DC Velocity - October 2012

front management expense and concerns about the security of their data once it is removed from a proprietary network. However, many become “cloud converts” once they realize how much they can save by avoiding the purchase of hardware as well as the ongoing expenses associated with system maintenance and domain management.

“We save companies a ton of money over the long run,” he said, adding that many small to mid-sized businesses “ underestimate the ‘soft’ costs of running a system.”

CHANGE IS … GOOD

Yet with any new and disruptive technology, there are factors that trigger pushback. Worries have surfaced—mostly from operations folks—over the performance and reliability of a cloud-based system, especially in high-volume distribution centers processing large numbers of packages. (One of the biggest challenges for high-volume parcel shippers is to make cloud technology work with package weighing and cubing equipment that is already integrated into the premise-based systems.)

There can also be resistance from in-house IT professionals who see the cloud as a threat to their relevance, even though many acknowledge the benefits of the technology.

Then there are the unusual incidents that are seared into memory and become an obstacle for those seeking to promote the cloud-based model. Starvaski of Kewill recalled a situation where a customer, a large Midwest-based e-tailer, had his communication line to the cloud accidentally severed by a farmer plowing a field above where the line had been laid. The incident occurred just at the start of the e-tailers’s peak shipping season. The company was offline for several crucial days, costing it large sums of money and prompting it to swear off the cloud for good.

“It’s a situation like that which makes it hard to persuade a company to use the cloud,” Starvaski said.

Gene Trousil, chief deployment officer at One Network Enterprises, a Dallas-based provider, says cloud-based systems have built-in redundancies so that data can continue to flow without interruption if a site goes down. Soll of CXT added that a large number of companies have come

to him seeking cloud-based solutions after their own servers crashed and they needed to get back online quickly.

Some worry that their data will be compromised once it’s removed from a proprietary “firewalled” system and exposed to the Internet. In an effort to allay those fears, cloud providers point to the sophistication of their high-end systems, which they say can protect information far more effectively than most conventional networks can. They claim that they are subject to regular outside audits to evaluate the integrity of their systems and that they have no interest in their customers’ data anyway.

Cloud-based software vendors
also note that a cloud infrastructure
is more scalable than an on-premise
model, meaning that it’s easy to
expand the cloud’s capabilities to
keep up with a user’s needs. They
point out that the cloud network
benefits from being a multi-tenant
model; because a cloud network is
supporting dozens of customers
instead of just one, the cost of
upgrades and improvements can be
spread across the entire customer
base.