St. Louis Park-based Plus Relocation Services, which helps companies manage moving their employees from one location to another, is growing fast. So is the volume of the digital data it has to manage, which includes the names and addresses of customers’ employees.
It’s information that many cyber-thieves would love to get their hands on. So it might be surprising to discover that none of that data is under Plus Relocation’s control. Not directly, anyway.
Two years ago, the company, which has about 200 employees in four offices worldwide, began relocating all of its IT applications and infrastructure off its premises. At that time, Plus Relocation’s physical equipment was aging. “We would have to make a significant investment in hardware and all of the applications that run on top of it,” says Andy Kubitschek, Plus Relocation’s vice president of technology. “It was the right time to make that move.”
The cloud was that move. Cloud computing is the practice of using a network of remote internet servers—usually hosted by a third-party cloud services provider—to store, manage and process data and business applications. It’s a booming industry.
There are so-called “public clouds” that are easily accessible options offered by well-known brands such as Microsoft, Google, Amazon and Rackspace. Then there are “private clouds,” which are networks and data centers built and maintained by smaller providers.
The cloud boom reflects the technology changes that businesses have undergone, particularly in the past five years. Those include an explosion in data volume, the cybercrime wave, increased regulations and requirements for data privacy and security, the use of mobile devices by employees and the rising cost of maintaining an IT infrastructure. Yet cloud computing isn’t an approach that works for all companies. When weighing a shift to the cloud, businesses need to consider their particular needs and whether a cloud service provider can meet them.
When Plus Relocation moved to the cloud two years ago, it worked with Minneapolis-based Atomic Data, which provides a variety of IT services for large and midsize enterprises. Working with a cloud services provider helps make Plus Relocation’s IT “run better and more cost effectively and more efficiently than it was when it was in our closet,” Kubitschek says. “The amount of resources and expertise required for all of the different technology components is extremely hard to find and extremely hard to manage for a small but growing company,” he adds.
Many businesses have been taking the same cloud path as Plus Relocation. Spending on the cloud has grown at four-and-a-half times the rate of IT spending since 2009, according to Massachusetts-based market research company IDC. It predicts that the growth rate will be six times the overall rate from 2015 through 2020. Gartner Inc., a Connecticut-based technology market research firm, projects the worldwide cloud market will grow 18 percent this year—jumping from revenue of $209.2 billion in 2016 to $246.8 billion in 2017.
Cloud services providers point to several reasons for this sunny forecast. Moving to the cloud “gets a company out of the hardware and software business,” Atomic Data CEO Jim Wolford says. His company’s cloud services clients don’t want to manage IT infrastructure and hire IT people. That’s especially true of small and midsize firms, where finding and keeping qualified techies is an added burden in terms of time and money. It’s also challenging to keep up with technology, particularly as IT grows more complicated and the requirements for combatting cybersecurity become more intense.
For a monthly fee, a cloud provider can take on all of those burdens. Providers offer a pay-as-you-go model, says Patrick Gibson, co-owner and vice president of sales and marketing for Duluth-based Compudyne Inc. It provides managed IT services, including cloud management and migration, mostly to small and midsize enterprises. Consequently, Gibson says, companies don’t need to “overbuild” their systems with extra storage space, software licenses and so on.
The growing mobility of doing business has been another selling point for cloud conversion. “Employees are working in many locations these days—in the office, in the home, in branch offices, in airports, on planes,” Gibson notes. By having a cloud-based source for data and applications, employees can access data wherever they are, via whatever digital devices they use—smartphones, laptops, tablets or home computers.
With IT technology being so mobile, data is flying about everywhere. What’s more, it’s overwhelmingly abundant. “A big part of [the growth in cloud services] is that data is doubling almost every 18 months—sometimes even faster,” says Mike Crest, CEO of Eden Prairie-based Arcserve LLC, a cloud services provider that specializes in data protection and recovery. The cloud, Crest adds, is a very dynamic environment that is elastic in nature. “You can decrease or increase the amount of storage you have relatively easily,” he explains.
That abundance of data also is very sensitive—which has made many businesses wary of migrating part or all of their IT functions to an outside provider. “Security was probably one of the greatest inhibitors when you looked at the move to the cloud five to 10 years ago,” says Erica Antony, Arcserve’s vice president of product management. “Now cloud providers have a practice around it.” Cloud providers, particularly those that deliver private cloud services, also offer features such as encryption and user authentication. They also can access standards and compliance requirements that certain clients need to meet. “That’s usually far beyond what any business is going to be able to allocate,” Antony says.
Security is probably the No. 1 concern when Compudyne is working on moving a business to the cloud, Gibson says. Compudyne’s approach is to add “layers of security atop the cloud,” with options that include mobile encryption, two-factor identification, endpoint security, antivirus/anti-malware protections and firewalling. “We have anywhere from two to five different products that we’ll layer on top of the cloud—public or our cloud,” Gibson adds.
The protection products chosen depend on a client’s needs. In many instances, clients have to comply with security standards that are either required by their industry or by their own customers. Health care companies, for example, have to be in compliance with HIPAA (the Health Insurance Portability and Accountability Act) data privacy regulations—and be able to prove it. Other types of auditing that are frequently requested of businesses are the Service Organization Controls (SOC) series of reports, designed to provide assurance about a service company’s data security and related controls.
“There are a lot of audits being handed down from the Fortune 500 companies” to the smaller companies they work with, Wolford says. Those big firms are examining their smaller partners’ password policies, internal security (such as protective measures against ex-employees) and how financial data and payment information are shared. “They’re getting very deep and very widespread in the things that they’re looking at,” Wolford says. A cloud services provider should be able to supply the IT audits and compliance reports a business needs.
Whether a provider can meet requirements like these is something any business needs to consider carefully before choosing to move its IT functions into the cloud.
When working with clients contemplating moves to the cloud, Jonathan Dexter asks them about the types of features they currently are lacking. Dexter is a technology manager with the Nerdery, a Bloomington-based digital consultancy. For example, Dexter says, “The hardware that you purchased five years ago doesn’t have the power or scalability that the cloud offers.” The cloud can allow a company to flex how much computer power it is using. For instance, a retail business that needs a lot of space and power only during the holiday season can save money by “renting” space on the cloud for two months of the year, rather than maintaining excess capacity most months of the year.
If the cloud seems to make sense, the next consideration is choosing a public or private cloud offering. Public cloud services play an important role, Arcserve’s Crest says. His company leverages those clouds when customers select them. Arcserve also has its own cloud for customers looking for extra services and more control over their data. Arcserve’s Antony describes the company’s service as a “specialized cloud” that allows backup and disaster recovery from anywhere.
For businesses intrigued by cloud computing, providers suggest taking a close look at all the possibilities—including whether the cloud can actually be beneficial. “I love it when [potential customers] want to see everything,” Wolford says. “They want to actually see the generators run, see what happens in our data centers—when they totally kick the tires, and continue to do that.”
Gartner Inc. projects the worldwide cloud market will grow 18 percent this year.
If a company is going to off-load its IT functions and data, the business has to keep in touch with the cloud service provider. Wolford recommends vigilance, because he says the possibility exists that a provider may not have up-to-date hardware. “You have to make sure that they’re big enough and have the wherewithal to have a security team and a compliance team,” Wolford says. He stresses that the provider should offer proof that it’s been audited by an outside firm. That will ensure it is meeting data protection and other requirements.
Wolford also recommends talking with five to 10 of a potential vendor’s customers. “There are a lot of private cloud companies that are not here to stay, and are just riding the wave,” he says. Many, Wolford asserts, don’t take security and other policies and procedures seriously enough.
Compudyne’s Gibson says his company provides a cloud readiness assessment for potential cloud émigrés. The assessment examines the company’s current IT—its network infrastructure, the applications it uses and so on. It also analyzes the company’s security needs and considers cost and mobility issues.
Compudyne asks potential customers whether certain digital parts of the business should be kept on the company’s premises. Some IT functions might be best maintained on a public cloud, some on a private cloud, and perhaps some on-site. Spreading digital assets across different data systems is referred to as the hybrid cloud model, and it’s an option many companies use for their IT needs, Gibson says. Plus Relocation, for instance, maintains some of its own network infrastructure, though that’s solely to allow connectivity to the internet and Atomic Data’s cloud.
A leap into the cloud, Gibson says, is viewed by some as a leap of faith. Finding a provider that can protect a company’s precious data is crucial. For many businesses, a public cloud might well be the best choice. Public cloud offerings are managed by durable companies, and they’re typically inexpensive and use familiar applications and software. Still, Gibson argues that a smaller cloud services provider can provide more personal service—and accountability. “If we screw up, it puts a serious dent in our business,” he says.
Plus Relocation’s Kubitschek reports it hasn’t happened since his company migrated to Atomic Data’s cloud service. Before the move, if the power happened to go out in the company’s headquarters, it took a lot of time and sweat to recover. “We haven’t had any of those issues” since moving to Atomic Data’s cloud, he adds.
Without having to pay and manage an IT staff, Plus Relocation is working on its strategic initiatives. “The fact that the systems are stable and secure really allows us to focus on our business 24 hours a day,” Kubitschek says. “We have offices in Hong Kong, London and Shanghai. Those offices access the same systems. Knowing that they’re secure and they’re functional 24 hours a day is a great relief for us.”
Gene Rebeck is a Duluth-based freelance journalist who writes monthly for Twin Cities Business.