Veröffentlicht am 21.11.2011

Das Folgende wurde in World Leasing News am 8 November 2011 erschienen.

Von Richard Raistrick



There is plenty of hype around cloud computing, and in asset finance we are seeing it just as much as those in other industries. The commercial viability is clear to see, but before committing to large-scale business change, decision makers are cautiously considering the options.

Cloud computing is a relatively new option for businesses. While the concepts have been around for a long time, only in the last few years has the solution become a feasible business proposition. It is effectively the result of a convergence of key technological improvements - the capacity and price of internet connections; cheaper, more reliable data processing and storage; advances in web user interfaces and a greater focus on the user experience.

Data storage is a good example of where cloud technology is commonly being used. Enterprise storage remains expensive: the added considerations of RAID, load balancing, staffing and so on means the true business cost is still huge. Instead, the price of using a slice of storage from a cloud storage provider is barely noticeable, because customers only pay for the storage used, and only for as long as they need it. For a while now, cloud providers have also offered a similar services for databases, processing power, and even entire infrastructure.



Software-as-a-Service

One of the more pertinent business-focused cloud models is known as Software-as-a-Service (SaaS), which usually involves an internet-accessible application serving a specific requirement. Salesforce.com, a cloud-based CRM provider, is a great success story of such an approach: lots of businesses use it and they’re comfortable putting their sensitive sales data on the other side of a login.

From a theoretical standpoint, using SaaS can be considered as fundamentally similar to using an application service provider (ASP). In an ASP world, software applications and databases are hosted on the provider’s hardware and accessed using thin-client technology such as Citrix. It’s no coincidence Citrix is now a key player in the SaaS market and public cloud computing in general.

The cloud-based email offerings of Google and Microsoft have also been popular for a long time. The advantages over local management lie in the fact your users connect to their mailboxes and files directly in the cloud. Companies no longer need to own or support expensive dedicated servers, or deal with the associated upgrade and maintenance obligations, and these new offerings provide other useful business features.



Cloud first

Cloud computing is already causing some important operational shifts in leasing and asset finance. When selecting providers more and more companies are adopting a “cloud first” strategy. From small start-ups, major operations, and even governments, those keen to work smarter are moving cloud solutions to the top of the list.

Instead of making a large purchase or procuring a loan, leasing used to be the smart choice for business. Nowadays in technology, the cloud is often considered as the new smart choice.

Technology leasing companies, too, are looking into different ways of profiting from the latest trend. Hewlett-Packard Financial Services allocated $2bn for financing clients moving to cloud computing, including lease agreements, sale and lease-back arrangements for existing IT infrastructure, and deferred payment plans.



Security concerns

Banks tend to require reliable and scalable solutions and are often under pressure to deliver this at reduced cost, so it is unsurprising that cloud hosting is an attractive idea. Recently, leasing providers are also embracing this concept and offering leasing applications in the cloud for use by finance companies, and for good reasons they are seeing some success.

Unfortunately, the practicalities can be costly and complex. True business ownership of data becomes a grey area, especially when the legal requirements of various countries are a factor. Integration with in-house applications can be difficult, and this interferes with the streamlined nature of such a business. To access and control data in fine detail becomes a different proposition; business continuity needs to be approached differently; monitoring and reporting might have to be implemented anew; and your provider must be willing to undergo audits to the same exacting standards you are. What’s more, we all know services can fail, and do: if someone’s ISP lets them down then none of your people are working and the resolution is out of your control.
But the biggest shortfall is that, by being placed outside of the business entity, sensitive data core to the business is being held up to a far greater level of security risk than ever before. In short, you are placing your most important business asset in someone else’s hands. Regardless of the guarantees and service level agreements in place, the bald fact is your data is now outside of your control, and at a time when data protection, SarbOx compliance and corporate compliance are all pressing concerns, for many this concept is unpalatable to say the least.

Many in the IT and finance industries remain concerned about running an internal business application externally. At CHP we asked a few of our clients what they thought about cloud working: the general feeling was while they’re content to use services from Salesforce.com, Google, and Microsoft to help the operation run more smoothly, most wouldn’t dream of storing their leasing portfolios out there. Being successful in business requires taking some risks, but from what we’ve been told, compromising your bread and butter is a step too far.



Security blanket?

Thankfully, a sensible solution is at hand. Leasing companies can benefit from the efficiencies and operational gains of cloud without compromising on security. The emerging preferred option is private clouds: secure, internal infrastructure operated by the organization.

IT departments at finance companies are creating secure virtual clouds for application deployment - with applications and data running internally, primarily for internal users - and abolishing the security concerns which hold so many back. Internally, teams can be charged on a simple usage basis, often at a fraction of the current costs and helping to align departmental expenses with revenue. Those who want to be smart about cost saving are considering the benefits of this.

If the infrastructure is internal to the organization, then integration, data access, disaster recovery, and management information issues can all be brought back under the control of the business.

In a recent poll of 1,200 IT professionals, only 7% said they would use a shared, public cloud computing environment while 47% said they would make a private cloud their first choice. Security concerns were the most cited deterrent.



Summary

Cloud computing is not the future: the technology has been with us for years. However, there has been a philosophy shift whereby resources are viewed as elastic. In effect, they have become limitless - using expandable resources, a data migration which might once have taken 10 days can now be complete in under an hour.

Nevertheless, outside of a private cloud, an appealing, trustworthy, and innovative business model is still to evolve; one which exploits the technological advantages cloud computing enables, while addressing compliance and security concerns.

Until that day, lessors can still benefit from using their own secure, private cloud running only the systems they require and sized automatically as needed. This approach represents all of the main advantages of the public cloud, but eliminates the problematic risks. Resources expand in line with requirements, and when the dust settles, your business is free to thrive.




Reproduced by permission of the publisher.