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Thinking about Cloud Based Software?

So, What is “The Cloud” Anyway?

If you have a business, you have undoubtedly heard about “The Cloud”. Your ERP, CRM, and any other line of business software provider probably has approached you about taking their application to “The Cloud”. These providers have also probably given you the 10 cent overview of cloud computing and all the benefits.

First, let’s define “The Cloud”: A software application hosted in “The Cloud” simply means that the application is hosted on the software provider’s servers and accessed by your users via the internet. This means you do not have to purchase server hardware in order to use the software application. Instead, you pay a monthly fee usually based on the number of users that access the software.

Benefits of “The Cloud”

  • Low capital expense to implement/use line of business applications. There is no server hardware/software to buy. Also, there is no need for a data protection solution in place for a cloud application.

  • Access from anywhere on any device. Your software login is usually good to go anywhere there is an internet connection and can be accessed from any computer/tablet/phone.

  • Software upgrades are usually very easy and seamless as the software provider handles them for you.

Potential Pitfalls of "The Cloud"

  • You are completely reliant on your internet connection in order to use a cloud hosted application. If your internet is down, you are dead in the water. Many companies that use cloud hosted solutions put in place a redundant internet connection (two separate providers). The cost for the second internet service and hardware to manage both connections can eat up the savings you got upfront by not buying server hardware/software.

  • Most Cloud application providers have extensive security measures in place. With breaches happening at many large providers, we know that there is no measure of security that is 100% foolproof. Hackers will target large providers with lots of data because it’s more bang for their effort. This means your data may be more secure if housed in your establishment.

  • Pricing for a Cloud application takes into account the overhead for the provider’s cost to present the application to you. They have hardware, security, and manpower behind the application and still need to make a profit. Although the initial cost of ownership is low, the monthly/yearly cost over time may be more expensive than hosting the application yourself.

  • A big question that has come up with Cloud applications is regarding the ownership of company data. If you want to change software providers, you may not be able to get your data back in a form that will import into the new system.

  • While some Cloud providers have excellent technical support, others can leave you in the cold.

Questions to Ask Your Cloud Application Provider

  • How much downtime in the last 3 years?

  • Is there compensation in the form of credits for downtime and lost revenue?

  • What are the terms of the contract and do you offer price protection?

  • What is the process for software upgrades and how do they affect my business?

  • What is your disaster recovery plan?

  • What is your Service Level Agreement (SLA)?How do I get my data back?


Taking your software application to “The Cloud” may be a great idea. It’s also a great idea to make sure your decision is in line with your expectations of business continuity, security, & productivity.


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