Size matters in the cloud

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Often, small businesses that adopt cloud computing do so in a big way because it gives them scalable, enterpriselevel IT services for relatively low and predictable costs. Large organizations, however, are burdened with legacy systems and security worries so they are more likely to take ‘baby steps’ into public clouds. The following two case studies are good examples of these differences between small companies and large enterprises. The first case studytells the story of an early adopter, Department 83, who now run their whole business in a public cloud, while the second is about the Open University, who, at the time of writing, were on the verge of moving certain, non-critical IT functions into the cloud.

Department 83

I interviewed Lucy Handley for this book on 15 January 2010. Handley is the founder and managing director of Department 83, a strategic communications results consultancy, established in 2002, that specializes in developing and implementing targeted speaker programmes for corporate clients worldwide. At the time of writing, Department 83 had five employees at their Wiltshire office in the UK and a network of freelancers working on various projects who were based elsewhere in the UK and Europe. In 2006 they signed a contract with Extrasys ( to provide them with Hosted Desktops with online data storage, Microsoft Office, e-mail and other applications on a per user per month subscription basis.

According to Handley, before Department 83 discovered Extrasys, their IT systems were ‘cobbled together’ and ‘it was a nightmare’. Handley provided the following details of their IT problems:

  • they had freelancers out in the field that could not access the Department 83 server and were using their own e-mail accounts – so e-mail messages ‘invariably went astray’;
  • information often had to be posted to these freelancers, which caused delays and inhibited business growth;
  • business files and e-mails were backed up to CD once a week;
  • they were inundated with spam e-mail.

Handley ‘used to have panic attacks at 3 o’clock in the morning’ wondering whether she had remembered the weekly backups. So when she saw the Extrasys desktop for the first time she was ‘absolutely amazed’, and said, ‘I want one of those!’ The benefits for Department 83, according to Handley, were:

  • it enabled their small company to work with large organizations at the same level;
  • their freelancers could access and edit company e-mail and documents from anywhere;
  • they could increase or decrease user numbers when required;
  • reduction in spam e-mails;
  • no worries about backing up data;
  • there was no disruption in business if any of their office-based staff had to work remotely for an extended period, which was ‘a huge value-add’, said Handley.

Regarding the security of their data, Handley had this to say:

Here was a company who had invested in the technology to make sure that the data they were going to hold for us was going to be looked after; it was going to be secure and it was going to be backed up, and I felt very confident about it. So, no, I had no issues at all about it and neither did any of the team. I think we were all just incredibly relieved to be able to get on with focusing on our clients rather than all our IT hiccups.

Even after more than three years using Extrasys-hosted desktops, and following two data centre migrations and the sale of the Extrasys business, Department 83 ‘haven’t really had any bad experiences’, said Handley, who later went on to say: ‘the actual speed is just as good as if it was working purely from a computer desktop; so we certainly can’t fault it; we would certainly never go back.’

The Open University

The Open University (OU) was established in 1969 and remains the United Kingdom’s only university dedicated to distance learning. The OU has around 150,000 undergraduate students and more than 30,000 postgraduate students. I interviewed Niall Sclater, director of learning innovation for the Open University, on 7 January 2010 to find out what their plans were for utilizing cloud computing. Sclater revealed that, although he has been tasked with investigating cloud computing in general, the OU’s ‘primary need was for e-mail for students’.

The OU has been using a system called FirstClass for discussion forums and e-mail. ‘It’s very much embedded in the organization’s culture and has been used for over a decade for students and associate lecturers,’ said Sclater. ‘It’s a client-based system although there is a web version of it. A decision was taken to decommission FirstClass and try and rationalize various systems into our Virtual Learning Environment, which is based on Moodle,’ he said, but Moodle does not handle e-mail so they needed another solution.

The two cloud-based solutions that Sclater considered were Google Apps for Education and Microsoft [email protected] ‘Microsoft and Google offer a very attractive solution for universities where they provide student e-mail (and staff e-mail if you want it) plus a whole host of other services for a specified period with a service level agreement,’ he explained. The ‘other services’ afford contact management; instant messaging; calendaring; storing and sharing of files in any format; and Google Apps also affords online editing of documents, spreadsheets and presentations. ‘Those are all things that the virtual learning environment doesn’t provide,’ said Sclater, ‘so we see this as a great opportunity to expand our offering to students without too much work on our side to develop or even host these systems or maintain them.’

‘So you can see more and more functionality that is now hosted by institutions migrating to the cloud,’ said Sclater. ‘E-mail is a primary example where it doesn’t really make sense to host it yourselves if you can get someone to do it for free. Perhaps there’ll be a cost for this long term, and that’s something we’ll have to stay on top of, but why would we bother hosting these services ourselves when we’ve got a robust service hosted by people who are experts and can deal with the spam management, for example? And scalability is an issue and student numbers may go up or down but not having to worry about that is obviously one of the key benefits of cloud computing.’

Of course moving systems into the cloud is not a decision to be taken lightly and these were the main concerns that Sclater recalled:

  • Data protection was ‘one of the biggest concerns’, but the OU has ‘guarantees from both those companies that they will host our data in the European Union or the States under “Safe Harbour” legislation,’ said Sclater.
  • Robustness of service is ‘an often expressed concern – what happens if it goes down?’ But Sclater argued that the OU ‘have problems with that internally and they are aiming to have a certain level of uptime (99.5 per cent) for their services, and they often don’t manage to do that, whereas these companies do.’
  •  Technology changes may cause problems if a feature is removed or changed, or a new one is added, because the OU helpdesk would have to deal with it and course documentation may become out of date.
  • Negative publicity for their supplier (Microsoft or Google) could be a problem because of the ‘joint branding’.
  • Advertisements placed on alumni user accounts may also make ‘the systems become less pleasant’ and ‘less attractive’ for them, said Sclater, but, crucially, advertisements will not be targeted at current students or staff.
  • Future charges for the currently free services are a financial risk, but they have a four-year contract and they will be given a year’s advance warning of any plans to charge educational institutions.
  • Vendor lock-in is a potential risk, too, because, as Sclater explained, ‘it is very difficult not to embed particular tools into course guides.’
  • Data loss is another potential risk, but if the OU were to implement backups they would be ‘almost defeating the whole objective of going into the cloud’ so they will rely on the supplier to look after student data.
  • Security is also a concern for the OU, however. Microsoft and Google ‘have got more resources to have more secure systems than we have overall,’ reasoned Sclater.

Rolling out the new SaaS system to thousands of students may take up to six months and will involve the following:

  • Keeping FirstClass running during the transition period and deciding when to switch it off.
  • Communication – Sclater revealed that ‘there is lots of uncertainty around and people are very keen to know what is happening about e-mail in particular, and we’ll have to work with stakeholders and make sure we communicate adequately to them the stages.’
  • Integration with Moodle is one issue – the OU’s online authentication system is supported by both suppliers so user accounts will have ‘single sign-on’, but there may also be some integration work to be done on the Moodle user interface.
  • Optionally phasing in features would probably reduce helpdesk calls but might also make students ‘think they were getting a raw deal,’ fears Sclater.
  • Developing policies for deleting user accounts, etc.

Students will gain most from the new system, Sclater predicted, because it would ‘make it easier for them to  communicate with their tutor group on their course, for example, and have an opportunity to instant message with those students or share documents with them. So I think the advantages are much more to the student than to us as an institution. I can’t see us benefitting that much from this apart from saving a bit of costs on the e-mail hosting side.’

There were no plans at the time to move staff e-mail accounts into the cloud, but ‘Anything’s possible,’ said Sclater, ‘and I think it would be very useful for us to dip our toes in the water with this initial solution for students; see how we get on and then you could well see us, within a couple of years, re-evaluating our internal hosting of Exchange and potentially shifting everyone to the cloud.’ Sclater also expects that ‘learning management systems, VLEs, will migrate increasingly to the cloud’ in the future. ‘With these cloud-based systems,’ he said, ‘you can have an SLA with one particular organization, you can control it very much more, you can ensure certainly that the accessibility is there, for example, and that things aren’t changing too rapidly; and that makes it much more feasible for educational institutions to go with than pointing students to a set of disparate online tools hosted by different providers.’

In the end, after a careful evaluation, Sclater announced on his blog the Open University’s decision to adopt Google
Apps for Education (Sclater, 2010). He later provided me with three reasons why they chose Google Apps:

  • It affords offline working using Google Gears/HTML5;
  • Group collaboration is easier;
  •  It is easier to set up.


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