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As businesses are increasingly attracted to cloud computing, it’s necessary to clarify what portion of the cloud is of interest to a particular audience, a cloud service provider says.
“For the small to medium business, there are generally two areas of relevance in the evolution of IT services to the cloud,” Todd Benjamin, vice president of enterprise hosting for the company Hostway, says. “The first is the application layer, commonly referred to as ‘Software as a Service’—SaaS. The second is the infrastructure layer, known as ‘Infrastructure as a Service’ or ‘IaaS’.”
Many small to medium businesses are benefiting from the proliferation of options in SaaS, he added. A few of the myriad software-as-a-service applications available to SMBs are accounting, customer relationship management, human resources, and Internet marketing.
Benefits of these SaaS applications include:
- Little or no startup or license costs
- Pay-for-usage models that can be scaled up or down
- No long-term contractsThe calculation of the beta involves a lot of statistics. It uses covariance of the return that the security will offer and the benchmark return over a set time period. The R-squared value is the percentage of the historical price movement of any security.
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- No capital outlays for servers and other infrastructure to run the applications
- Reduced or zero administrative personnel required to keep the applications running through updates, monitoring, fixes and enhancements.
Once an SMB decides to utilize one or more applications in the cloud, it could benefit from guidance on selecting a cloud application provider. Benjamin offers these tips for choosing the right one.
Learn about the reputation of the SaaS provider. A first step for a company is to get a good sense of the SaaS provider’s reputation. Use reliable sources; many well-respected blogs and review sites offer feedback on the provider’s overall reputation in the marketplace. To get a complete picture, companies should answer key concerns while doing their due diligence on providers:
Weigh the importance of the application to the critical functions of the business. An application that submits internal expense reports probably will tolerate some system downtime better than an application that processes credit cards for customers and must be functioning to ensure the health of the business. Consider the impact of downtime (planned or unplanned) on your cash flow. The more critical an application, the more a business should think about the reliability of the provider, and plan for what it will do if the application became unavailable.
Don’t assume that any provider that uses the cloud is inherently reliable. You should ask a potential provider several questions to gauge its overall reliability and its aptitude at handling problems. You should discover the following:
- Will your application run on geographically redundant systems or a single data center? A provider should engage in load balancing to handle requests on multiple servers.
- What is the provider’s backup and recovery strategy? Make sure it is reasonable and prioritizes security and uptime.
Read the fine print. SMBs looking to take advantage of IaaS need to carefully see their commitment to the provider. Instead of running on servers on their own premises, applications would run in the cloud and be managed by a third-party cloud provider. As with any purchase, due diligence should be performed to ensure that both parties understand what is being offered and at what cost. Carefully review the billing structure. If based on usage, the SMB should compare estimated usage costs to its current costs. Be sure to pay special attention to hourly costs, which can add up quickly when service is needed all day and night.
How friendly (and functional) is the user interface? What is the overall user experience like, and how does it vary from provider to provider?
How will the provider relate to you? Will somebody within the company “own” the service? Ask who will do the planning, implementation and ongoing evaluation of the results of IaaS integration. Acquire details on data backup procedures, including how often backups are performed, whether the SMB initiates backups, and how the data is retrieved. Learn about each server’s redundancy and ask for details and related costs about the restoration process.
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