Growing up in the West of Scotland I considered myself quite well acquainted with clouds. They were the familiar grey blobs in the sky where the sun should be. They dispensed rain, snow or often some combination thereof – and maybe the occasional thunderstorm. However, much like a sunny afternoon in Glasgow, this has suddenly changed. Now it would seem I’m supposed to be listening to music, sharing photos and playing games in clouds. It doesn’t stop with our personal lives either: businesses’ inventory information, customer records and business processes are also apparently better suited to a location somewhere in the troposphere. These ethereal bodies are even colluding with each other now – with different companies selectively sharing and concealing information between their respective clouds. Interest is rising and the barometer’s getting low: according to all sources, the cloud’s the place to go.

The core concept of cloud computing is that distributed resources are shared amongst the cloud users in an abstract way such that each individual client need not concern themselves with where the data is stored or the processing carried out. With the recent surge in mobile computing the appeal of this approach is clear. Users expect to be able to perform increasingly complicated operations on the go, however, cannot reasonably carry around the capacious hard-drives or sustain the power-hungry processors and graphics cards required to fulfil these needs. The cloud farms out all the clever stuff to some remote behemoth (with mains power), that can tirelessly crunch bits in a distant server room somewhere.  This means that even relatively dumb smartphones can employ state of the art applications and consume terabytes of media, without the need to carry around a disk array and battery pack every time they leave the house. Moreover, since the mechanics of utilising these services are concealed from the user, the tech-novices that have been snapping up the latest hand-held devices will still be able to reap the benefits of this sort of architecture without first picking up a computer science degree.

But can clouds bring similar benefits to customer relationship management? After all call center agents aren’t typically roaming around while taking calls and it’s not as if users typically need high-spec machines to run their CRM application anyway. Similarly, in a typical CRM setup most of the processing is already done remotely today – particularly in those with self-service components. Even the case for arguing the cloud provides additional abstraction to the users is weak: most users would be blissfully unaware if their content was served by a Solaris box at a particular MAC address running WebSphere one day and a Windows NT box with a different address using JBoss the next.

So why bother? The main reason is ease of deployment. When your computing power is being provided by a cloud you no longer need to fret about purchasing expensive hardware and constructing a secure, climate-controlled facility to house your fancy new gear. Similarly, someone else can concern themselves with penetration testing and getting everything setup. It could be argued that this simply pushes a one-off capital expenditure into a recurring operational expense and will cost more in the long run. However, surely the opportunity cost of this large initial outlay would be greater than a smaller, on-going cost where the saved capital could be invested in the business’ own area of expertise. Moreover, running costs could actually be reduced in some instances, since the provider of the cloud-based services would hopefully be able to achieve economies of scale and better utilization and therefore could pass these savings onto the service-consumer. At the same time the business can spend less on technical support staff, security and insurance by moving their computing power to the cloud.

Clouds also provide the reassurance of business continuity since the organization only needs to worry about providing a disaster recovery site for their agents, rather than also having to duplicate their server capability. Similarly, it provides the option for low-risk, incremental changes in capacity that would help the business respond to an uncertain future and could be of particular use to smaller firms. Likewise, industries that experience choppy demand for their services across the year – or even theoretically throughout the day – can more easily scale-up and scale-down rather than always having to provision for an infrequent peak demand.

However, clouds aren’t unique in providing these abilities. Organizations commonly make shared use of disaster recovery sites and come to arrangements to lend their spare capacity to each other during times of exceptional demand. Furthermore, many companies are essentially already using “clouds” under the guise of Software as a Service (SaaS) or Utility Computing. It is also the case that many businesses have pre-existing investment in expensive hardware that adequately fulfils their needs and have hired support staff that cannot be readily jettisoned – in which case there may be little benefit to paying someone again for what they already have.

Perhaps more importantly, companies using cloud-based solutions are a little less in control of their own destiny. They suddenly have to rely on some third party for mission-critical services: which they could botch and cause severe damage to the service-consumer’s company. The service provided may be less tailored than a bespoke in-house solution and prices could rapidly go up when contracts expired if the business has become obviously dependent on a cloud provider’s services. Worse still the cloud-provider could go out of business leaving service-consumer unable to meet their customer needs and therefore sure to follow in its footsteps.

Like so many “revolutionary new technologies” cloud-based computing is sold to us a panacea that will cure a multitude of ills – but upon closer inspection it’s neither as “new” or “revolutionary” as its proponents would have us believe. It’s clear that for SME’s cloud-based computing can help to remove some of the barriers to entry that will enable them to compete with larger rivals and it can help to de-risk the operations of businesses of all sizes. However, for more established players, with steady demand the benefits may be less pronounced and CTO’s are likely to prefer the devil they know than the novel ones that lurk within the clouds. Essentially this is analogous to the outsourcing of operations that is so common in the CRM sphere – and boils down to a decision on what direction the company wants to move in strategically. Would they rather virtualise their organization, focusing only on their core competencies or vertically integrate, controlling as much of the value-adding activities as possible.

It may still start raining CRM – but that doesn’t mean that everyone needs to get wet.