Cloud and supply chain

Starting 2 or 3 years ago many people discuss about the cloud. Some voice said that many of the company will migrate to this kind of services in the next few years. I try, in this post to explain some of the concepts and also to offer you my opinion about the cloud service.

What cloud represents? Cloud, simply, it is a server when you can stare data, and this server can be anywhere in the world. Cloud is more than a server, because this service will offer you more service than a simple server. For example: Dropbox or Google Drive or Skydrive from Microsoft offer free cloud services witch allows you to share data, collaborate with other colleges and also edit files is some standard formats (excel file, word file, pdf file etc).

Together with cloud a new concept was develop: SaaS. What Saas is? The name is a acronym from “Software as a Service”. What that means? This means that you cannot buy the entire software solution, you can rent the software solution and you can use the software solution based on a monthly fee payment. If you pay the fee you can use  the solution, if you don’t pay you cannot use the solution.

All this things means that the software solution provider start to adapt their solution to new technology. This means that they must code the solution using the web technology and put this solution on a web server.

Also many providers of the supply chain software solution made this step and adapt their solution on web technology.

Why this solution is better than the classical solution, because if they do that they made for a reason and, all the time, the reason is money.

Let’s say that you want to implement a WMS (warehouse management software) solution in your organisation. In a classical approach you must to buy a server and put the software solution on that server. When you think what kind of server do you buy (what processors, how much memory, how big the hard drive can be etc) you always must to think in advance, and think that this server can sustain your business for 5 or more years. So you will buy a server with much more power than you need now and also you think to upgrade this server. Also you must find a room for this server and a guy who manage this. Also you must to think of a security system to secure the room and to secure the information from the server, also you must to buy licence for the software, antivirus software, server management software etc. All this things costs a lot of money and you must pay this money from the beginning, you do not have other choice if you choose the classical way.

What happens if you choose the cloud service? In this way you do not need the hardware, you rent a part of the hardware on a server, you do not pay a IT guy because the provider have a lot of IT guy, so you can rent time for a professional and very experience IT guy, you do not have to thing of a room, a security system or antivirus, or licence and other kind of software because everything it is already there and you just rent part of this service. Very beautiful and very easy if you choose the cloud way, because the hardware, software, database, IT guy, back-up and all this things can make your life a hell if you choose a classical way.

Cloud it is more expansive than classical way?  The answer is: NO, because you share the resources with others and you pay only for the resources that you use it. In this case one server (hardware) can be share for multiple users and also the cost will share, the same situation with the IT guy, room, security etc. SO the cost must be lower in cloud than the classical way. In fact is more cheaper because you do not pay the money from the beginning, you a pay a monthly fee just for the service that you use it. Also you can use more services and resources in the next second if you want and this give you the flexibility of your business.

People ask me about security in cloud and about the access of their data. They said: “my server is here in the room and is very secure, what happens in the cloud?”. You data is more secure in the cloud than in your server for several reason:

– you do not have back-up in other physical location because this cost a lot. Why this is important? Because in case of a fire or earthquake witch affect your building you data can be lost forever or if a hard drive collapse also you data can be partially or totally lost. In cloud the provider made daily back-up in other physical location than the current location. If fact you have the same data on different servers in the world and the probability to loose data is lower than in your case.

– the security of the cloud provider is best than your security thinking of building security and IT security. I saw some buildings where some providers have servers and they have there very hard security procedures. Is like you try to enter in a atomic electrical power generator. The IT security of the cloud provider in better than yours because he have specialist only on that direction, they do not made anything else all day than testing and solve the security problems.

People ask about their data, because the cloud provider have access to their data. Yes, this is true, they can access your data, but in most of the case the software solution provider is also the cloud provider and in this case nothing is different in the cloud than classical situation. Using classical situation your software provider can access your data anytime, actually you give them access and ask him politely to access you data because you need maintenance and you have a contract for this. Even if you do not let them to access your data he can write 3 row of a codes in a software and all the data that you have on the server he can have it on his server and you will never know that.

What’s the catch? Why do not all the people use cloud? The answer is simple: they are not informed and it is a new technology and must take some time to become popular.

It is also another aspect: if you work in a cloud you data can be compromises indirectly because if the hackers are not interested till now of your data, if you are in the cloud and they brake the server they will take also your data even if you are not the target of attack, The risk will increase.

Another important aspect is that in time you will become dependent of the cloud service provider and they will rise you price and the price will become higher than now. Think of the fuel supplier, you are dependent of them and they control everything and you do not have really a choice even if you want to change something. But this will happens in many years from now on.

So, if you plan to implement a software solution in your supply chain, consider cloud services like a viable solution. Know, after you read this article, i think you are more informed and more prepared for the new technology.

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