The cloud! More and more this term is thrown around — almost shouted out — in the media, in meetings, in IT departments. It’s everywhere. And while the cloud as a concept is used and abused in nearly every way that a word can be, one thing holds true: The cloud is an undeniably disruptive and powerful technology. And it’s here to stay.
Here’s a factoid to help put the cloud as business driver in perspective: In 2012, the cloud market was valued at more than $100 billion. According to Gartner, an IT research and advisory company, by 2016 that number is expected to double. So, how much of this soon-to-be $200 billion industry will find its way to security integrators?
For those who offer security hardware and services to homes and businesses, the benefits of cloud computing are significant. The cloud offers an abundance of new opportunities. It provides a platform to generate recurring monthly revenue (RMR). It’s a way to easily create, deploy and maintain new low-cost devices and software solutions. Above all, it’s a way to sell into organizations outside of loss prevention (LP) — including marketing, merchandising and operations — that have deep pockets and a great need to better understand their brick-and-mortar businesses.
How nice would it be to deploy a global solution … without having to lift a finger? Or to move your storage capacity from megabytes and terabytes, to something approaching the infinite?
Finding Your Way in the Cloud
The cloud is something that all of us use every day. If you use E-mail, you use the cloud. If you purchase something online, you use the cloud. In essence, the cloud is not much different than the Internet itself. It’s a pooled network of servers that provide, for all intents and purposes, convenience. The cloud offers significant computational power without requiring additional hardware.
Some systems integrators, especially those with established business models, may be hesitant to dive into the cloud. But a service-based and managed-solutions model is tough to beat. It allows businesses to deliver more for their customers — more storage, more analytics, more access, more data — while simultaneously reducing upfront costs and expediting the sales cycle.
By next year, Gartner predicts 30% of Global 1,000 companies will leverage two or more cloud services to manage IT services. Only 5% of Global 1,000 companies do this today, which means there is still time to capitalize on this market. And according to the Security for Business Innovation Council, a consortium of IT security professionals from 19 companies worldwide, many organizations are preparing to move more business processes, including mission-critical apps, to the cloud. Those organizations include such mega-brands as Coca-Cola, eBay, FedEx, EMC, Fidelity Investments, Intel, Johnson & Johnson and Walmart.
The cloud benefits systems integrators in a number of ways. For those integrators that already deliver highly secure environments, where critical business tasks are processed efficiently and data is stored securely, adding cloud services to the portfolio makes good business sense.
By offering cloud services, an integrator can help a client pave the way to increased return on investment (ROI), despite leaner budgets and smaller staff. The savings associated with cloud-based and managed services are compelling. Instead of heavy upfront investments in hardware and infrastructure, such as managing a datacenter or hiring additional resources, it’s more economical to outsource that portion of the business to the cloud.
For a monthly fee, a company can purchase a portal into a variety of services, of which they can pick and choose what they need. This allows security integrators to design more cost-effective, elastic and scalable security systems for their clients. At the same time, these systems provide high-margin, recurring revenue streams. Not the least of which, cloud-powered services are easy to monitor and maintain as integrators can assess the health of cloud-powered deployments — remotely — from wherever they are and at any time.
Small Firms Find Traction in Broader Markets
The cloud broadens an integrator’s reach by marketing services to small and medium-sized businesses. Due to the lower cost of ownership and the economical pay-as-you-go model, small businesses can now afford many of the same services that were once restricted to the budgets of larger companies.
Small businesses can leverage the cloud to tap into many robust services, such as video storage and business intelligence to help them better run their organization. And it’s much easier for many companies, regardless of size, to pay a small, monthly fee as opposed to a large, one-time upfront cost.
According to a report released by Parallels, a provider of hosted and cloud services and desktop virtualization, six million small businesses entered the cloud market for the first time in 2012. As these small businesses test the waters and begin to grasp the benefits of the cloud, they’ll grow comfortable with the technology and be open to entrusting more of their operations, such as monitoring or access control, to cloud-based services.
Notably, it’s these same cloud services that offer integrators the opportunity to position themselves as an advisory partner. Many clients are interested in less complexity. While they are laser-focused on delivering the best service for their customers, they may not care about exactly how integrated security systems work.
What end users care about is finding a trusted integrator to design the perfect security solution for their needs and feeling secure about their data. Cloud services give them just that. And with the immediate and remote deployments and upgrades offered by the cloud, they don’t need technical knowledge to navigate the system, troubleshoot, and install updates and patches — that’s all done behind the scenes.
Of course, there is one key question that customers may ask: Is data in the cloud secure? It may surprise you to know that in most cases, cloud-based systems are actually more secure, utilize more advanced access protocols and encryptions, and offer greater physical security than their on-premise counterparts.
Keeping Pace With Clients’ Needs, Expectations
In the security industry, products and services rapidly evolve, and integrators that embrace new technologies stay ahead of the curve. Retailers and grocery stores — indeed just about every offline business — now expect live, on-demand video surveillance of all their locations, and the ability to search for archived video on a variety of platforms from anywhere in the world. The cloud offers this mobility. If these solutions are part of an integrator’s portfolio, it demonstrates they are in lockstep with the client’s needs.
It’s not if an integrator should move toward the cloud, it’s when. Some obstacles remain, such as legacy equipment and analog integration, yet cloud adoption continues to steadily increase.
According to CDW Corp.’s “2013 State of the Cloud Report,” a major driver of cloud adoption by businesses is the personal use of cloud services, such as Google Docs and Apple’s iCloud. This personal use and comfort with the cloud helps pave the way for businesses to view the cloud as a viable option for many services.
If this is the direction businesses are headed — and research suggests so — it makes sense for integrators to offer these services or risk getting left behind.
Steve Russell is co-founder and CEO of Prism Skylabs, a cloud service that transforms any video camera into a visual merchandising and businesses intelligence tool that can be accessed from any device.