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Cloud computing: A whole lot of fluff

 

As I’m staring at an article in Business Week, I keep searching for the article to explain why my company wants to pay for something we already have. The “cloud” is by definition just a network of computers and the reason they came up with the name is because of the original diagram shape of the internet (a cloud). In the cloud are networks, applications, data, servers, etc…the usual stuff, which I already have.

What am I paying for with the cloud? In all respects you are paying for three things – security, expertise and opportunity costs.

Supposedly there are armed guards guarding these database centers where your cloud is located. Ok, that’s a step up from the glass windows and wooden doors at the office. Security covered.

The expertise consists of IT managers making sure you get the right amount of speed and continuous accessibility of your information.

The opportunity costs could add up. As accountants, we think of everything to make the cloud have superior cost effectiveness over a server. The cost of the server, say $5,000-$10,000 a year depending if you buy a new one, the IT personnel hired, the relevant costs of your business growing out of your current server, the rent space, carrying costs and the electricity overhead of the server.

But in order to take advantage of these opportunity costs you would have to do a lot of service analysis. How much accessibility will you need? When will your accessibility needs change? What services do you require? In accounting there’s busy season and then there’s really busy season, so calling up the cloud and saying you are going to increase your accessibility requirements and pay more the next couple of months isn’t the easiest estimate. If estimating sales variability and growth at the drop of a hat were that easy then we’d all be working alongside guys named Professor X and Obi-Wan Kenobi.

The cloud is having all your information online, in real time, freely secure and accessible all within reach. But that distance is only as far as your nearest wi-fi connection, and that’s what it truly boils down to. Sure wi-fi and Internet hot spots are popping up exponentially but they just aren’t everywhere yet. Until they do I look forward to the days without a cloud in the sky.






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