The Future is Cloudy

In our homes we don’t collect rain water and use it as our main source of water; instead we utilise the services of a water provider e.g. Thames Water. Similarly, we don’t have electrical generators in our gardens we simply link in to the national grid and purchase our power from one of the power companies. If we become unhappy with our power company of choice, we can easily change to another without the need to rewire our houses.

This utilisation philosophy is now rapidly gaining popularity within the internet space and has produced its own term; ‘Cloud Computing’. The cloud computing rational is about providing services that companies and individuals can use within their own websites (normally for a monthly fee). By the way, do not confuse cloud computing with ‘distributed computing’ which is where large computational tasks are split up and undertaken by a number of networked computers in parallel.

Currently there are a number of companies offering cloud solutions; everything from full e-commerce systems to ‘modules’ which will provide functionality that to either buy-in or develop would be prohibitively expensive.

For example, Bazaarvoice offer components which allow users to rate and review products as well as ask and answer questions on them:
 

For the above service Bazaarvoice will charge around £1000 per month which includes analytic reports on the data. This may sound expensive but when taken in context where e-commerce licenses can easily cost £100,000, requires an IT department to maintain and offers less developed reviewing capabilities then the Bazaarvoice module begins to look attractive.

To integrate with cloud services a number of paths are normally available. From iFrames and javascript blocks to server side web services the one ethos which is maintained is ‘simplicity’. Ease of integration is certainly one of the top reasons for opting to use a cloud service over a traditional self hosted solution.

The other main reason for choosing the cloud services or Software as a Service (SaaS) route is cost. The pricing model is that of subscription and therefore very low upfront costs. Of course, over time the cost of ownership can be high but arguably the pain of ownership should be lower (software upgrades will be transparent, no hardware issues, no staff required to maintain it etc).

Currently cloud services offerings are very popular within the CRM, E-commerce and social network sectors. Within ‘Search engines’ and CMS SaaS is less developed. However, this is likely to change; this week Microsoft came to talk to us about their Azure project (http://www.microsoft.com/azure/default.mspx ) . Microsoft view cloud computing as the future and have created Azure to allow companies to easily develop and deploy SaaS services.

Azure is only available for developers at the moment but when it goes on general release you can expect an explosion of new cloud services as the path to make money by selling your cloud services has just been widened.