Cloud computing no panacea: bike manufacturer

New Zealand cycle company IT manager cautious on the cloud

While vendors rush to deliver platforms to enable a shift to cloud computing, some users are yet to be convinced.

For example, manufacturer and distributor Sheppard Industries turning some common arguments in favour of the cloud on their head.

Sheppard Industries, the company behind the Avanti bicycle brand, went live on Lawson software's ERP and launched a new e-commerce trading platform, AvantiPlus.com, in August after setting an aggressive implementation timetable due to a peak summer selling season. AvantiPlus supports both Avanti's retail channel and customer service.

It's a project that couldn't have been achieved on Avanti's previous platform without significant customisation, says Chris Runciman, Sheppard's IT manager. The focus in now on extending the capabilities of the new platform, he says.

But despite Lawson making serious preparations for a cloud future, developing a platform called the Lawson Grid for launch next year, Runciman will take some shifting.

Runciman says despite seasonal peaks and troughs in its business of the kind cloud computing can address, Sheppard has plenty of capacity to manage.

Sheppard has a kind of internal cloud, using virtualisation from VMware, he says. Further, the cost of hardware, often cited as a driver for a cloud migration, has fallen so much it is no longer considered a huge issue.

"The computing cost per unit at sheppard is falling through the floor," he says. The shift to virtualisation has halved infrastructure costs in net present value terms.

A new IBM blade server arrives this week, he says. It is no longer about huge sums of money.

"Whether I would use a cloud to manage seasonal demand? We don't have an issue there. We can support a large increase in internal users and hardware is now so cheap," he says.

He says a cloud-based multi-tenented solution could address a very large user base, but Sheppard does not have to deal with those types of loads.

Runciman says the ability to dial up and dial down capacity is attractive, but Sheppard would not want to put its ERP into an externally managed cloud just yet.

Runciman says ubiquitous applications are going to the cloud first and people are learning about it there. Lawson's M3 software would also go there easily, he says, but the economics are not yet right for Sheppard.

"We can deliver a fully managed platform cheaper," he says.

Lawson's country manager, Asbjorn Aakjaer, says Sheppard's comments mirror others as virtualisation becomes pervasive. People are interested in the cloud and studying it closely. Another driver has been lacking in New Zealand, he says: a fully flexible, truly utility-based hosting model.

"Until lots of these options are available, people will look at it cautiously," he says. "It takes time. People are comfortable with cloud delivered mail now. As options grow it might require a mental shift."

Paradoxically, such a shift has already happened in some areas where sensitive data is involved, he points out -- such as external payroll and human capital management systems.

Runciman says as a user he has to be confident any cloud provider is there for the long haul. During the application server provider (ASP) goldrush of the early 2000s several disappeared leaving "horror stories" behind.

Runciman says he needs absolute confidence around service and performance issues and is watching the Lawson Grid project closely.

"I would have more confidence putting my ERP software into the Lawson Grid than on Amazon. It carries the Lawson brand and they will want to protect that come hell or high water."

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