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Should a business be so dependent on the internet?

Facebook and Twitter are incredibly popular, and I know some of my friends appear to get withdrawal symptoms, of sorts, when the server of either is down. But this can happen with anything on...

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In the clouds

Facebook and Twitter are incredibly popular, and I know some of my friends appear to get withdrawal symptoms, of sorts, when the server of either is down. But this can happen with anything on the internet. Take, for example, if your favourite e-commerce store, such as e-bay or Amazon, were to go up the spout (hypothetically, of course).

Currently, a lot of small businesses are investing a lot of time and money now into a technology called "Cloud Computing". This is indeed a new technology, where scalable information technology capabilities can be provided as a service to multiple customers commonly using the internet (but also, much less commonly, completely locally.)

The market impact of Cloud Computing growth is staggering. The US analysts Gartner estimates that, over the course of the next five years, businesses will spend $112 billion cumulatively on Cloud Computing. What if a small business hosts services or products through a provider of cloud computing, and that provider has an unforeseeable technical glitch? The customer and supplier will first sign an agreement (the biggest suppliers at the moment are probably Amazon, Google and Microsoft).

This agreement (the "service level agreement") should address the parties’ responsibilities in case of a disaster that shuts down the provider's data centre, including the requirements for periodic tests in which the customer may want to participate. It has been argued that customers should not only be very familiar with the provider's disaster recovery plan, but also they should make their own arrangements for backup and disaster recovery if the provider's plans prove to be inadequate. Ideally, it is currently thought Cloud agreements should specify “backup schedules”, and customers should ensure that they are ‘contractually comfortable’ with the provider's backup policies and data recovery responsibilities.

However, even if the business is able to get the data or some compensation off the cloud provider, will that be enough to win back customers? With such a massive uptake of small businesses in the new Cloud technology, are these risks which managers need to forecast and budget for? Surely yes...

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Comments

22 March 2011

Shibley Rahman

every cloud has a silver lining

dreadful pun I know...

eek - shibley - you've reminded me i need to 'back-up' a lot of stuff stored on various google docs!

Kate Jillings

Shibley Rahman

Fabio, the interesting aspect to this is that businesses can seek to ensure that this is in the service-level agreement. At the moment, businesses may not necessarily be aware of their rights (if any) if the cloud service goes wrong. Either an astute business professional will either be on the look out for this in the agreement, or will seek legal advice which might be relatively very costly for a SME. Either way, at least the business professional is aware that there is a problem at all. Data backups constitute just one issue of a potential risk for cloud computing users. It wouldn't be such a big problem had it not been for the purported big uptake of cloud use by SMEs.

agree important to backup data store in the 'cloud' - every sensible business will do this