Cloud Cover

The Canterbury earthquakes helped elevate ‘cloud’ computing as a platform of choice for SMEs wanting to minimize their risk exposure. But does it have that silver lining for all businesses? Kevin Kevany reports.
You might think New Zealand’s business owners – indeed every Kiwi with a computer – would have been on the phone to the nearest ‘cloud’ computing service provider on the morning after the first Christchurch earthquake.
While terra firma was in turmoil in the months that followed, authorities from one end of the “shaky isles” to the other checked buildings and even speculated on where the next volcano might appear in our major city. But, it seems, small and medium business operators didn’t give it another thought. Or was that really the case?
Ted Jordan, CEO, CTO and founder of ActionStep in 2004, is one of those computer-industry whizzes with a pedigree that must be the envy of every wannabe Bill Gates. He’s had 20-odd years in the software world, largely in the US working for companies like HBO, Salomon Brothers, UCS (a Federal government subcontractor), and Mosaic Software (he founded the US operations). He’s done the lot and seen most of it too.
“Research conducted for us, by Perceptive in May 2011 from 250 SME ICT companies, found that despite some recent hype about the ‘cloud’, more than half the sole operators said they ‘didn’t know what cloud computing was’; while two-thirds of SMEs, with at least five employees; and three-quarters of those with two-to-four staff, have not adopted any ‘cloud’ computing,” says Jordan, noting the findings help demonstrate what is putting some SMEs ahead of the pack.
“The companies which are getting ahead are the early adopters – those engaging aggressively with ‘cloud’ computing for more than mere tasks in isolation, like file storage and backups, CRM and accounting.”
Chris Auld, Intergen’s chief technology officer, is another guru in the field. His company collected Microsoft Partner awards from 2007 to 2010, including overall Partner of the Year in 2008 and 2010, and earned membership to the 2011 Microsoft Dynamics Inner Circle (the only New Zealand Microsoft partner to be admitted). It also “survived the Christchurch quakes”.
“Despite its widespread use, the concept of the ‘cloud’ conveys several meanings depending on the vendors and technologies involved. Is it web-hosting your own application? Is it software as an on-demand service?
“The answer to all these questions is ‘yes’,” says Auld. “Essentially ‘cloud’ computing revolves around the outsourcing of computing of any kind – storage, CPU, applications – with the benefits of a shared-cost model.
“Reminiscent of the mainframe era of the past, there is an increasing movement towards having applications and infrastructure that reside remotely, accessed across a network.”
With his strong commitment to Microsoft, a company most directly associated with off-the-shelf software, isn’t it strange Auld is talking-up the ‘cloud’?
“Microsoft is making a strong play in the ‘cloud’. Office 365, which was launched in June this year, lets you access your email, documents, contacts and calendars from virtually anywhere, on almost any device. It brings together online versions of the best communications and collaboration tools from Microsoft (Word, Excel, PowerPoint, OneNote), at a price that is affordable for small businesses – starting from NZ$9.25 per month per user.
“As a fast growing company, expanding right across Australasia and into America and Asia, and employing 280-plus people, it made sense to adopt an internationally focused IT strategy – business as usual from anywhere in the world and in any time zone.
“We moved to the cloud between the September earthquake and the February Christchurch earthquakes, and it made a real difference to business continuity. Employees were able to access their emails from anywhere, including their home computers, as the office was – and still is – out of bounds,” Auld says.
Brett Hodgson, MD of Unisys NZ has seen the impact of the quakes on IT strategies too.  “Considering the events in Christchurch, technology that isn’t dependent on a physical location is becoming a must have for Kiwi businesses,” he says. “But, there are unlimited scenarios that can lead to IT system failure. Kiwi businesses are realising they must recover from any failure, regardless of the cause.”
Unisys NZ was also on the research trail, polling 48 IT professionals at industry events held in Auckland and Wellington during April 2011. While this largely took in government and corporates, it helped to put the SME study in perspective.
“When they were asked what posed the greatest risk of a business outage, their top concerns were, unsurprisingly, natural disasters (44 percent), human error (40 percent) and power outages (27 percent). On the upside, email was the most favoured application to make the move onto the ‘cloud’, at 40 percent, with web-hosting and CRM following at 27 and 16 percent.” 

Disaster? What disaster?

Jo Smith, marketing and operations manager for TimeFiler, has 13 years’ experience in implementing HRIS systems throughout New Zealand and Australia, and is widely considered one of the top consultants in her field. She and her colleagues experienced three office moves in a year in Christchurch.
“As TimeFiler operates in the ‘cloud’, our business was not detrimentally affected by the quake. In fact the opposite is true – we’re growing,” she says.
“Although we were displaced for a few weeks, our storage and disaster-recovery systems, which are hosted off-site in a protected building, held firm, with every server running as if nothing had happened. None of our customers experienced any downtime of their TimeFiler application.
“This was a huge relief for the 90 percent of our customers who are outside of Christchurch,” Smith says.
Far from being victims, they were rescuers: Christchurch’s St John Ambulance needed to be able to manage their ambulance rosters in the days after the quake.
“In this disaster situation, managing rosters proved a massive undertaking. To help them manage the deluge of work efficiently, we pulled out all the stops, at no charge, to help replace their shift-placement whiteboard with a web-based roster, enabling remote-management and much greater visibility of the roster for St John nationwide.

“Despite our own immediate difficulties we are immensely proud that we were able to provide vital support to St John and the people of Christchurch,” Smith adds.
TimeFiler is a great example of a Kiwi success story – cracking it in the outside world from day one (what most start-ups hope and strive to do at home first).
Back in 2005, Taylor Nelson Sofres (TNS), a global market information and insight group and the third largest market research and consulting company in the world, were in need of a new time-capture and reporting system to report profitability and time-usage by their 2,300 consultants, spread across 15 countries in the Asia-Pacific region.
“It came down to a shoot-out with a system from Singapore, and TimeFiler won,” says Smith, “based on our capability to develop a scalable system which would meet all their needs, they said. And because TNS Australia, recognised within the company as a smart operation, were already using our services.”
“What made this project all the more amazing is that all the scoping, development, installation and training were conducted from our New Zealand office. Although English is not the first language for most users (it is the corporate language), the ease-of-use of the product meant we didn’t need to visit any TNS offices on-site.
“There were no outages during any of the earthquakes, or any during the ‘big snow’ in July. Our locally-based host, CCL, did go onto generator on 22 February, but their backup systems worked, meaning no downtime for our customers,” Smith adds. 

The future of accounting

Typical of the young entrepreneurs who are seeing the ‘cloud’ as an opportunity to start with fewer barriers to entry, a larger catchment area, and to prosper sooner, is Justin Keen.
“Cloud accountants use current technologies to provide the efficiencies in your company, so you can focus on the more important areas of your business – like growing it,” says the chartered accountant.
“I believe the future of the accounting profession will be based around ‘cloud’ systems and the ability to work closer and more efficiently with our SME clients using technology.”
Clients are typically SME businesses, contractors, freelancers and property investors/managers on agreed monthly pricing plans.
“We are continually looking at new technology to improve the systems our clients currently use. We are also supporters of social media and the potential that it presents to small business,” says Keen, who got his break while on an OE in the UK, when he persuaded Xero co-founder and fellow chartered accountant, Hamish Edwards, to give him a role in their launch sales-team.
On returning home, he launched his accounting firm using the online accounting system Xero, using the knowledge built from the Cloud System.

What’s the hold up?

What is holding back SMEs from floating onto the ‘cloud’?
Sue Hirst, founder of CFO On-Call, says “one of the biggest concerns so far from SMEs we’ve spoken to is the perceived risk of having data in the ‘cloud’ and what would happen if a provider closed its doors? If this happened during the ‘early adoption’ phase and clients suffered, it could set-back the whole concept substantially.
“Linked to worries about losing control of data is the financial status of some of the smaller suppliers. Risk management around backing-up data, is replaced by risk management around keeping a good Internet connection.
“The smart model for ‘cloud’ commerce is to build a robust general accounting engine and allow for seamless integration of add-ons. This follows the ‘best of breed’ theme and means each provider can focus on and provide the very best solution using their know-how. 
“Add-ons such as inventory management, job management, e-commerce, CRM and mobile workforce management would be very difficult for one provider to develop effectively,” says Hirst.
The “don’t get locked-in” strategy is one which ActionStep’s Ted Jordan endorses, as he believes the ‘cloud’ is still in its infancy.
“I believe we are going to see a rapid evolution that is akin to that of Facebook and Twitter, dramatically and emphatically changing today’s way of doing business on the ‘cloud’. Facebook and Twitter have changed customer-relations and feedback in the commercial world and Twitter has altered news-gathering and political mobilisation in the ‘Arab Spring’.
“They bolted from being social media to being change media in a very short time. And who knows where they and the ‘cloud’ will evolve to next. So don’t get boxed in,” Jordan cautions.
His company “walks-the-talk”, he says, by using a single product enabling clients to manage all areas of their organization, online, in one easy-to-use system. This system is said to enhance employee communication and collaboration, while achieving “great efficiencies across sales, marketing, operations and finance – with the capability of delivering powerful insights to management”. It all leads to increased productivity – a goal which Jordan is evangelical about.
Kevin Kevany is an Auckland-based freelance writer.
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