What cloud computing and social media tools bring to corporate Canada

Your business IT needs are taken care of: you have e-mail, a Web site, applications for document management and everything else you need, right? In fact, there’s a big room full of humming servers and structured cabling to take care of that, overseen by the IT team. So what’s all this talk about cloud computing, a catch-all phrase for an IT environment in which applications and even corporate data reside on remote servers and are delivered over the Internet. And why would a company need—or even want—to relinquish ownership and control over hardware, software and services? Why indeed. Mention what is arguably the world’s best-known online environment—Facebook—to most business decision makers and they’ll cringe and declare that such approaches have no place in the workplace.

But while Facebook, Wikipedia and other online services that cater to individuals may not be the foundation upon which to build a corporate IT strategy, the principles behind these services can improve the very elements that many worry about when they contemplate jumping to the cloud. Done right, these approaches can boost productivity, provide superior data management and enhance corporate data security.

To clear away some of the fog surrounding the relationship between social media tools, cloud computing and the corporate environment, Backbone asked three Canadian experts for their observations. Their forecast? The clouds on the horizon are headed for Canadian businesses this year, accelerated by demand from the newest recruits to the workforce: the Digital Natives who have grown up with, and have grown to depend upon, cloud computing.

Here are six things you need to know about cloud computing to be prepared.

1 Businesses will be under increasing pressure to embrace cloud computing

Much of this pressure is going to come from within, from Digital Natives—those under 30—who are now entering the workforce. “They are very accustomed to having these high-productivity tools—they’re used to Hotmail and Gmail, which are completely in the cloud and can be accessed from any device, in any location—and they express a great deal of frustration as to why these tools are not available to them within the organization they’ve joined,” said Tom Jenkins, executive chairman and chief strategy officer of Open Text and author of Managing Content in the Cloud. “That’s actually why I wrote the book. It was becoming clear to me that once again we were starting in business to get overwhelmed by nomenclature and by all the supposedly new applications coming out, and it’s always good to just sit down and demystify things—like the cloud and social networking—for people who perhaps didn’t grow up with it, yet still have to make decisions that their organizations count on.”

2 Cloud computing is not Facebook. Or Twitter. Or Wikipedia

These services are often cited as examples when explaining cloud computing. That’s both good and bad.

On the positive side, “social media applications are great examples of cloud computing because they demonstrate scale and speed—they underscore that the tools available with cloud computing enable one to deliver all kinds of applications,” said Strahan McCarten, director of product management, hosting and data centre services for Bell.

But with that awareness comes disdain: in a 2009 study in which business executives were asked to react to the term “social media,” top responses included phrases such as “no business value,” “distracting” and “waste of time.”

“There were some other words—social, interaction, blog, networking—but overwhelmingly it was the idea that these were consumer-based products and that they weren’t necessarily adding value in the workplace,” said Krista Napier, senior analyst, Canadian emerging technology, at IDC Canada, which conducted the survey.

But Napier is quick to add that in the year since that survey, the picture has changed. “We’ve seen that businesses are diving in, they’re getting their feet wet in terms of playing around with social media tools.” Today, “more than 50 per cent of Canadian organizations are using social media for recruiting employees, about 45 per cent are using it to interact with customers and about 40 per cent are using it as an information source when making ICT purchase decisions.”

3 Cloud computing delivers benefits to companies

Benefits vary depending upon the business, but here are three common examples:

Better document management: Think about a team collaborating to create a document. E-mail works fine if there are only a few people on the team, but when that turns into a dozen or a few dozen, e-mail becomes unworkable. “Every person who makes a modification then has to e-mail everybody else: it’s madness,” Jenkins said. The solution is a cloud-based document management system. “It works like a library: we can check out the document electronically, work on it and then put it back. And if someone else has checked out another version, the system will reconcile the two versions and merge them, so we can compare the edits.”

Increased security: Using cloud-based workspaces can actually increase security by controlling access to information and reducing human error. Napier cited e-mailing documents as an example. “Law firms, for example, send a lot of files back and forth through e-mail, but if someone accidentally enters the wrong address that e-mail can go to a person it was not supposed to, and that’s a security concern. If the firm uses a collaborative tool instead, people would have to sign in online to a collaborative space where all those files would live, so the law firm is not sending out e-mails anymore but inviting people into this space, and everybody would need a security code to get in.”

More efficient use of IT resources: Ask any IT department head and you’ll hear that each year they’re asked to do more, yet keep within a limited budget. Cloud computing can be a real help in two key ways, said Bell’s McCarten. “One is (the ability to) get out of the business of managing largely commercial, well understood, broadly used applications. E-mail is number one, right at the top of the list,” he said. “The other is to bring more flexibility to back-end IT systems to deliver applications that can scale and grow dynamically, so departments no longer have to plan and forecast, which is a fairly difficult thing to do.”

4 Cloud computing is not infallible

Just as there are benefits, there are also potential hazards with cloud computing of which companies must be aware. Tech types tend to talk about IT in terms of solutions, but cloud computing is a tool like any other, and it can cause pain if it’s not used properly. Here’s some advice to help avoid injury:

Listen to your elders: With their social-media familiarity, Digital Natives may be most comfortable with cloud-based services. But Jenkins said more experienced hands in the business are the ones who will minimize the chances of something going wrong. “If someone is a rookie stock trader and knows how to use social networking tools, that just means he or she can get into trouble faster than the previous generation that had to use the phone and fax,” he said. “An organization has to take on board some of the new stuff but it also needs veterans to take that stuff and shape it so that it makes sense in that organization. There’s a balance to everything.”

Don’t give away the strategic assets: While off-the-shelf applications like e-mail are ideal candidates for outsourcing to a cloud provider, McCarten said some systems are better left in-house. “Increasingly across companies of all sizes we’re seeing a conversation in which people are asking themselves if their strategic competitive advantage stems from a particular IT system,” he said. “If it does, then they really want to own it, control it, manage it and pay a great deal of attention to it.”

Add some analytics horsepower: While Canadian companies are embracing social media for recruiting and other activities, Napier said very few are tracking the value associated with their social media activities. “They’re not looking at how their social media activities contribute to their KPIs or their bottom line: only 16 per cent of Canadian businesses in 2010 had adopted social media networking analytics tools, even though more than half of them are using the tools. Without these tools, “they don’t know what they’re doing.”

5 A well-thought-out implementation strategy can boost chances of success

As with any technology, some companies will have more success than others in integrating cloud computing into their organizations. But there are some strategies that will increase one’s chances of a successful implementation.

Start small: Larger companies can’t roll out cloud computing across the entire enterprise, but Napier said individual departments can often adopt social media tools. “These are generally cloud-based so they’re not too expensive,” she said. “And they can add a lot to a specific department. The success of that department can then be used to roll out the solutions throughout the company.”

Work with those who will use it: McCarten said IT departments should work with end users to determine the services and features offered, particularly with respect to cloud-based collaboration tools. “Ultimately the users, and their experience, are going to dictate how effective these tools are.”

6 Almost every company can benefit from some clouds in their forecast

It’s rare to find a company or a sector that cannot benefit from cloud computing tools. McCarten said even heavily regulated sectors like banking and insurance are finding ways. “They are very sophisticated IT buyers and they’re looking to bring some of the functionality that’s available in cloud computing into their own, internal data centre.”

Companies that do deploy cloud computing tools may be surprised at how effective they can be, particularly social media tools, as a way to reach customers. Napier said a year ago, computer giant Dell announced it had generated US$6.5 million in revenue via its presence on Twitter. “A lot of people question the real business value of these tools, but I think when we see a company reporting those numbers it’s pretty significant.”

Jenkins offers a timeless piece of advice to any company worried about adopting cloud computing, or any new technology: this is not the first technology change businesses have had to tackle. “In many ways, this is not rocket science. We just go from our past experiences of how we have adopted technologies previously.”

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Illustration: Jon Berkeley

Also in this issue:
Are you using cloud computing? 
Steam Whistle nets significant savings by moving to cloud-based solution 
Better, faster, stronger: Productivity gains edge out cost as key cloud benefit
Cloud Computing Supplement: Soaring upwards with cloud communications
VoIP Supplement: Moving to modern cloud-based communications 

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