It is still early days for the cloud and over time its lure will surely only grow, writes Charles Orton-Jones
If you want to understand the benefits of the cloud then don’t ask the vendors. Ask the users. And there’s no better user to ask about the cloud than food delivery firm Ocado.
Founded in 2002, Ocado today makes 150,000 grocery deliveries a week in the UK, three-quarters of which are sourced from Waitrose. It’s a firm with a very bright future. The share price has tripled in a year. A new £216-million deal with Morrisons will help the supermarket establish itself online. And a recent analyst report by Cantor Fitzgerald suggested that Amazon should buy Ocado, primarily to acquire its world-leading technology.
At the heart of Ocado’s operation are cloud services provided by Google. For e-mail and calendar, Ocado’s staff use Google’s business-class version of Gmail, called Google Apps. To store and share documents, Ocado uses Google Drive. For chatting and collaboration there is Google+.
Paul Clarke, Ocado’s director of technology, says the cloud is under-rated for these basic services. “Cost is way down on the list of why we use cloud services. It is about collaboration,” he says. “For example, if you want to share a document, you don’t have umpteen different versions flying around. You have one document which can be edited and shared. Our record is 245 people editing the same document at the same time, which is pretty fun to watch.”
Google+ is sometimes derided as a poor rival to Facebook. Not at Ocado. “We use it internally to share information, for hangouts and to create a sense of community,” says Mr Clarke. Open conversations between multiple parties, complete with links to relevant documents, can spring up. Old fashioned e-mail conversations, by comparison, are hopelessly crude.
There is another pertinent motivation to use the cloud – the opportunity to cut carbon emissions
When Ocado is testing new software and services, it uses Google Compute Engine, which offers phenomenal computing power on demand. “One of our teams is working on 3D and robotics,” says Mr Clarke. “They are developing very sophisticated vision systems which need a lot of CPU [central processing unit] time. Google Compute Engine gives us elastic computing power.”
Ocado even uses Google Maps to direct delivery drivers. Soon customers will be able to use the same cloud service to track the location of their drivers.
The essence of the Ocado story is that the cloud is about more than simply replicating off-line services. It is about using the cloud to create new services, new ways of working and achieving step changes in performance.
There is another pertinent motivation to use the cloud – the opportunity to cut carbon emissions. Data centres are measured by their ratio of total power used to power used by the IT kit: a metric known as power usage effectiveness (PUE).
“Perfect PUE is 1.0,” says Steve Salmon, principal adviser of KPMG’s CIO [chief information officer] advisory practice. “Typical PUE is 2. The best-in-class data centres see around 1.2. There are new facilities in the Arctic circle claiming to have achieved a score of 1.”
By using cloud services based in data centres achieving this level of efficiency, firms can cut their carbon footprint. Though Mr Salmon warns PUE is not the whole story: the construction impact of the data centre is also relevant and erecting a massive facility in northern Sweden is not without its costs.
Perhaps the single biggest reason to use the cloud is scalability. Hailo, the taxi-hailing app which is used every four seconds and is endorsed by 30,000 taxi drivers, relies on Amazon Web Services’ cloud hosting to handle new business. A spokesman says: “This growth would not have been possible without the scalability of cloud computing, which enables the company to add capacity during busy periods with a click of a mouse, and to move into new markets without investment in its own IT infrastructure.”
The cost-saving of cloud is hotly debated. An oft-used analogy is renting and buying a car. One may be more convenient than the other, but over time more expensive. But it’s not hard to find outright wins for the cloud. Digital signage provider Signagelive moved its entire infrastructure to Rackspace’s cloud hosting. It estimates a 50 per cent cost-saving.
Silver lining for small businesses
Online marketing agency atom42, which employs 24 staff in Camden, and counts Huffington Post and Match.com as clients, is a fine example.
Founder Andy Atalla says: “We moved to Google Apps for our e-mail, Box.net for our files and a Gradwell solution for our VoIP [internet] phones. We also use GQueues for our task management and Evernote for note-taking. Together, these things allow us to work at 100 per cent capacity, even if we’re out of the office, which is fantastic.
“Costs vary. At the time Google Apps was significantly cheaper than the Microsoft Exchange option we were on before. Although, with Office 365, I think that has now been addressed by Microsoft. Box.net wasn’t cheap, but felt like good value for the functionality. Again, though, Microsoft has had a good stab at undercutting this with their new product.
“I’m a bit of a geek at times, so I actually enjoyed the transition. However, if you’re a normal person, you might want to get someone in to help out with it all.
“There is definitely a larger strain on our bandwidth, so I would only recommend making such a change if you have a strong internet connection. If you need a leased line put in to make this work, then you should really consider the increased cost of the line as part of the overall package – this can cost around £300 per month.
“I’m definitely aware of the security issues, but after careful consideration, I felt working with a company that offered high levels of security, as Box.net does, we were well covered. After all, having your own files saved locally, in one place, has its own security risks.”