But of course, as an industry, we’re equally good at going in circles, and getting embroiled in distractions.  It's not unique to ICT but extremely frustrating nonetheless.  ICT is increasingly at the heart of most modern businesses, taking a pivotal role that will often swing the balance between success and failure.  For most businesses in 2009,  IT is the most important asset, that enables a business to be competitive.  So our clients need us to be focused on them, and not distracted by what is new, shiny or exciting.

Every time a religious war breaks out in the ICT industry, it’s incredibly frustrating.  It used to be IBM vs everyone else.  Today its Microsoft vs everyone else, and the blogs I’m reading suggest that shortly it’ll be Google vs the rest.  We worry about Mac vs PC, Linux vs Windows, Microsoft vs Open Source.  It’s all a massive and unnecessary distraction because the right answer has always been obvious once you focus on the business needs of your customer.  Of course these needs change over time, and the right answer also changes, reflecting both the dynamic nature of business and the constant innovation that we’ve come to demand.

Over the last few months, a new force has emerged.  It’s called “cloud computing”.  It used to be called “hosted” or “ASP”.  Like many innovations, it’s not actually new.  20 years ago, it was called “bureau services” – and indeed some of those old bureaus still exist, in particular in the payroll industry. 

So, cloud computing is a proven idea, tested over the ages.  So why’s it back in vogue?  The simple answer is to reflect on the reduced cost of the necessary telecommunications services, along with their improved reliability and performance.  But then again, is anyone actually satisfied that their internet is sufficiently reliable or quick?

A brief glimpse through history

Bureau services faded with the introduction of the personal PC.   Legend has it that PCs were introduced almost in a guerilla-like challenge to corporate IT departments.  Businesses demanded flexibility that the corporate green screen couldn’t offer.  Fuelled by dedicated hobbyists, the forerunners of today’s ‘open source’ enthusiasts, businesses were able to adopt exciting tools like Visicalc and Wordstar.  (For those that don’t recall these, they were the predecessors to Lotus 123 and Wordperfect – the software ‘everyone’ used before Microsoft introduced their Office suite)

The demand was flexibility, and increased productivity.  Networks were rare (files were shared with disks - actual flexible disks!)   The ‘experts’ were hobbyists, often more enthusiastic than knowledgeable, and typically extremely unprofessional.  As well as introducing the revolution, many unfortunately helped give it a poor reputation for service. 

None of this mattered.  Businesses could now perform complex calculations, prepare documentation and keep better records, without relying on the IT department.  The power was incredible, and the PC revolution took off.   Look around any home or business today, and the outcomes are undeniable.  Sure, there are other factors, such as the commercialization of the internet, and technology advances particularly in the mobile space, but it’s all been fuelled by a demand driven out of the flexibility of personal computing.

Back to the future then?

Hosted, or cloud computing takes a number of guises.  Most providers have invested in datacenters with all the safeguards that most businesses crave, but can’t justify themselves.   The physical security is intensive, along with fire suppression technologies, redundant power and internet, 24/7 staffing and much more.  These facilities offer a level of assurance that your average business simply could never provide for themselves, and they can make it affordable by sharing these resources over a number of customers.

They’ll offer these capabilities in differing ways.  It may be as simple as renting you space in their datacenter to house your servers.  Or they may make computing capacity available on their servers for your business.  Other hosters will go beyond this, and offer software as well. 

The software you can ‘rent’ may well be the standard tools you use anyway, or they may be specialized, like the payroll example that we’ve already considered.  In fact, most of us have been using cloud computing for ages.  Hotmail accounts, Google accounts, the online whitepages and so forth are all example of cloud computing.

What’s the catch?

Hosted, or cloud computing, is well-established, and well-proven.  You’d think then that it was the obvious choice.   But is it?

I’m always frustrated by sales people over-promising.  ICT sales people have always been guilty of this, and it gives our industry a bad name.  Likewise, they often fail to put the best interests of the customer first, and try a “one size fits all” approach. But of course, it doesn’t.

The first false promise that’s often made is that it’ll be cheaper.   Depending on the provider, this may, or may not be true.  One reason that it might not is that all the extra security costs money, and the provider will need to recover it.  The only means to do so is to charge their customers, and depending on the numbers this may work out, or it may not.  Other factors include the depreciation rates applied to the equipment – for example you may find the provider expects to recover the costs of the capital over three years, whereas you might have a longer expectation.

The second is that you only buy what you need.  True to an extent, but most of these guys are trying to run a commercial business, the same as you are.  If they are investing capital in meeting your IT requirements, they will likewise want you to commit to a term so they can be assured of a reasonable return on their investment.  This is entirely fair, but it means you are entering a contract that’s going to see you pay for the costs over time, just the same as you would for any normal lease.  Except that the items you are leasing are a service, so you don’t end up with any physical plant or equipment, nor direct control over it. 

That leads on to the next promise – that you’ll always having the latest versions, with no upgrade pains.  You’d be naïve if you thought you weren’t paying for this over the life of the contract.  And of course, upgrades are always going to result in changes that need to be managed. 

So hosting isn’t a good idea?

Make no mistake – the providers are in a competitive market and they work hard to do a good job.  We think that cloud, or hosted services, are definitely a good idea.  We just don’t think they are a silver bullet, and certainly won’t solve every problem.  The evangelists who make excessive promises won’t help establish credibility.

So what should you do?  Well, again, there is nothing new.  Simply fire up a spreadsheet and assess the costs and benefits of each option for your particular project.  Do it on a project by project basis, and don’t expect that what’s right in one circumstance will necessarily be right in another. 

We see cloud services as part of an overall IT solution.    You’re always going to need to have your PC and printer in your office.  The question is “what else”.  Some businesses host everything, but we’re seeing the increasing application of the smart, targeted use of cloud services.  For example we have a number of clients using online backups, or online email archives – reducing the items they need to manage.  Smaller clients are using hosted Exchange email, and SharePoint for collaboration, while having a small local storage server within their office.  Even our Kinetics KARE is a form of cloud services, offering hosted network management services. 

A hybrid approach allows a business to mix and match, applying technology in the most efficient manner to solve their unique requirements.  One size does not fit all, even within an organization.