Cloud computing: The 5 selection criteria for companies

How companies and startups can benefit from cloud services

Cloud computing allows various IT services to be handled externally. If an organization uses a cloud, the company’s own servers do not provide the IT services, but one or more external data centers (cloud) take over these tasks. But what needs to be considered when companies want to move their IT to the “computing cloud”?

IT services such as computing power, storage space or infrastructure are provided in a cloud. Companies using cloud computing can dispense with local servers or use them for special processes in parallel with cloud operation (hybrid solution). These services are obtained via a network connection with sufficiently high bandwidth. On the hardware side, the company only needs the network components required for local operation, such as routers, WLAN access points and firewalls, as well as end devices such as notebooks, smartphones, tablets, desktop computers or thin clients. These are used as pure access terminals. They provide visualization of the data on the screen and serve as an interface between the users (employees, customers, suppliers) and the cloud. The use of cloud computing opens up a whole range of opportunities for SMEs in particular.

Cloud computing opportunities

Fast availability and flexibility of cloud services

Cloud services are also referred to as “on-demand computing”. This is in view of the fact that an SME only obtains those cloud resources that it requires in a specific period of time. Depending on the company’s business model, short-term or seasonal peaks in demand arise, for which additional computing power or storage capacity can be called up flexibly and quickly via the cloud.

Reduced IT investments, cost benefits, planning security

With conventional in-house IT solutions with their own servers, the hardware must be dimensioned so that it is sufficient for the company’s maximum needs, even if only a fraction of the capacity is used most of the time. In addition, there are ongoing costs for licenses, support, repairs, spare parts, energy requirements and premises (server room) as well as for the constant renewal of the infrastructure. These maintenance costs, which cannot be precisely predicted, are eliminated when cloud solutions are used: with the cloud model, billing is based on a monthly flat rate, which depends on the individual needs of the SME. Companies can thus achieve cost advantages and at the same time plan IT expenditure reliably and predictably. In addition, there is no need to invest in their own IT infrastructure and the server rooms that are not required free up space for additional workstations.

Increased productivity

A cloud solution can increase productivity in companies. By enabling IT processes to be run in parallel in the cloud with multiple virtual servers, computing speed is accelerated many times over. This significantly reduces computing and waiting time in the company.

Global availability of services and data

With the cloud, corporate data and the services of the IT infrastructure are globally available at any location with network access.

The use of cloud services can bring about greater efficiency and flexibility in IT not only in large corporations, but also in SMEs. However, special attention must be paid to the selection criteria of the suitable cloud infrastructure.

5 criteria for choosing the right cloud:

1. Cloud services required

Some cloud providers cover only individual aspects of the cloud functional scope, while others offer the complete cloud portfolio including IT infrastructure services such as network services or virtual server services in their range of services. Certain providers provide additional applications such as online accounting, online customer relationship management (CRM) or office programs. Other cloud service providers, in turn, specialize in storing data such as documents, photos or videos. If the company knows what IT services it needs, an initial narrowing down of the providers in question can be made.

2. Cloud services security

If critical company data falls into the wrong hands or customer information is not sufficiently secured, this can have a serious impact on the company. If an SME relies on a cloud provider, it is dependent on its security concept. For this reason, the security of the cloud services is of great importance: the provider must be able to reliably exclude risks that lead to failures, performance losses, data loss or data theft. Effective security measures such as up-to-date anti-virus systems and firewalls are just as much a part of a professional cloud computing solution as encryption, secure authentication mechanisms and regular security audits.To evaluate the online security of a cloud provider, it must be able to conclusively demonstrate its security concept. It must disclose who has access to the cloud data, what control mechanisms exist, how cybercrime is prevented and what backup procedures are in place. A professional cloud service provider must be able to offer effective protection against natural hazards such as floods, fire, storms, burglary, earthquakes and theft. The respective locations of data storage (redundant storage at different geographical locations) and the physical security of the servers play an important role here. In Switzerland, clarifications must also be made around the financial creditworthiness of the cloud service provider: the insolvency of a Swiss cloud service provider will result in the suspension of all business activities from day one. In such a case, access to applications or data of the SME can be blocked for weeks or months.

3. Uptime of the cloud services (performance readiness)

The uptime (availability over time) of a cloud provides information about the guaranteed complete operational readiness of the services. The uptime requirements of the services can vary greatly depending on the business model of the respective company. While 99 percent availability is sufficient for many organizations, critical applications require uptime between 99.95 and close to 100 percent – such as for certain financial transactions or in medical care. While an uptime of 99 percent allows downtime totaling up to 88 hours per year, or almost four days (!), the maximum tolerated downtime with an uptime of 99.95 percent is only 4.4 hours per year. The cloud provider must be able to meet the company’s availability requirements and guarantee this in a written service level agreement (SLA).

4. Portability of data between different clouds

The company that obtains the cloud services should always have the ownership rights to the data stored or processed in the cloud. This includes the right to take the data with it (port) within a reasonable time when changing the cloud service provider. After porting and the end of the cloud contract, the previous provider must delete all data on its systems. It is essential to pay attention to the contractual details in this context.

5. Extensibility of cloud services

When choosing a cloud provider, it is important to check whether it is able to flexibly adapt its services to the needs of the SME. With the success and growth of a company, the demands on the IT infrastructure and thus on the performance of the cloud also increase. Therefore, it must be clarified which additional capacities and performance values can be provided by the cloud provider in what timeframe and at what cost. It should also be possible for the company itself to add further users quickly and in a user-friendly manner. Only a cloud service provider with easily scalable services can sustainably meet the IT requirements of a company.

Concluding remarks

The service offering of the cloud provider can be comprehensively checked according to the criteria described, such as service scope, security, availability, portability and scalability. Another aspect is the importance of data protection for the company: depending on the geographical location of the cloud service provider’s data storage, different data protection laws apply – these are significantly stricter in Switzerland or the EU, for example, than in the USA. Here, too, the company’s own business model and the associated sensitivity of the data are always decisive.

If a cloud service provider meets all the requirements placed on it, it is also worth obtaining reference information from existing corporate customers with similar business models to your own company. If this feedback is positive, there is nothing standing in the way of concluding a contract. Competent partners for managed IT services also offer support in the selection process.

Author: Philipp Hollerer

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