Everyone is talking about Cloud computing. Put things up on The Cloud. SMBs save money by moving to The Cloud. The Cloud is not everything its cracked up to be though, as one of the biggest cloud providers has recently shown.

Before we get into the heart of this op/ed type piece (I do try to use facts, but the thoughts are my own), let us take a basic look at what cloud computing is generally being marketed as. The basic idea is that you remove the server from your location, put it on the Internet through a secure host (the biggest names hosting are Microsoft, Amazon and Google), therefor giving you the ability to work from anywhere, not have to worry about server maintenance, or having an IT department( there are other aspects such as MSPs, Backup to remote data centers, and more that do not apply to this article). To quote the movie Murder by Death, “Interesting theory, one small problem. Is stupid, is most stupid theory I ever heard!”

Why is it so stupid (In my opinion). For a few reasons. First and foremost is security. Take a look at the recent problems with Google and China and you will see what I mean. The hacking, the lack of being able to harden a server yourself (or letting an IT company you can hold responsible), the lack of control. Take a look at what is going on through some of the security sites, not just the small spattering you hear from mainstream media(which will not always tell you the full story due to corporate connections). Now you might say, but I’m small why would someone want to hack me, and that is not the reason you would be hacked. It could be a side effect of being hosted on a much more visible target (again, Google, Microsoft, Amazon etc…).

Once you get past the security aspect, you run into, what happens to your data overall. Who owns it? If you got out of business, does it get destroyed properly? What if you decide to move off the cloud to a local server, does the hosting company have to keep copies of your data due to regulations? A lot of those types of issues are easily solved through contracts, but are you reading through the contract properly. From personal experience with Off-Site backups, the company I work for and our partners put in writing that the data is our clients, and if they want it destroyed due to changing services, going out of business etc… we can do that. This is just data backup though. What about when your whole server is up there?

Finally the reason the cloud is not ready for prime time is infrastructure. Mostly ISP speeds and costs. think about it, you start saving money by bringing your server up to the cloud, but find that access times to files, to e-mails, is extremely slow, and that cuts down on your productivity. The fastest you can go is going to be the slowest link in the chain.

Most businesses are still working off the T1 assumption. A T1 is 1.5Mbp downstream and upstream. This really is not a lot compared to the sizes of files, amount of data being transmitted, and other small factors such as number of people sharing that line. If you are on the cloud, you no longer have just e-mail constantly streaming in, but authentication protocols, Active Directory communications (if its a Microsoft server), Word documents, Quickbooks data (if needed) and much more. Think of it this way, the average home Internet speed is 12Mbp down, 1.5 Mbp up. Faster on the downstream, same on the upstream, which would be your clog. A T1 averages $500-$1000 per month. Home Internet costs around $30-$70 per month but does not have the Quality of service needed to be reliable for could computing. Fiber Internet is the solution (60+Mbp down and up for $1000=$1500 per month right now), but availability of it is spotty at best. Until this bottleneck is fixed, no matter how secure it might be, or guarantees about the data ownership are resolved, I cannot recommend could computing.

The biggest thing to realize is that there is give and take in everything. To really come up with savings, you have to figure in items such as security, lost time due to connectivity, plus you still need someone to be able to take care of your local PCs. A good local IT consultant in the long run is still a better option for most SMBs. A Managed Service Plan with a local IT firm is probably the best, cause its a one low cost solution that covers most everything, and you can budget for because the cost is locked in for the length of the contract. Think about that before you go cloud hopping.