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The cloud explained – for business leaders

Written by:
April 2015
Categories: For the Business Leader, Podcasts

Reading time estimate Reading time: 6 minutes

Cloud technologies have been around for some years now. We all use them, whether we realise it or not. LinkedIn is a cloud based application, as too are most other social media apps. Skype is a cloud app. And Microsoft Office365 is a cloud-based offering of the Microsoft Office suite.

But what does it mean when something is in the cloud? And what can we get from the cloud?

Understanding how technologies work together

To understand the cloud we must first understand how different technologies work together to provide the applications that we use. At Camford Management Consultants we use what we call the Layered Framework, as shown below. The framework represents the stack of technologies in a logical order.

Technology Stack

At the top level of the technology stack are the business activities. Whilst not a technology, the business activities are the only reason why you have the technologies in the underlying layers.

The second layer is the Applications layer.

We all use applications in both our personal and professional lives. And we all use cloud-based apps on our mobile phones. The most obvious example is email. But there’s tons of different applications for every conceivable purpose. For example, you might be a runner and use Runkeeper to track your running, or you might be on a diet and be calorie tracking in MyFitnessPal. Perhaps you’re checking your lottery results in the Lotto app, or keeping up with the news on the BBC News app.

Whilst we can all waste a lot of time on non-business applications, the applications that we use in business only exist to make our work activities easier and/or less risky. They provide efficiency through fast access to data and from process automation.

It’s not just your phone that you’re accessing cloud apps on

This is where the third layer of the technology stack comes in. This is what we term End-User Technologies. In IT speak you are the end-user. The person that uses an application or technology. The end-user technologies are those devices that are ‘owned’ by the user. They may ultimately belong to the organisation you work for, but for the most part they are assigned to a single individual.

This ownership is not a hard and fast rule. For example, in a call centre the computers (‘desktops’ in IT speak) might be used by multiple people working on different shifts. End user technologies are, however, those devices that are not kept in the controlled environment of a data centre or computer room. They include: smart phones, tablets, Phablets (large screen smartphones that fill the gap between a tablet and a traditional smart phone), laptops, and desktops.

The vast majority of the applications we use access and store data centrally. This requires both centralised storage and applications to run on servers. Servers are essentially the big brothers of desktops. They have far greater power and serve multiple users at once. They make up the fourth layer of the framework.

Finally there is the networks that connect the servers and storage to the end-user technologies so that the applications can all communicate. Given the performance required, the business criticality and the security requirements, the servers, storage and core networks are housed in the data centre (I won’t go into the difference between a data centre and computer room – we’ll save that for another day!).

So where does the cloud fit in?

Well, that all depends. The cloud is a bit of a catch all term for a suite of technology and service offerings. These offerings are often known by another term which is XaaS. The X refers to a number of possibilities (described below), and the ‘aaS’ refers to as-a-service. Using the layered framework we can see the various XaaS, or as-a-service offerings, which include:

  • SaaS – Software as a Service
  • DaaS – Desktop as a Service
  • IaaS – Infrastructure as a Service

These are all examples of the ‘cloud’.

To further complicate things, the XaaS acronym has traditionally been applied to service offerings that are mostly a software or hardware product. They may have some element of human processes such as support services, but they are primarily tangible hardware and software. In more recent times the XaaS acronym has been applied to services that are more process based than hardware or software. For example:

  • SaaS – Security as a Service
  • SMaaS – Service Management as a Service

So what does this all mean to the layman?

The exact acronym, whether XaaS or Cloud, and whether a technology heavy offering or something more process based, is useful to know but really quite irrelevant. The important point is to understand that a cloud-based offering typically means one or more aspects of the technology stack (as shown in the layered framework) is hosted in someone else’s data centre. It is also likely that a team of people who are not on your payroll are responsible for some or all aspects of the maintenance and support.

Cloud services enable you to access layers of the technology stack much faster (often immediately), without high up-front equipment costs, and provided in a service wrapper.

Is the cloud cheaper?

Typically, no. But then I can’t think of any ‘service’ that costs less than its component parts. And you can’t really perform a true apples with apples comparison. For example, if you move services to the cloud, but maintain the same number of people in your IT team, then you definitely won’t be making savings!

What you are paying for is a service. And that service comes with service guarantees that often exceed that which you could provide yourself.

The primary financial benefit of the cloud is that you pay only for what you need. If you need more, or less, you can usually adjust your service accordingly. In the traditional model where you owned all of the hardware and software, you had to over-provision as you needed to ensure that IT infrastructure (servers, storage, network and data centre) could accommodate those rare times in the year when you needed maximum performance. This meant that most servers ran at less than 10% of capacity for more than 90% of the time. That’s incredibly inefficient.

Server virtualisation sought to address this efficiency issue. Cloud offerings extended this further still to share the physical hardware across multiple companies (whilst keeping each companies data secure from the other ‘tenants’).

What are the Cloud downsides?

There are challenges that must be addressed when using cloud services. These include:

  • Moving between cloud vendors (cloud vendors are becoming much better at this)
  • What happens if your cloud vendor could goes out of business (this happened in the UK when cloud vendor 2e2 went bankrupt in 2013)
  • Less ability to tailor applications. Cloud services are termed as ‘off-the-shelf’. This means you are buying a fixed product. We’ve seen clients struggle with this cultural change – although this can be a blessing in disguise as too much tailoring can increase costs and risk in the long-term
  • You have little of no say in application integration – A client of ours had all of its core applications in the cloud, using cloud-based apps from a number of unrelated providers. During an upgrade of their cloud-based billing application, the cloud vendor had decided to cease integration with the cloud-based finance system that they were using from a different vendor. With a cloud-based offerings there was no way of avoiding the upgrade. This caused some panic for the client and resulted in a temporary reversion to manual processing of invoices
  • The proliferation of shadow-IT – this is a phenomenon unique to the cloud. It is where the business signs up for cloud services without engaging the central IT department. This can result is security holes being punched into your environment
  • Too much choice – with so many cloud apps springing up it can complicate and slow down decision making


Hopefully you now have a better understanding of what the cloud is, and what’s available in the cloud. You’re already using lots of cloud apps, but perhaps didn’t know it.

There are still many IT departments and businesses today that ask, ‘Why put it in the cloud?’. This is the wrong way to look at things. If you started a business today the last thing you would do is invest in expensive IT infrastructure, networking and data centres. You would put as much in the cloud as possible. In fact we have one client that has done exactly that!

The question you should be asking yourself is, ‘Why not in the cloud?’

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