Cloud computing offers South African SMEs a new way to consume ICT services that could give them more flexibility and help them reduce technology needs. Lance Harris investigates. 

With most small and mid-sized businesses looking for ways to use technology to compete with larger companies, adoption of cloud computing is expected to soar among South African SMEs over the next three years.

By moving some or even most of their business applications to cloud, smaller businesses may be able reduce operational and capital costs associated with IT; access better technology than they could afford to buy on their limited IT budgets; and reduce the complexities associated with running IT systems, for example the need to patch software and constantly back-up data. Cloud computing essentially allows organisations to access IT services and applications as online services provided by service providers rather than needing to install them on their PCs and servers. These services—ranging from applications to server capacity to storage space—are often billed for per-user, per-month.

As much hype as this technology category has received over the past three years, SMEs are being cautious in their adoption of the cloud. The World Wide Worx SME survey for 2014 finds that adoption of the cloud by small businesses in South Africa is slow but steady. The market researcher estimates that about 22% of local SMEs are currently using cloud services, up from 9% in 2012.

Focus on the core

However, most industry observers expect that adoption of cloud computing will soar as the technology is demystified and SMEs begin to understand its benefits. Cloud solutions benefit small to medium sized businesses by giving them the ability to scale up their IT infrastructure as the business demands, says Stuart Cheverton, business development consultant at Hitachi Data Systems. “The flexibility of being able to scale a solution up or down, and as and when required, is a significant benefit for the mid-sized business,” agrees Alan Collins, emerging products architect at T-Systems South Africa.

Delon Karrim, senior systems engineer at EMC Southern Africa

Delon Karrim, senior systems engineer at EMC Southern Africa, says that the flexibility of buying technology in an operational model is the biggest advantage of the cloud for SMEs. In addition, cloud-based solutions also make it easier for SMEs to extend access to their systems to mobile users, allowing them to access applications and data wherever they are and on nearly any device. “I’d summarise the two main advantages of the cloud as the speed of deployment and the potential cost-effectiveness,” says Andy Bull, managing director of Mitel South Africa. “When you employ new people, there isn’t the same high sunken cost of getting them up and running. You can easily predict the costs of adding new users to your systems.” 

Getting a start

So, where should a small or mid-sized business start with a move to the cloud? Many organisations begin by moving messaging, collaboration, file sharing and archiving solutions, says Cheverton. These back-office services are less risky to move to the cloud than business-critical applications such as billing or transactional databases, he adds. “As cloud services develop and we see upgrades of international bandwidth, more and more services will be outsourced, especially among the small and mid-sized enterprise businesses,” Cheverton says.

Karrim recommends looking at the software as a service offerings available from office productivity and CRM vendors. “They’re easy to access. Most times you go to an online store, download, create an account and install. If you don’t like it, there’s probably another offering you can use instead,” he says.

Choosing the right vendor

As the SME Survey 2014 shows, SMEs are keenly aware of the risks attached to using the cloud for business-critical applications and services. One issue to consider is where the cloud provider’s data centre is hosted—and hence where the client’s data and application are located. Some organisations might be concerned about the implications of relying on the undersea cables that link South Africa to the rest of the world for access to their customer data and core business applications, says Cheverton. Others might be worried about regulations such as the Protection of Personal Information (POPI) Act, which implies that personally identifiable information shouldn’t be processed or stored in countries that don’t have data protection regulations that complement the POPI.

“The track record of the cloud provider is critical,” says Collins. “How long has it been in business? How long has it been providing cloud solutions? What sort of customers does it have?” In addition, SMEs should look for cloud service providers that are members of the Open Data Centre Alliance (ODCA), says Collins. One focus of the ODCA is ensuring that organisations are able to move easily from one cloud provider to another. This helps customers avoid getting locked in with one service provider and also ensures that different services and applications located in different clouds can communicate with each other.

Karrim says that some questions for an SME to consider in choosing a provider include:

• Its cost model and how it fits with the company’s cash flow and operating budget.

• The service provider’s service level commitment — can it guarantee that the payroll or e-commerce site will be up-and-running 99.999% of the time?

• Where is the data stored?

• Who can access your data? 

• Does the customer have the flexibility to cancel at any time?

FLAVOURS OF THE CLOUD

Many IT services can today be delivered in a cloud model; here are three of the most common examples:

Infrastructure as a Service (IaaS): Renting computing resources such as CPU power and storage from a service provider.

Platform as a Service (PaaS): In addition to computing resources, PaaS offerings provide the customer with operating system capabilities as well as tools and libraries that organisations can use to create applications.

Software as a Service (SaaS): This form of cloud computing allows an organisation to use a hosted software application or function

without owning any of the platform. The customer usually pays a subscription to use the application, and the service provider takes care of all the underlying infrastructure as well as enhancing and maintaining the application.

Article first appeared in TechSmart Business, May/June 2014 to be found here.