Cloud Computing For Small Business

If you run a small business or buy technology for one and have not been in a cave for the past couple of years, chances are you have heard of cloud computing. Very briefly, cloud computing means technology sold as a remote subscription service accessed over the Internet. You do not have to own hardware or software or employ tech staff. You do not have to keep up with new versions or compatibility, or amortize assets. You pay as you go, and pay as you grow.
So the exuberance is understandable. But should you transition everything you have to the cloud next year? No -- not even if you have the money and a competent small business IT provider -- and you have already adopted managed services and enjoy the benefits. Because the rarely mentioned problem of bandwidth latency promises to cramp your style on the cloud.

Of course, there are other legitimate reasons to not bet the farm all at once -- waiting for the early adopters to settle, phasing projects, picking the right business function to move first, and so on. But the technical roadblock of latency remains the number one factor that will delay the adoption of some of the most exciting aspects of cloud computing. Let's find out why -- because it's important to know your enemy.

The underlying assumption that will have you abandon your dust bunny-laden in-house equipment and jump into the cloud is this: by the time you can afford a 100Mbps Internet connection -- the current speed of most office networks -- there will be no difference between having a machine in the next room and having it in the Ether a thousand miles away, right? Wrong. Your real speed on the Internet is a function both of your connection speed and your connection quality, the latter being largely dependent on latency.
Bandwidth latency is the round trip time that a packet of data takes to get from one place on the Internet to another. The Internet has come a long way from the days of the World Wide Wait. But if I "ping" Google from my unduly fast 50Mbps fiber connection today, I get about a 70 millisecond (ms) delay. And that ICMP packet (the "ping") is really a best-case communication scenario. A 64K TCP/IP window with protocol overhead, which is the plumbing that most of your business usage will be riding, can be much worse. Now hold on to your seats. At that 70+ms latency, my maximum throughput is barely 5Mbps. Translated into non-geek: In real life, I can only use about 1/10th of that 50Mbps fat pipe I'm paying good money for to reach Google!

By the time your latency reaches 275 ms, you max out at the speed of a lowly T-1 line (1.5 Mbps), no matter what. Let me say this again. At 275ms to any given resource, there is no difference between a $20/month DSL line and a $20,000/month metropolitan area network connection. Looking at it another way, if you want your goods on the Internet to feel like they are in the next room at your office, you need less than 4ms latency to them -- a mere fantasy today.
On 11/11/2009, Google announced an 8-fold price drop in its Picasa service, allowing you to store up to a whopping 16 terabytes (tb) of data online for short cash. A slew of third party apps that allow useful access to Picasa make this an exciting cloud proposition. Until you realize that even if your latency to Picasa is a favorable 50ms, it will take you at least 4,000 hours to upload your 16tb, no matter what your connection speed. Good luck with that.

Bottom line, the fat affordable pipe utopia will be realized soon enough, but that pipe won't be able to deliver on its advertised speed. Making more bandwidth is easy; making latency go away is very hard. The tipping point technologies to mitigate latency are going to be compression, caching like Akamai, application acceleration like Citrix, and several others.

Therefore, a more useful way of thinking about the adoption of cloud computing for small business is that it will follow the shifting energy source model. No single renewable energy source is efficient and plentiful enough to replace fossil fuels on its own. We may be using a hybrid combination of wind, solar, hydrogen, Ethanol and whatever-else-works during the transition. Similarly, as some of the technologies named above mature asymmetrically, together with higher bandwidth availability, small businesses will be shifting more and more business functions to the cloud over time in a hybrid fashion. The Big Move has already started, but it won't be finished quickly. Until then, you might want to do something about those dust bunnies in your computer closet.