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Summer 2012
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Cloud Computing: Is it Time?

Even the federal government has climbed on the cloud-computing bandwagon.



You’ve heard the buzz about cloud computing—and the buzz is getting louder. Is it time you made the transition?
 
The federal government generally lags industry in adapting new technology, so it was particularly noteworthy when Federal CIO Vivek Kundra issued this recent directive in a “25-Point Plan for IT Reform.” The publication reads: “Beginning immediately, the Federal Government will shift to a cloud first policy.” The Office of Management and Budget now requires all federal agencies to default to cloud-based solutions “whenever a secure, reliable, cloud option exists.”
 
It’s time to take notice when the government adopts a game-changing technology you are not using. Cloud computing could be described as on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications and services) provided by third-party service providers, which require minimal management time, effort, and expense to utilize. In other words, you don’t have to be in the IT business anymore.
 
With cloud computing, the consumer of these services can unilaterally provision computing capabilities, such as server time and network storage, on an as-needed basis. These capabilities are available over the Internet and accessed through readily available Internet access devices such as PCs, mobile phones, laptops and PDAs. The provider’s computing resources are pooled to serve multiple consumers, providing economies of scale and placing the IT support on the provider of the services instead of the user. This makes possible “Software as a Service” (SaaS), whereby the consumer uses the provider’s software running on a cloud infrastructure, requiring that the consumer only provide a way to access the Internet. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, backup, security or software, freeing up valuable management and employee time to concentrate on their core business.
 
How does this apply to metal service centers? Bruce Olsen, president of Progressive Alloy Steels Unlimited, Hartsville, S.C., made the leap to cloud computing five years ago when he decided to run Progressive’s sales, engineering, warehouse, shipping, receiving and marketing operations from an integrated Web Application Service known as onTRAK™ Metals. Progressive needs no in-house IT capability, no servers, and no periodic software upgrades, which not only saves money, but allows Olsen and his staff to focus on selling steel. Customers have told Olsen he is “light years” ahead of his competition with his software capabilities.
 
How much does this game-changing technology cost? Generally, the initial cost of implementing SaaS is lower than purchasing a client server software package, and the ongoing subscription fee is lower than the cost of maintaining the hardware, IT support and periodic software upgrades associated with a traditional client server approach. According to Gartner, a global IT research firm, “the annual cost to own and manage traditional software applications can be up to four times the cost of the initial purchase. As a result, companies end up spending more than 75 percent of their total IT budget just on maintaining and running existing systems and software infrastructure.”
 
In addition, “software and hardware costs are well understood, but the people resources associated with traditional software applications are often underestimated or omitted in a total cost of ownership (TCO) analysis.”
 
The cost of SaaS is simple: the initial setup fee plus the subscription fee. Going forward, cloud computing may in the long run cost less than the TCO of continuing to operate the system you have in place.
Cloud computing is not only here today, but here to stay. The advantages are just too great for it not to become the dominant way of acquiring enterprise software. This is particularly true for small to medium-sized companies that don’t have the IT resources to compete with larger companies. The only way to know if SaaS is right for your company is to review some cloud-based packages. One word of caution, make sure they are truly web-enabled and that all you have to provide is any PC or laptop with access to the Internet. Many packages tout themselves as web-based, and it may be true that you utilize the Internet, but they require special setups and software loaded on your web device. If you cannot go down to the hotel business center where you are staying and use the hotel’s computer to log on to your software and start conducting business, then it is not truly web-enabled.
 
In order to utilize the explosion in new web-enabled tools coming out every day, you must be operating on a cloud-based platform. “Get Connected” has never been more important than now, so check out the cloud and see how it can help you more effectively serve your customers and maintain control of your business.

[Cloud computing is not only here today, but here to stay. The advantages are just too great for it not to become the dominant way of acquiring enterprise software.]
 
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. For more information, visit www.ontrak.com.

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Friday, July 25, 2014