January 1, 2013
By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Building an Impenetrable Cloud

Secondary Storage

Cloud Sherpas' Merrick also sees many companies that have gone through cloud deployments keeping a backup of their data and applications behind their own firewalls. This is especially true of companies that have customer information that is very sensitive or constantly changing, but other companies with lots of records have also done the same.

Rob May, CEO of Backupify, which provides secondary data storage to companies using both Google and Salesforce.com cloud-based apps, also encourages companies to back up their data. "The service providers can do a lot to keep data safe, but they can't protect you from accidental deletion by an employee," he says.

With the cloud, that is a bigger problem than data being manipulated or stolen by an outside threat, like a hacker. "A lot of the time, with the cloud, it [is] a problem with an authorized person and data being deleted by accident," May says.

Many of these errors occur when firms cling to multiple, outdated workflows that require employees to manually cut and paste or import and export data between systems.

"You should have a second copy of your data somewhere else in case of loss—a backup that is not controlled by the SaaS provider," May suggests. "It's a good idea to have a backup to protect yourself against user error, breached accounts, or server outages."

When dealing with cloud-based CRM providers, companies can include risk transfer and indemnification provisions in their contracts for an additional layer of protection should the vendor fail to safeguard the information in its care. Some insurance companies even issue policies for data breaches, covering the costs to pursue legal action against those responsible and repair the damage.

But ultimately, no one else can tell you whether the cloud is right for your business' needs.

Sharp Rees-Stealy is so confident in its cloud deployment that it is looking to add capabilities. The Varolii system now only handles voice and text messages, but the healthcare provider is considering adding email notifications and expanding its use beyond just appointment reminders to include notifications about the availability of flu shots, cancer screenings, vaccinations, disease management program enrollments, and other patient offerings. "There are so many other things that we can do," says Kathy Hutchens, director of marketing for Sharp Rees-Stealy's patient contact center. "We're off to a great start, but we're only scratching the surface of what's possible."

And data security will not be an issue. "We have an absolute obligation to protect patients, and a differentiating part between the cloud today and ten years ago is the level of trust. Ten years ago there wasn't the level of security [that there is now]," Bidwell concludes.

“There’s some old thinking that needs to retire,” Pombriant adds. "The cloud is where everything will go. There are a lot of different clouds to choose from, and they're all pretty safe.

CRM Storms into the Cloud

Gartner estimates that 35 percent of all CRM-related implementations today are being carried out in the software-as-a-service (SaaS) model. That's up from 8 percent in 2005 and 20 percent in 2008. By 2020, more than half of all CRM implementations will use SaaS, Gartner predicts.

The analyst firm further expects SaaS-based CRM sales, which are currently valued at $4.5 billion, to reach $6.3 billion by 2015, representing a 15 percent compound annual growth rate.

Analyst firm TechAisle found that among small and midsized businesses, the average number of cloud-based business applications has more than doubled in the past two years alone. Of those, CRM applications have seen the deepest penetration, at 55 percent—up from 34 percent in 2010.

"Messaging, collaboration, and CRM are all areas that are already well into the cloud," says Mike Cohn, senior vice president of marketing at Cloud Sherpas, a provider of services to help companies adopt, manage, and enhance cloud solutions from Google, Salesforce.com, and other vendors. "Over the next few years, we'll start to see other applications, like human capital management and back-office systems like [enterprise resource planning] move to the cloud.

Cohn further expects that in 10 years, everything will be in the cloud. "The cloud will not be a question but the norm," he says.

News Editor Leonard Klie can be reached at lklie@infotoday.com.