Cloud computing implications for the IT support sector

October 18, 2011 Off By David
Grazed from Business Wings.  Author: Adam Bannister.

When Google unveiled the Chromebook in May, Sergey Brin, its co-founder, described it as “a new model of computing”.

And yet, the Chromebook is a mere laptop, a breed of computer which tablet PCs and smartphones are rendering, if not yet obsolete, then certainly ungainly and ill-suited to surfing the web.

But Brin wasn’t referring to the physical interface. Rather, Google’s new device, which is manufactured by Samsung and Acer, purports to be the first hardware purpose-built for using applications and storing data exclusively through the internet…


With just 16 gigabytes of hard-disk space to act as a fall-back cachet in case of connection failure, the Chromebook’s raison d’être is to enable users to do their computing entirely through a web browser (in this case, Chrome, of course).

The concept of delivering software and services over a network rather than a computer dates back to the 1960s, when American computer scientist John McCarthy speculated that "computation may someday be organised as a public utility". But it’s only in the last few years that broadband speeds have become fast enough to make computing through a browser truly viable.

Paradigm shift

Google is gambling – and sales figures are yet to be published – that the world is ready for a paradigm shift in how they use software and store data.

In truth, a number of cloud-service providers already provide ‘software-as-a-service’ (SaaS) to growing numbers of businesses. According to a survey by Cable&Wireless Worldwide, 45% of multinationals have adopted third-party-hosted cloud services in the past year, rising from 28% the year before.

Data management, including security, storage and data backup, was the most commonly used service (by 51%), followed by networking services (48%).

David Mytton, founder of Boxed Ice, a software developer whose first product monitors the performance of cloud-based servers, outlines the advantages of SaaS: “You pay a service fee and everything is maintained and managed by the server provider. You don’t have to manage software updates or any other infrastructure.

“You can get going a lot faster and because you pay monthly, you’re not tied into any contracts, so there is less initial capital outlay. You don’t have to buy a software licence; you just pay for your own usage, so it’s generally cheaper.”

Outsourcing the management of software and data, businesses can focus on their core competencies and enjoy greater flexibility – much the same advantages that fuelled the rise of other B2B services, such as recruitment, PR and marketing. Paying monthly fees to a cloud-services provider, which centrally manages and upgrades software and data on behalf of dozens or hundreds of customers, is hugely more cost-effective for a business than maintaining its own, internal IT infrastructure.

But will this de facto consolidation of IT maintenance spell disaster for an industry that has mushroomed throughout the still-nascent information age? Technological leaps forward have often brought an unwanted corollary: redundancies.

Rupert Murdoch’s newspaper group, News International, marginalised the striking printing unions in in 1986, for example, with the clandestine establishment of new printing presses, which reduced labour demands. Similarly, the reason SaaS is so much cheaper is because labour costs are reduced.

Google’s Chromebook could certainly be the nemesis of the multibillion dollar security industry based around providing antivirus protection for Windows. Google claims that Chrome OS, the operation system, is virus-free because it runs a self-check called Verified Boot upon boot up, which can detect and repair software corruption.

 

Businesses can liberate themselves from the burden of helpdesks, antivirus, firewalls, backups and so on if they start using Chromebooks and Google Apps, the cloud-based apps suite challenging Microsoft Office’s two-decade hegemony. Whereas the cost of maintaining each PC is roughly $3,000 a year when you factor in IT maintenance costs, US businesses (UK prices are yet to be announced) can rent a Chromebook for $336 a year ($240 for students).

Mark Osborn, director at digital marketing consultancy Acertis, thinks “there is going to be an impact” on the IT support sector. “On what scale, I don’t know, but you can see it happening already – a lot of big companies have shifted to the cloud.”

But a prominent advocate for the cloud industry suggests that the new paradigm offers as many opportunities as threats to the IT support sector. “I think cloud computing opens up a tremendous opportunity for IT support businesses to move much of the back-office side of IT into more resilient infrastructures and data centres,” says Andy Burton, chairman of lobby group the Cloud Industry Forum.

“It opens the market up for these ancillary services that set up, migrate, manage and integrate your data applications between your various depositories. Helping your customer manage the best of on-premise and in-cloud solutions is actually a great market in its own right.

The way people license technology in the software-as-a-service or infrastructure-as-a-service model opens up possibilities for the sector. They might sell services for a straightforward annuity that covers a range of costs, including IT maintenance.”

Centralised

Mark Osborn, whose company Acertis partners with cloud-based customer relationship management service SalesForce,  believes the impact on IT jobs of the centralisation of IT support can easily be overstated: “Many people looking after a company’s infrastructure will move on to work in data centres, which will still need IT maintenance staff. It’s not like the profession is totally dead, it might just be more centralised and less fragmented.”

Not so centralised, though, that Google can dominate the landscape to the degree that it dominates the search engine market. “Public cloud isn’t for everyone,” continues Osborn. “Some companies want complete control so they might build a private cloud, and that’s becoming quite common in big enterprises.”

Adoption of cloud services is more likely, says Osborn, if “businesses don’t have in-house IT expertise and it’s not core to their business.” Companies big enough to have in-house IT departments are less enthusiastic adopters, as Andy Burton, who is also the CEO of web hosting company Fast Hosts, explains:

“I would say small companies are more likely to adopt cloud services. For bigger companies, which will want a rich client experience, the cloud won’t necessarily be a benefit because of the volumes of data involved and connectivity issues.”

David Mytton suggests another reason for slower uptake among large enterprises: “It’s very beneficial for smaller companies and individuals because they can sign up and start using them immediately. It’s going to be slower for larger companies, because they tend to have more complex requirements and a longer sales process.”

The resistance of many businesses to cloud services is underpinned by serious misgivings about security and connectivity. “They wouldn’t issue security patches if they weren’t aware that there were security holes, and breaches happen every month,” says Andrew Corbett, membership services director at the UK IT Association, who cites the recent theft of millions of customers’ credit card details from Sony’s Playstation Network. “If Sony can’t stop it happening, how can anyone else?”

But citing Salesforce’s exemplary record, Osborn argues that cloud storage can actually be more secure than the traditional on-premises solution: “What’s more secure, an infrastructure set up and maintained by people who work for a company who aren’t particularly experts, or an infrastructure security backed by hundreds of millions dollars of investment and a huge team of qualified experts?”

And a stolen Chromebook does not equate to stolen or lost data. All the user needs are log-in details, without which data is inaccessible, and another Chromebook, to access their files.

That there are connection issues, however, is unarguable. “I don’t think the realisation is there yet about the importance of connectivity,” says Corbett. “Cloud service providers must see their resilience to connectivity issues as a priority.”

It’s difficult to envisage even the biggest cloud evangelists failing to retain some sort of contingency capability for when internet connection fails, however infrequently, particularly for business people using laptops and tablets on trains. So for all the advantages of the ‘cloud’, businesses will need to maintain some level of internal IT support.

“I believe both on-premise and cloud services be credible and maintained for the foreseeable future; one won’t replace the other,” says Andy Burton. “Challenges will remain that mean some rich content is better managed locally then in cloud. We don’t advocate that everything should be in the cloud.”

But with many balance sheets threadbare and a double-dip recession looming, the cost advantages of shifting the bulk of a company’s IT capabilities to a cloud data centre will be increasingly difficult to ignore, according to Osborn. “I don’t think every company will do it, but many will realise that they don’t need to bear the costs any more. I’ve seen the pain involved in having to run, manage and maintain infrastructure.

“There seems to be a global consensus that it works for all businesses, regardless of industry. It is highly flexible, scalable and it removes many IT maintenance tasks that are not core activities for businesses.”

Those in the IT support sector must confront – and capitalise on – the inexorable rise of software as a service, says Corbett. “When my server needs replacing I’m going to say, ‘well I’m not replacing it, I’m going to start using cloud services’. Unless the IT maintenance people start moving into cloud services themselves, they’re going to lose their customers.

“They need to consider becoming resellers of cloud services so they can get a margin on Google Apps, Microsoft Office 365 and IBM Symphony online. They need to convey that message to their customers before someone else says ‘we can look after your servers and do cloud as well’.”

Resistance, he warns, is definitely futile. “IT maintenance professionals should refrain from trying to put their customers off cloud – because if they do, they’ll lose. They should say ‘look, there are downsides, but if you want to do it, you can get the service from me for a low price. We can continue our relationship so you don’t have to go elsewhere.

“Don’t try and be King Canute, saying it’s not all it’s cracked up to be, because customers will say you’re only saying that because you can’t provide the service yourself – and go to someone who can. I’ve seen people in the IT maintenance business telling customers that they don’t need cloud, and they will lose customers. It’s like the dinosaurs: some of them did actually survive. You either evolve or you die out.”

 
CategoryNews