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Cloud Computing 101

Understanding remote access and storage options

In either case, users are able to access applications remotely, while storing data with confidence that both the programs and information are safe. In both scenarios, however, Walborn says end-users must stay vigilant about what’s happening with their systems.

Sky High Applications
The number of common business applications available in the cloud is extensive, including email and office suites, QuickBooks, Famous, Lotpath, Harvest-Mark, ProducePro, SharePoint, Yammer, and various customer relationship management platforms.

“Currently, we’re hosting Outlook email, calendar, and tasks,” says Peter Townsend, IT director for The Nunes Company, headquartered in Salinas, CA. “We are also deploying PTI case labeling, essentially a cloud application.”

Further, for field operations, Nunes has document and image file sharing, and has been “tapping into the cloud for pesticide and material safety labels and data sheets.” Townsend says the company also leverages cloud-hosted web filtering services, like website blocking.

The cloud is also central to Ben B. Schwartz & Sons, Inc.’s backup strategy and continues to evolve, says Kyle Stone, who is in charge of food safety and technology for the Detroit-based wholesaler. “We use [the cloud] for the ProducePro software that runs our whole company, from inventory to accounts receivable to generating invoices.”

In addition, the cloud maintains the company’s entire recordkeeping and data entry system for orders, as well as Google Docs for price lists.

Return On Investment
Comparing the return on investment for cloud-based services, however, can be complicated depending on the size of the company, the number of users and offices, the number of applications, and many other variables.

“With the cloud, you have all the costs of software, hardware, network, data center maintenance, etc., baked into one monthly subscription cost,” notes Robert Froelich, a consultant for Software Licensing Advisors of St. Charles, IL, a western suburb of Chicago.

“Merging of all those costs into one line item makes detailed analysis a bit more difficult,” Froelich continues. “While companies think it will be far simpler to just pay a monthly bill for cloud services versus managing the costs and many moving parts of a sophisticated IT team and associated infrastructure, it’s tough to say because the transparency about what things cost or should cost isn’t really there.”

McCary of Zumasys provides some broad pricing ranges. To build a centralized in-house hardware and software operation for a small or medium-sized company could cost from $100,000 to $250,000—monthly leasing for a 30-person company would be from $6,000 to $8,000. And don’t forget the costs of maintaining equipment, what McCary likens to “a hamster wheel”—with computers usually lasting only three to five years before needing to be replaced.

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The future of information technology may well be cloudy for many produce companies, but in a good way. Cloud computing presents itself as a viable solution to crucial cost and accessibility issues, but a lack of understanding often makes this a nebulous proposition.

“Cloud computing” is the practical use of the Internet to store data on servers away from a company’s physical site. At its most basic, the cloud is the Internet, tracing its history to the earliest shared information sites, like the bulletin board system, the forerunner to the World Wide Web from the late 1970s to the early 1990s.

Today, companies can access applications and store data over the Internet with confidence. Cost efficiencies vary, though the greatest benefit may be for small and medium-sized firms with significant data and application needs but limited resources. Regardless of size, however, cloud services can remove a multitude of technology headaches from an operational standpoint.

“Many industries struggle to determine whether cloud computing is right for them,” explains Dave McCary, cloud solutions architect and manager of software sales at Zumasys, Inc. in Irvine, CA. This should not be the case with produce, however, since the technology can provide easy access to data from the office, on the road, or from the field or packing house.

Evolution: Rising To The Cloud
The modern iteration of cloud computing began with the development of Windows Terminal Server, which had the ability to connect applications from other locations. This was followed by the growth of Citrix server, and a decade later, the concept of running a business without onsite hardware and software was no longer far-fetched but becoming the norm.

According to a 2013 report by ChangeWave Research, 39 percent of its corporate respondents used cloud computing services, and 36 percent planned to increase cloud spending in the next six months. Consequently, many respondents also planned to decrease traditional information technology (IT) budgets and expenditures.

In rating cloud services for reliability and security (with ‘10’ being ‘very reliable’), the report’s mean score was 7, while security scored a 6 on the survey. When asked why their companies did not use the cloud, 42 percent of survey takers cited security concerns as most important, while 13 percent reported the complexity of integrating cloud services with their existing IT infrastructure.

Exploring Your Options
There are two major options for cloud computing, although it is possible to blend the two versions, according to Don Walborn, an industry consultant at Mount Dora, FL-based BP&SS Consulting. The first option, software-as-a-service (SaaS), has monthly fees which end-users pay to an application software provider (ASP), which takes care of the software and hardware, leaving the user responsible for minor issues, such as Internet connectivity, and local printer and monitor support.

The second option is for a company to actually buy the software and possibly the hardware, but to locate it in an offsite data center—often referred to as a “rack”—where basic necessities like redundant power, onsite Internet, air conditioning, and backup are provided.

In either case, users are able to access applications remotely, while storing data with confidence that both the programs and information are safe. In both scenarios, however, Walborn says end-users must stay vigilant about what’s happening with their systems.

Sky High Applications
The number of common business applications available in the cloud is extensive, including email and office suites, QuickBooks, Famous, Lotpath, Harvest-Mark, ProducePro, SharePoint, Yammer, and various customer relationship management platforms.

“Currently, we’re hosting Outlook email, calendar, and tasks,” says Peter Townsend, IT director for The Nunes Company, headquartered in Salinas, CA. “We are also deploying PTI case labeling, essentially a cloud application.”

Further, for field operations, Nunes has document and image file sharing, and has been “tapping into the cloud for pesticide and material safety labels and data sheets.” Townsend says the company also leverages cloud-hosted web filtering services, like website blocking.

The cloud is also central to Ben B. Schwartz & Sons, Inc.’s backup strategy and continues to evolve, says Kyle Stone, who is in charge of food safety and technology for the Detroit-based wholesaler. “We use [the cloud] for the ProducePro software that runs our whole company, from inventory to accounts receivable to generating invoices.”

In addition, the cloud maintains the company’s entire recordkeeping and data entry system for orders, as well as Google Docs for price lists.

Return On Investment
Comparing the return on investment for cloud-based services, however, can be complicated depending on the size of the company, the number of users and offices, the number of applications, and many other variables.

“With the cloud, you have all the costs of software, hardware, network, data center maintenance, etc., baked into one monthly subscription cost,” notes Robert Froelich, a consultant for Software Licensing Advisors of St. Charles, IL, a western suburb of Chicago.

“Merging of all those costs into one line item makes detailed analysis a bit more difficult,” Froelich continues. “While companies think it will be far simpler to just pay a monthly bill for cloud services versus managing the costs and many moving parts of a sophisticated IT team and associated infrastructure, it’s tough to say because the transparency about what things cost or should cost isn’t really there.”

McCary of Zumasys provides some broad pricing ranges. To build a centralized in-house hardware and software operation for a small or medium-sized company could cost from $100,000 to $250,000—monthly leasing for a 30-person company would be from $6,000 to $8,000. And don’t forget the costs of maintaining equipment, what McCary likens to “a hamster wheel”—with computers usually lasting only three to five years before needing to be replaced.

Uptime is a serious consideration as well, with an average of three to five days for server problems, McCary says. This becomes three to five minutes with a cloud service. But depending on a company’s needs and priorities, there can be negatives to cloud hardware and software services.

“Typically you’ll find that cloud computing will be least expensive in the short run,” Walborn cautions, but says users must realize they may not have the same kind of control or options like with their own software. He says produce companies should do a careful cost comparison.

Compared to leasing, Walborn asks, “How many months until you recoup your investment if you were to buy your hardware and software, and install and support it? Look at all the expenses involved in the total overall cost of ownership, then price it out to find your breakeven point.” If this comes in thirty months or less, owning rather than leasing may be less expensive.

Worth The Cost?
“To my mind, the cloud is valuable to businesses of all sizes,” notes Russell Perkins, managing director at Info-Commerce Group in Bala Cynwyd, PA. “It has particular value to small and medium-sized businesses because it moves both data and software applications out of their hands, so they don’t need the same level of IT support.”

Perkins feels it can also be advantageous from a pricing standpoint. “Rather than buying big expensive updates every couple of years, you pay a monthly fee, and always have the latest software at hand.” Again, this is good for smaller companies, but he contends it has proven “popular with big business as well.”

Peace of mind is a benefit cited by Chris Puentes, president of Interfresh, Inc. in Orange, CA. Interfresh uses a scalable “rental” or ASP model with “thin clients” on desks, consisting of a dock, monitor, keyboard, mouse, and Internet cable.

Further, the data center “is protected from earthquakes, power outages, etc., via multiple technologies,” Puentes says. “Our data is continually backed up to a separate remote location, so in the unlikely event there was a problem at the data center and our data was damaged or lost, we can quickly point our offices to another site and be up and running, with no loss of data.”

Another benefit is access. For Mike Dodson, president of Fresno-based consulting firm Lotpath, Inc., “There are two primary benefits of cloud-based software apps: one, remote employees and trading partners can access your company data without having to log into your network; and two, there is no software to install in your company network.”

Challenges and Pitfalls
The biggest challenge, as well as the biggest potential benefit to produce companies using the cloud, is Internet access in remote, rural locations. If Internet access is available, it solves many issues relating to data and communications. If it is not available, that location cannot be served by a cloud computing provider, or any kind of data connection.

Related to connectivity is bandwidth, notes McCary, as well as appropriate backup measures. “The downside to cloud computing is you must have an Internet connection to access your applications.” But just as important is “a backup Internet connection, a single connection is not sufficient. If it goes down, it shuts the company down.”

It’s also important to determine if your company is a proper candidate to use cloud computing. “If you’re a sub-ten user company just rocking it old school,” McCary asserts, “there’s no reason to put those apps in the cloud.” He says free service providers like Dropbox might be a better choice for limited service and capacity needs.

“Cloud computing is not for everybody,” Zumasys’ McCary concludes. “It’s for nearly everybody, but there are always exceptions.”

Final Thoughts
As with any business function, onsite or off, vigilance is mandatory.

Walborn emphasizes this caveat: “Running your applications in the cloud does not absolve you of technical responsibilities. Just because you’re using an ASP provider and have outsourced your applications, don’t take a hands-off approach. You still have to be proactive in your technology requirements.”

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