Moving to the cloud? Prepare to embark on a journey

Ulrika Hedquist examines two layers of cloud computing - Software as a Service and Platform as a Service

Moving to the cloud? It's quite a journey

Software as a Service (SaaS) and Platform as a Service (PaaS) are both layers in the phenomenon that has become Cloud Computing.

The cloud has turned out to be more than a buzzword. Uptake of cloud services has quickly moved from the SME space to larger organisations in the past couple of years. Offering fast deployment, flexibility and reduced cost, the services on offer are especially suited to fast-growing smaller players but large enterprises are also reaping the benefits.

However, you need to do your research and don’t expect all your problems to be solved in the cloud, say local users who have moved into the cloud and vendors selling the software.

Software as a Service

For charitable organisation St John as a membership-based organisation that relies on public goodwill and a large number of volunteers, the IT department needs to get the support of the board and stakeholders before launching into new projects, says the St John director of ICT, Peter McDowall.

So that is just what McDowall’s team had to do last year when it wanted to implement a cloud-based CRM solution. With the SaaS model said to be faster and cheaper to deploy, that was the path St John decided to go down, he says.

The system was designed to help manage stakeholder relationships and create a 360-degree view of its customers, which helps with the organisation’s fundraising initiatives and sales activities, says McDowall. St John didn’t have an enterprise-wide CRM solution before, but a number of systems that covered different areas, he says.

After gaining the go-ahead from the board, St John narrowed its list of vendors down to and a hosted version of an on-premise solution. Salesforce won because it was cheaper and faster to deploy, he says.

Thanks to Salesforce’s built-in development platform,, it was also a better match to St John’s future plans. The team has already built its first custom application on the platform – an inventory management system – and plans to build many more, he says. The main benefits of the development platform are speed and cost, he says – “often off-the-shelf solutions will cost more and take longer to deploy and customise than we could build from scratch on that platform”.

Another reason for choosing the online CRM system was the foundation, which contributes one percent of its staff’s time, products and equity to supporting not-for-profit organisations. For St John, this means a number of free and discounted user licences.

To date, the solution has delivered what St John was expecting “and a little bit more”, he says. However, there were challenges around finding the right integration solution for the mix of cloud and on-premise systems –a solution that would get all the benefits out of Salesforce and also plug into all the on-premise systems'.

In the end, St John chose Pervasive on-premise integration software, which has a cloud migration component. McDowall can’t stress enough the importance of taking integration into account early on. “We focused on integration upfront, but we could have put even more emphasis on it.”

The move to the cloud was a strategic shift for the organisation, he says. “We needed the board and stakeholders to trust that this new direction was the right one,” he says.

Questions like ‘Can we trust Salesforce to be available?’ and ‘Can we trust them with our data?’ arose and needed to be thoroughly discussed, he says.

“It all came down to accepting that as a large organisation that specialises in this area, Salesforce are going to be better equipped and have better expertise to deliver a solution that is more reliable than anything we could do ourselves,” says McDowall.

The number-one barrier to SaaS uptake used to be security, says New Zealand country manager Aden Forrest. But with the company now being ISO 27001-certified, as well as being audited twice a year, and with a number of large banks, insurance companies and trusted brands among its customers, security has become less of a concern.

Integration and data sovereignty were also among the big issues Salesforce used to face he says.

Today, of all Salesforce’s transactions (around 300 million a day) 65 percent are server-to-server transactions so more transactions go through integration than through the browser or mobile device. For organisations that have rigid data resiliency requirements there are now solutions that can sit inside the company’s firewall and capture data on its way to Salesforce and encrypt it, he says. Ten years ago, Salesforce was focused on the SME space but the company has made its way up the food chain to multi-national organisations. Internationally, five thousand government and not-for-profit organisations are currently using the platform now, says Forrest.

Construction company Mainzeal jumped to the cloud early this year when replacing its spreadsheet-based system with an online Oracle CRM solution.

“Previously, we had no development capability,” says Warren Chapman, Mainzeal’s national business development manager. “We needed to upgrade because we needed a repository where we could put in information such as leads, opportunities, contacts, companies and so on. We wanted to be able to do better analysis, track pipeline projects and prioritise projects.”

The SaaS system provides an accurate, easily accessible repository of vital CRM information, bringing high visibility and a high level of consistency, says Chapman.

It was rolled out in January and the online CRM system has helped the company achieve the goals it had envisioned to 80 percent, he says. “We are still in that grey area, finding things that don’t fit our business well. We are getting things modified and changed as we roll the system out,”

He says there were some initial hiccups in finding the right configuration of the system to fit Mainzeal’s business outcomes.

He recommends engaging with the cloud services industry to find the right solution for your company.

“Don’t try to do it yourself,” Chapman warns. “Get advice early. People often try to home-grow solutions when there are actually some excellent models out there worth looking at.”

Leanne Buer, head of infrastructure and business applications at Gen-i, advises organisations to look at the move to cloud-based services as a journey.

“Don’t expect your issues to be solved without going through a rigorous process, taking into account risk profile and main business drivers,” she says.

Ask yourself what your organisation expects to get out of the cloud, she says. How will it help you reach your business goals? Is there an opportunity to further enhance processes and reduce cost? The next step is to look at what has been virtualised already and to organise your assets. Then make an informed decision about what parts of the infrastructure you want to shoot off to a private or public cloud and which applications are better left on-premise.

“There is some work to be done in understanding how cloud-based services can enable business outcomes,” she says.

Gen-i launched its own cloud-based infrastructure-as-a-service offering, ReadyCloud Server, in March this year. The service lets customers rent computing power and storage, on-demand and accessible over the internet, rather than running it on computers inside their own business. ReadyCloud Server is hosted locally inside 14 earthquake-proof, former Telecom phone exchanges, says Buer.

Ten customers are using the services now and there are about 60 more in pipeline, she says. Adding to the infrastructure offering, Gen-i is also launching backup-as-a-service and storage-as-a-service in November, which will allow customers to stand up servers in minutes, she says.

For a lot of customers, the initial driver for shifting to the cloud is reducing cost, says Buer, but in many cases, that quickly becomes a secondary driver to improving business process.

She says security concerns are still the main barrier for adopting cloud solutions. Knowing that the data is kept on-shore reassures many clients, she says, and that Gen-i has 50 staff in its Security Operations Centre dedicated to managing its security services.

Platform as a Service

Founder of online backup specialist DataLock, Andrew Schick, also believes in offering local cloud services. Schick started his company two years ago, at age 24 and it was acquired by datacentre provider Maxnet earlier this year.

Schick used to have his backup services hosted in Maxnet’s datacentre where he had his own servers, but the fast-growing startup constantly needed more space and capacity.

“We paid a monthly charge to Maxnet to use a slice of its multi-million dollar datacentre, but we still had to pay huge amounts of capital expenditure to get and maintain our own servers,” he says.

DataLock came to a point where the company just couldn’t keep up with its own growth. Schick was facing considerable investments in infrastructure and equipment to stay on top. He then came across Maxnet’s platform-as-a-service offering, which would let him expand as much as he wanted and pay a monthly fee for what he used. Maxnet then bought DataLock and Schick runs it as a separate division.

“Now, we are getting the use of a few million dollars worth of investment but we were only paying $1500 to $2000 per month,” he says. “It gave us more in terms of capability and capacity than we could ever have afforded before. It meant that we could start using the environment straight away. We didn’t have to order it, provision it, set it up and employ staff to support it 24/7. All of that is built into the cost.”

When Computerworld spoke to Schick, he had just added another 5TB of storage to his company. “With Maxnet’s infrastructure we can just turn on 5TB of space and we can do it again next week. It lets us grow as our revenue grows.”

People that want the absolute cheapest option out there are likely to go to the big US online backup providers, Schick suggests. But many New Zealand businesses choose local online backup providers for trust and security reasons. “The success of DataLock was my knowing all the customers. When they rang they could always get hold of me,” he says.

Most DataLock customers are in the five to 50 employee space, he says. Among the customers are a number of medical companies, law firms and accountants, organisations with stringent security requirements. To meet that demand, DataLock encrypts customers’ data using 256-bit Advanced Encryption Standard. The data is then transferred over the internet from their system to DataLock’s storage using 1024-bit Secure Sockets Layer encryption.

Maxnet is now a reseller of DataLock’s services, launching a cloud backup offering for its retail customer base. Thanks to Maxnet’s background as an ISP, the offering will bundle free data with the online backup service, says Maxnet’s product development manager, Wayne Voss.

But locally hosted services is not the answer for everyone. For BrandFM, which provides a secure, online repository where users can find and download logos, high-resolution images and source artwork, hosting its servers locally just didn’t make business sense.

The company, started in 1997, provides the software and infrastructure to host and deliver companies’ marketing material. The Auckland-based company can be described as an always-on, independent go-between, so companies don’t have to go to their creative agencies every time they need a logo or image. The customers are mostly larger enterprises and government agencies, says BrandFM managing director David Vaassen.

He initially leased servers, infrastructure and bandwidth from a local datacentre. But when the company decided to re-write the Microsoft-based system with open-source web framework Ruby on Rails three years ago, it shifted all its hosting to the US. “The reason for that is we wanted to become global company,” says Vaassen.

On one hand, having the servers hosted locally meant better performance and user experience for local customers, he says. “But the reality is that traffic cost in New Zealand is so high. We are moving very large files so traffic cost was always an issue for us,” he says.

Vaassen is now leasing servers from Slicehost, a US-based hosting company that was recently bought by Rackspace, and this has slashed his traffic costs. Using Slicehost works really well globally, but in New Zealand there are still some latency issues, he says.

He was concerned that some of his clients might ask questions about the data not being stored in New Zealand, but that has never happened.

“I think the market is fairly mature in that regard. I personally think there is a bit of scaremongering going on from local vendors,” he says.

BrandFM is well backed up, he says. Vaassen runs multiple slices in different datacentres and backs all data up to Amazon. In addition, the company has local copies of everything.

He says Amazon is a highly distributed network. “If Amazon and Slicehost went down, well, then the whole web is down,” he says. “Security is always a concern, but unless there is a nuclear war or some sort of large magnetic, atmospheric event, I don’t think we are going to have a problem. And even if the rest of the world went down, we still have local copies of everything.”