“Cloud computing” is one of the most important trends in business software. Until recently, ignoring that trend and carrying on business as usual has been no big disadvantage, but that’s changing quickly.

The transition towards cloud computing represents a complete change in the way businesses implement and use software to stay ahead. Yet a recent survey of food professionals revealed that only about 22 per cent of food organizations engage in cloud computing. That means that 78% of food organizations are late to recognize and adapt to an irreversible trend.

That irreversibility isn’t a bad thing. The reason cloud computing is taking over is that it’s simply better in nearly every way for both software companies and their users. This blog post tells you what you need to know.

The meaning of “cloud computing”

The essence of cloud computing is that data and processing power for all customers of a software product are centralized. That’s different from the traditional distributed software model, where every user owns and operates a complete, self-contained copy of the software. You’d store your data locally on a hard disk, and the computations necessary to make the software work happened inside the computer on your desk.

With cloud computing, software lives on an offsite server and its customers share it. The server stores everyone’s data and does the processing work for everyone. Your own computer is then just a device for reaching the server remotely.

It’s called cloud computing because, from the user’s perspective, it isn’t clear where the software actually lives. It’s just ‘out there’ in the amorphous mental picture most of us have of the internet. In reality, it’s just remote servers.

This description is a simplification of what usually happens in practice, but we’ll come to that later.

Understanding the risks

The paradox of cloud computing, and the main reason people resist it, is that all of the above strikes our intuition as being obviously bad when it is actually all good news.

Sharing processing resources with strangers; having their data bumping up against yours; being subjected to their abuses and misuses of the system, and all of it located who-knows-where with who-knows-what levels of security and oversight. For business leaders used to complete control over the most critical parts of their business, this all sounds terrifying.

But that terror comes from a dangerous double misunderstanding. First, the risks of cloud computing are not nearly as great as you think because they’re aggressively mitigated by IT professionals who think about nothing else, which is more than your own IT team can say. Second, storing your own software and data locally is much more dangerous than you realize, precisely because you are not an expert in that area.

Cloud computing benefits

The most cynical critics would say that software developers and vendors prefer cloud computing because it lets them bill customers with recurring subscription fees, which are more profitable for them than one-time retail sales. That may be true sometimes, but the benefits of cloud computing for everyone are indisputable.

Business continuity

Several of cloud computing’s greatest benefits can be grouped under the heading, business continuity. Business continuity basically means preventing the things that could bring your business to a stop and being prepared to recover as quickly as possible if any of those things do happen.

We said earlier that the idea of the software operating on a single remote server was a simplification. That’s because in practice there’s a lot of redundancy built into most cloud computing platforms, covering you against everything from local power outages to intercontinental natural and human-caused disasters.

Redundant systems take over seamlessly when they’re needed so the end user is never even aware there is a problem. Microsoft, Amazon and others can offer their cloud customers this kind of redundancy because that’s their business. You simply can’t build it yourself.

That goes for malicious outages as well as accidental ones. Using a reputable cloud platform for your business software means you can achieve a level of data security and a degree of anti-virus and anti-malware vigilance not possible on your own. When major malware appears in the news, it’s priceless knowing that Microsoft, Amazon, or whomever provides your cloud service, is on the case with the best possible people and tools. It isn’t your problem.

In the food industry, time is critical. A brief outage can mean a lot of missed sales and waste. In the case of malware, software outages are rarely brief. Your ability to take, process and deliver orders on time is something your customers take for granted, and letting them down can have long-lasting consequences to your credibility and bottom line. That’s why it makes sense to have dedicated experts focused on maintaining the continuity of your business.

Performance

As well as making security someone else’s problem, cloud computing also transfers the obligation of maintaining current hardware to someone else. Your software provider is the one responsible for maintaining hardware currency and performance. You only need an internet connection and any device with a web browser.

That’s important because, in the food industry, you can’t keep customers holding on the line while you wait for your software, or do without realtime data because reports have to run overnight to avoid overtaxing the system. To deliver the performance customers demand from their food suppliers, you have to have software that performs quickly and reliably for you. And that’s even before accounting for the dreadful impact on morale slow software causes.

As with business continuity, the goal here is to take something that is critically important to your business but outside your area of expertise and putting it in the hands of people who are experts in those areas. It has the added bonus of taking something that would go on the books as an asset and treats it instead as a current liability, which can deliver accounting and other business advantages.

There is one notable exception to keep in mind, and that is when you have a poor or non-existent internet connection.

If consistent, fast internet access isn’t something you can buy in your region, that’s probably your best argument for installing software on your premises rather than choosing a cloud-based option.

Easy maintenance and upgrades

When you leave it to an expert service provider to select and maintain hardware for you, they usually also take responsibility for keeping the software current.

When you install software on your premises, software maintenance and upgrades are disruptive and painful. That maintenance can include both planned and unplanned service outages and often require expensive hardware upgrades that add to the disruption. The actual business of upgrading the software has to be done by either your own IT people or external people you have to let in and supervise.

The whole process can be so risky and onerous that many companies will just forego it, allowing their software to fall years behind the times, with the expected impact on morale and profits. In the food industry, the impact of outdated software extends to food safety, regulatory compliance and contractual obligations, so there are real costs and risks involved with using obsolete software.

When you choose cloud software, you just approve the upgrade or maintenance work and it’s all done remotely, often while you sleep, and almost always without any disruption to your business.

Mobility

Closely linked to the performance advantages of cloud software are the mobility advantages. When your software is in the cloud, any authorized user from your company can use the software from anywhere with only a web browser and internet connection.

Besides the obvious convenience, that kind of connectivity often helps salespeople respond to prospect and customer queries more rapidly and accurately. Leaders can get their hands on key data when making decisions, wherever they are. Workers on the shop floor can look up and update inventory in real-time using wireless handheld devices. The devices make picks and put aways much easier, and improve coordination among production facilities, distribution centers and head office. Telecommuting works better, too.

Productivity, ease of use and employee satisfaction all improve in countless ways when your business software offers mobile, handheld access.

Conclusion

In general, the risks of cloud computing get overstated while the benefits get overlooked. Resistance usually stems from a misunderstanding of the risk/reward profile. As with any business decision, it’s important to properly understand both the risks and the rewards so that you can make an informed decision.

Consider the costs of system downtime, viruses and malware, inconsistent performance, difficult upgrades, limited access and the drain on your IT team that comes with managing all of these challenges. When you properly account for these costs, the financial math almost always favors the cloud even before you start tallying up the subjective benefits cloud computing offers. That’s the real reason cloud computing is taking over.