloud computing services make them very attractive resources, but consider the full cost of the software including disaster recovery costs and make sure that you are making the best decision for your business. If you are not comfortable with the solutions that are available or the companies that are providing it, then it would be worthwhile to keep those functions in-house until your comfort level increases. There are enough tasks to keep you busy as a business owner without worrying about your core business applications failing. Choose wisely!
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