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Summer 2011
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Break the Chain that Anchors You to Your PC

With cloud computing, you are only an Internet connection away from the latest software technology.

Sam Palmisano, the chief executive of IBM, said in an interview with Forbes Magazine (June 27, 2011): “Back in 2002, we said the PC era was dead—it will move in the direction of RFID tags, smartphones, those sorts of things. It wasn’t gonna be the PC. We also saw that the infrastructure would have to be horizontal, scalable and secure—let’s call that the smart cloud.” Ontrak Software LLC and its predecessor companies were offering cloud-computing products and services five years prior to that, since our first U.S. Air Force project in 1997. So, while you may think that “cloud computing” is new, it is not.

What do we mean by cloud computing. A recent Wall Street Journal article (Dec 30, 2010) offered this definition: “Cloud computing refers to any service that operates over an Internet connection, allowing immediate access from any computer or mobile device with web access. Business owners can access software or store information…and leave the technical maintenance to the cloud provider.” They further state that the trend is for the smallest of companies to move to this business model to provide affordability and flexibility.

A practical application of this technology is known as “Software as a Service” or SaaS, whereby companies access software programs through the web rather than on their local computer. This makes expensive software affordable to small firms and frees up the resources of the company to concentrate on its core business, instead of trying to maintain in-house IT capability. There is wisdom in the Shakey’s Pizza slogan: “Shakey’s made a deal with the bank—Shakey’s don’t make no loans and the bank don’t make no pizzas.” Imagine that your only IT concern was to have available any mobile device (PC, laptop, smartphone, tablet) with an Internet connection. That’s it. That is what SaaS can do.

So, why hasn’t everybody switched? Why are most small companies still chained to their PCs and servers? First, it is generally easier to just continue doing what you have been doing for years, even if it is not the most efficient way to do business. Sam Palmisano states that the founders of IBM, the Watsons, believed that every decade or so you had to reinvent the company and drive to the future. That is the only way IBM moved from selling typewriters and punch cards to mainframe computers to PCs—and now to cloud computing and services. Similarly, small to medium metal service centers need to reinvent the way they do business to take advantage of the current mobile technology and how this technology can be used to access sophisticated software. It is a scary step, but one that is not as difficult as generally imagined if you find the right SaaS package to fit your business. Once through the transition, you may be amazed that you were able to be successful using the old methods of quoting, tracking, keeping up with orders, inventory control, shipping, accounts receivable, accounts payable, customer interaction, and all the other aspects of managing your business. Also, the transition forces you to clean up and update your data, which in itself positions you for greater efficiency and success.

What other attitudes keep you chained to your PC? The ones most often cited are: security, fear of loss of data and loss of control, and costs. The basis of these fears is generally a lack of information and understanding of the modern, interlinked computing world. This fear is fed by those with a vested interest in keeping you chained to your PC and to their software or their IT services. Companies with the expertise to develop sophisticated SaaS software have a deep understanding of security issues far exceeding companies whose focus is on conducting a commercial business enterprise. The owner or general employee of a service center cannot be expected to keep up to date with the continually evolving IT security area, but the provider of SaaS has to be, to protect not only his customers but also himself. For example, in addition to keeping the latest software security protection tools in place, ontrak uses the same encryption technology employed by financial institutions. So if you feel comfortable doing your banking on line, then you should feel comfortable using the software on line.

Fear of loss of data is another excuse often cited for local servers. But, in reality, is your data both secure and backed up regularly and automatically? Most SaaS companies back up data hourly and daily, and even remotely. How many companies have good intentions to do this, but fail to implement the plan, leaving them vulnerable? Do you, as our company does, have two weeks of propane available to fuel on-site generators in case of a power outage, or are you out of business until power is restored? Using SaaS, if your laptop batteries are charged and you have an air-card, you are still in business. Once you examine the issues, you will see that having your software and data on site may not be the safest way to do
business.

Then there is always the matter of costs. The cost of SaaS is pretty simple. It typically consists of an upfront charge for setup and then a monthly subscription fee, for which you get all the software, hardware, backup and support (make sure future upgrades are included). You need only have a device with Internet access. For on-site software, the calculation is more complicated. In addition to the cost of the software, service centers must pay for hardware, periodic updates, space considerations, power and both in-house and outside IT support to keep everything running.

Is it time for you to break the chain and move into the modern way of doing business? There will never be a painless transition, and it will probably be easier the sooner you make the move. Using cloud-based software allows you to integrate your business with current and future technology tools, as they become available. Think of the changes that have occurred in computing and communications over the past five years. This trend is accelerating, not slowing, and the companies of tomorrow are positioning themselves to utilize these technologies. Companies that don’t will find themselves competing with more nimble competitors who are using the more flexible, accessible and sophisticated tools available on the web.

Editor’s note: This article was contributed by the experts at Ontrak Software.

Ontrak Software LLC, Florence, S.C., offers ontrak, a fully integrated inventory control, sales and purchasing program for metals service centers, available in a SaaS version. For more information, visit www.ontrak.com.

  
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