By offering a fundamentally faster, less risky, and more affordable solution to on-premises applications, cloud computing will forever change the economics of hospitality information technology.

Published: 31 May 2011

By offering a fundamentally faster, less risky, and more affordable solution to on-premises applications, cloud computing will forever change the economics of hospitality information technology.

With cost-effective alternatives for application enhancement and development, cloud computing provides innovative ways to create competitive industry advantage. Why are cloud solutions the right technology strategy for 2011 and beyond?

1. Delivers faster time to value

Cloud computing affords hospitality organisations a return on investment within weeks, not months or years. Since cloud computing streamlines all stages of the application development cycle, with complete, pre-built applications and project management services, developers can immediately focus on customising features and functionality.

Additionally, cloud applications are much faster and less expensive to scale to multiple applications since there are no additional costs to deploy more to existing users. And because all applications are built on the same platform, pre-existing capabilities and services can be reused across multiple applications.

2. Requires no up-front capital expense

Cloud computing platforms are based on subscription pricing. Companies can start small, with virtually no up-front costs, and instantly scale to meet broader business needs. The ability to pay-as-you-go is categorised as a service rather than a capital expense, making it a compelling option for financial predictability and project accountability. And because there is little risk, cloud solutions allow hospitality organisations attain better information technology despite reduced capital budgets.

3. Minimises operational costs

Cloud environments are immediately available and vertically integrated with ready-to-use services for developers, administrators and end users, cutting project time and cost. Cloud technology providers even manage the burden of operational maintenance and support. Performance tuning, patches, and upgrades are delivered as part of the service, requiring fewer technical resources and minimal demands on the customer.

Such operational efficiencies are the result of a true multitenant architecture where users share the application’s physical instance and version. Individual deployments of applications occupy virtual partitions rather than separate physical hardware and software stacks. So every time a major innovation is released, every customer instantly benefits, resulting in lower risk, rapid innovation and reduced costs.

As hospitality organisations reap the benefits of placing their technology in the cloud, what do industry professionals need to consider to stay on top of this growing trend?

1. Is the cloud reliable and secure?

In contrast to an on-premises system, data maintained in the cloud is securely stored elsewhere. Gone is the fear of losing information if a localised computer network crashes; and it is accessible from anywhere in the world with an Internet connection.

Additionally, cloud technology providers offer secure infrastructure and reliable development platforms using such enterprise-class security as firewall protection, intrusion detection systems, and SSL encryption. Because it relieves the cost, burden, and liability of maintaining security compliance and certification from the customer, cloud computing saves customers both time and expense.

2. Does the cloud simplify integration?

Gartner estimates that up to 35 percent of the implementation costs associated with on-premises application development is for integration. In comparison, cloud computing makes it faster and easier to integrate and extend legacy environments as well as connecting to other cloud services. And because of the cloud multitenant architecture, integrations no longer “break” during upgrades, require intricate technology dependencies, or lead to vendor lock-in.

3. Are all new technology providers truly in the cloud?

Beware of the “false cloud”. Cloud computing might sound like network computing, but it isn't. With network computing, applications and data are hosted on a single company's server(s) and accessed over the company's network. In contrast, cloud computing encompasses multiple companies, multiple servers, and multiple networks.

So when considering a cloud computing solution, distinguishing criteria should be carefully evaluated. A true cloud technology provider:

• does not try to sell hardware
• does not need to install software
• will have open APIs
• does not need to re-architect systems
• does not require a specific number of machines upfront
• does not run on only one operating system
• does not store data in on-premises machines
• will connect to any computer or personal device

With limited budgets and a highly dynamic market, it is critical to stay ahead of the hospitality information technology curve. With cloud computing, organisations can extend the life of their existing systems with new innovations, improve time to market of new systems through affordable pricing, and ultimately gain competitive advantages in the hospitality industry.

(This article has been contributed by Gregg Hopkins, President and CEO, Libra OnDemand)

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