Right now, thousands of South African businesses are facing the same challenge – to upgrade technical infrastructure on the basis of long-term capital investment or to embrace emerging hosted solutions and view IT as an ongoing operating cost.
Each has its own benefits and challenges. Technical equipment, whilst sometimes costly, is highly secure and affords a level of control that is scarcely available elsewhere. Although housing mission critical information onsite may require a greater initial investment, it certainly guarantees business owners and executives piece of mind.
On the other hand, cloud based offerings can boost flexibility and agility within the workplace. By provisioning software and services according to need via a subscription service organisations have the option to allocate surplus capital towards new growth avenues.
Although contemporary cloud services may appear to be an obvious choice, relieving the enterprise of the need to operate and maintain hardware, this path can often be strewn with unexpected obstacles.
The first is cost.
Popular hosted offerings are often advertised at low rates to attract executives seeking affordable solutions to common business problems. At a fraction of the price of a server and its supporting infrastructure, the cloud can appear to be an ideal route for small business owners.
Regrettably, many cloud-based services are also accompanied by implementation and maintenance costs which are seldom explained during initial discussions. These fees are often levied at the last possible moment, leaving the customer with a significantly larger bill and few options.
The second is data security.
Unlike the financial or insurance industries, the cloud environment is highly unregulated. As a result, many services of this nature do not incur any responsibility in the event of data loss, leakage or outage. Cloud service providers are also not required to conduct formal investigations into security threats or breaches.
The risk is amplified when geographical location is taken into account. The vast majority of hosted services are not required to disclose where customer information is stored, or the which redundancy measures are in place.
Finally, the innovative nature of this industry has resulted in a relatively immature environment. As such, we are yet to see how customer data will be relocated in the event of supplier bankruptcy or insolvency.
As a result, hosting sensitive corporate information can be a gamble for businesses seeking to earn short-term gain by reducing costs. The requirements associated with the incoming Protection of Personal Information act (POPi) should also be an important consideration here.
Ultimately, when investigating cloud services executives should apply a simple rule of thumb – if it’s critical to your bottom line, keep it internal.