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Fake cloud market a growing industry in SA

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The fake cloud market is becoming a multimillion-rand industry in SA, as more organisations invest in so-called cloud solutions, only to realise later they have not reaped the expected benefits.

This is according to industry pundits, who believe that while the washed down or ‘fake cloud’ industry is still in its initial stages in SA, it is growing rapidly, influenced by companies’ desire to make the cloud shift, in efforts to become more scalable and create better end-user experiences for customers.

While true cloud refers to access to computing, software and storage of data over an Internet network, where services are offered either via software-as-a-service (SaaS), platform-as-a-service (PaaS) or infrastructure-as-a-service (IaaS), fake cloud is a term used to describe cloud computing that is not based on cloud SaaS.

Sandra Crous, MD of payroll firm PaySpace, says as more organisations rely on cloud solutions for their enterprise performance management, enterprise resource planning and customer relationship management services, some are falling into the trap of investing in applications and solutions that are only a legacy platform known in the industry as “hosting”.

“With cloud washing or fake cloud, a supplier will take an existing legacy application and host it for a customer. It is not a native cloud (or true cloud) application; it’s really just the old program with the word ‘cloud’ attached to it.

“The fake cloud industry is a multimillion-rand industry, with many businesses taking existing legacy software to a hosted environment. To move from a legacy product to a true cloud architecture means software vendors would have to re-write applications for the cloud. This is an expensive exercise as a result of the maturity of legacy software, combined with the cost and effort of re-writing software specifically for the cloud.”

According to Crous, motivations for vendors to “cloud-wash” their software include retaining customers, or to attract new customers who don’t have a thorough understanding of the cloud, or to boost sales, resulting in companies wasting money and not realising any of the cloud-first strategy benefits they were hoping for.

In some instances, legacy IT providers will use fake cloud solutions to buy time, while they are developing true cloud applications or looking to acquire the technology.

While some of the products based on the fake cloud can be accessed through a browser, they are simply not scalable as a true cloud solution would be, adds Crous.

“Suppliers sometimes push customers to make a decision to commit to their solution and do it fast. Confusion creeps in because many do not understand that a program’s ability to connect to the cloud does not necessarily make it a native cloud solution. Nor does the fact that software can be accessed via the Internet make it a true cloud solution – native cloud software is designed and purpose-built specifically for cloud environments,” adds Crous.

Derrick Chikanga, IT services analyst at Africa Analysis, believes that given that the local cloud market is only starting to evolve, the fake cloud market is currently small compared to the global market, with the situation expected to change as more players enter the local cloud market.

“Generally speaking, ‘fake cloud’ is when a service provider offers on-premises versions of traditional software hosted on infrastructure in another remote location. Among the repercussions of this, is that unlike cloud-based SaaS solutions, traditional software deployed in off-premises servers is difficult to upgrade, expensive to maintain and vulnerable to cyber threats,” he explains.

While the local cloud market, specifically the SaaS market, is largely dominated by major cloud providers that include Amazon Web Services, Microsoft, Oracle, SAP and Salesforce, as more players enter the local market this could also increase the fake cloud market in SA, notes Chikanga.

Spotting the difference

Crous says true cloud offerings should offer a self-serviceable, multi-tenancy architecture with a pay-as-you-use cost model, disaster recovery, security and redundancy systems (to account for host network downtime) in place.

“It’s a safe bet to say that any software that cannot boast these features is simply a cloud washed programme, and should be avoided at all costs.

“Native cloud solutions are the only way forward, particularly in payroll and HR environments. The majority of businesses want to move to cloud applications to gain benefits such as improved efficiency as a result of multi-tenancy, saving on internal server and other hardware costs such as maintenance and security, and more importantly, being able to pay for only what they use. With true cloud, you should never be locked into a contract with very little to no manoeuvrability,” Crous continues.

In terms of data security, certain native cloud applications will have advantages such as security standards, as well as multi-factor authentication that offer businesses additional layers of security.

“We are seeing extremely slow response times on hosted solutions, with our customers complaining that none of the usual measures seem to increase speed to acceptable standards. Another area where hosted solutions fall flat, is that they tend to be more labour-intensive and really offer dated technology filtered through the cloud.”

Crous points out that businesses should insist on a true cloud solution when embarking on a cloud journey.

Chikanga notes: “Organisations should be on the lookout for various features such as the scalability of their software and the costs associated with the solutions. Often, traditional software solutions take time to upgrade and update. In addition, traditional on-premises solutions take time to implement and result in unusually higher costs as compared to cloud-based solutions.”

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