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Selling the Cloud: Technology Companies Look for New Customers Interested in Efficiency, Mobility

As the cloud becomes mainstream, local information technology companies see its services not as a trend, but as something with great potential and a way to secure recurring revenue.

A printing company came to Weidenhammer more than 20 years ago with an idea for customers to order financial documents online, print and then ship on demand.

Ordering one at a time doesn't require a complicated computer system to support the idea, but the printer sometimes got a million orders a day.

The Wyomissing technology firm built an application, but it was so large it made more sense to run the system itself. The business relationship lasted two decades and marked Weidenhammer's entry into hosting and, eventually, cloud computing.

As the cloud becomes mainstream, more businesses are moving workloads to the cloud to handle growing technology needs. Security still remains the top concern for businesses new to cloud computing. Local information technology companies see cloud services not as a trend, but as something with great potential and a way to secure recurring revenue. As the firms move beyond the early adopters, education and marketing become even more important to sell the cloud. The cloud is still a small portion of their business for now, but at some companies, it's the fastest-growing area or part of each instillation.

"While the old model of IT does not look like it's disappearing any time soon, cloud computing is going to take a larger role in the future," said Craig Stonaha, president of Laughing Rock Technology, Spring Township, a commercial and industrial IT firm.

What it's for

Cloud computing is all about storing and using data and programs on the Internet, not your computer. You're using the cloud when you're outside your workplace's network, said Pete Mullenberg, vice president, LYNX Computer Technologies, Inc. Wyomissing.

One recognizable way to use the cloud is for a company to buy access to a large public cloud for a window of time when huge amounts of data are being processed. That company doesn't need to have banks of resources or servers 24-7, but that's a rare example, said John Weidenhammer, company president.

Yet, more customers need a customized option for their needs, which might include public and private cloud options. Clients can send their files, applications and email to the cloud. They can move mobile device management or backups to the cloud.

More and more people are using the cloud in their personal lives through Apple's iCloud, Dropbox and Google Drive. More than 60 percent of businesses are using the cloud for at least some of their information technology work, according to Spiceworks's 2014 State of IT Report.

Moving services to the cloud shifts at least some of the work and the cost of IT to the contracted company. Then the customer no longer has to buy and maintain much of its hardware and software. Some software already is moving from a one-time purchase to a subscription model, which works with the IT company's monthly fees for cloud services, Mullenberg said.

The monthly fees can help a customer budget better, without large expenses for major equipment purchases. Also, support is included, and the IT company, which probably is more secure and better trained, will find and correct issues before they become problems.

The biggest benefit is freeing up a company's own IT staff to allow it to focus on a company's core business.

"We want your IT people focus on the business-critical apps, not whether you have enough storage space," said Scott Kantner, chief technology officer at Distributed Systems Services Inc., Spring Township.

But, typically, cloud computing is more expensive, Stonaha said.

Also, the customer needs to have a good Internet connection to use cloud-based services, which are online. Companies working with large files, such as engineering drawings or videos, might have a difficult time seeing the return on investment.

Who uses it

Early adopters in the business world include industries with a mobile workforce, like trucking firms and service companies. Instead of waiting to find Wi-Fi networks to sync data, devices can be connected to a cloud-based network.

"They reap and see the benefits almost immediately," Stonaha said.

Newer companies haven't invested in significant infrastructure, so it's been easier to choose the cloud. The highest level of adoption in the State of IT report was the smallest category of company, with less than 19 employees.

The cloud also makes sense for companies with an IT problem to solve, like more security needed to pass an audit or an upcoming event like a move to a new building, said Ann Borza, vice president of services for DSS.

"Its usually in periods of growth and change when the cloud makes sense," she said.

As with any shift in technology, there can be concerns.

"We find a lot of customers are very concerned about the fact that they no longer control their data," Stonaha said.

Giving up the email servers might mean less work, but now the emails are out of a business's control. There are concerns about getting that data back if the customer goes with another provider.

When working with an IT department, there can be a struggle.

"There's still fear at the IT level that what you're doing is taking their job," Weidenhammer said.

Also, the IT provider can tightly manage its own procedures, but it's more difficult to manage a third-party client, like a public cloud. That security risk is also a fear, especially with the data breaches made public, such as Target, Home Depot and iCloud.

A breach is possible anywhere, said Rick Phillips, vice president of computer solutions at Weidenhammer. He tells customers the public cloud-based providers are in the business of being secure.

There are concerns, but computing is changing, and the cloud provides a solution.

"What's happening is, our clients, increasingly, they want to get at their applications anytime on any device from anywhere," Weidenhammer said. "They want to do that nonstop."

Managing that goes beyond a typical workday, and it's complicated and expensive to run a nonstop computing environment. That's pushing more customers to providers who can do this work through the cloud.

Who offers it

Now that cloud services have been around for a while and the technology is becoming more mainstream, IT companies are connecting with a different type of customer.

Laughing Rock is focusing on moving industrial and manufacturing clients into the cloud, if it makes sense. The companies usually have their own industry-specific software and have a network. Laughing Rock can move some processes into the cloud, reduce the hardware and make the system leaner.

Weidenhammer has targeted financial services, health care, education and manufacturing industries, all regulated industries going through significant changes with a great need for efficiency. Cloud services can provide some of those changes, Weidenhammer said.

DSS is connecting with local midmarket companies that want an IT partner as well as larger companies that want to move specific processes, like testing, into the cloud.

Sometimes the IT consultant works with an executive and can focus the consultation on the return on investment, Mullenberg said.

Those consultations can require more education. DSS' marketing department is building a library of resources for potential clients, including videos and webinars, to help people understand the cloud and the company's offerings, said Kristy Slimmer, marketing specialist with DSS.

"It's a long process, and I do believe it's the future, and eventually they will understand and recognize that there's a need," said DSS Account Executive Kimberly Miller.

©2014 the Reading Eagle (Reading, Pa.)