While multifamily technology executives continue to struggle with the ambiguity in semantics when it comes to cloud computing, even die-hard holdouts are beginning to investigate the cost benefits of outsourcing primary IT functions to “the cloud.” Some note that services currently being marketed as cloud computing might include Software as a Service (SaaS), managed services, co-located data centers, and hosting services, as well as truly untethered, multitenant cloud applications. “Only you can evaluate your environment and determine the types of cloud services that will provide cost savings, flexibility, or scalability to your enterprise,” says Scott McCurdy, vice president of information technology for Dallas-based Pinnacle, an American Management Services Co.
McCurdy notes his firm’s decision to enter into a cloud computing agreement with Carrollton, Texas–based RealPage in 2010 and says the process of relocating its systems to the RealPage data center is almost complete. “By spring 2011, we should be fully in the cloud,” he says.
Looking for Payback
Firms that have made strategic investments in systems and hardware over the past decade continue to be leery of cloud computing options as they await the full ROI on their current data platforms. Still, systems maturities over the next several years will present opportunities for clouding applications that could present a compelling value proposition to firms that traditionally handle most system hosting and development functions in-house. “Timing is everything when it comes to the cloud,” says Irvine, Calif.–based Western National Group vice president of information technology Ken Hodges. “We’re halfway through a big [IT] spend and don’t see a benefit [in] moving everything to a cloud option right now.”
Hodges says Western National is taking a hard look at Postini and e-mail archiving as well as getting rid of its co-location and moving disaster recovery to a cloud computing platform, although other than Postini he does not identify any specific vendors the firm is evaluating.
“We’re really trying to determine what the next-generation applications are for multifamily and what are the [cloud versus self-hosting] options for those,” says Denver-based Simpson Housing vice president and CIO Mike Casper, who notes that the cost–benefit analysis to go with a full cloud computing platform doesn’t pencil out yet for Simpson. “We still have costs sunk into our data centers and wouldn’t currently realize a benefit from a cloud.”
Santa Barbara, Calif.–based Yardi Systems moved further into cloud computing last fall, unveiling its Cloud Services—offerings that include hosting services, 24-hour client support, managed application updates, network security, and hardware and infrastructure that allow its clients to focus on principal business over IT admin. Yardi Cloud Services clients are hosted across 3,000 servers in nine data centers, including a dedicated business continuity and disaster recovery center in Phoenix. Data centers are PCI-audited and SAS 70 Type II–certified. “In addition to our investment and property management systems, our clients can also rely on us to manage hundreds of interface feeds to banks and third-party companies,” said Yardi vice president of IT Scott Wiener in an announcement.
The More the Merrier
IT execs also note the cost-savings and economies-of-scale upshot for cloud providers such as Yardi and RealPage, which can move closer to single-code source software instead of supporting several different software versions. While some still question the ability to deal with so-called “mystery release” unannounced updates to that code, experts say the impact to apartment firms that elect to embrace cloud computing is minimal.
“Change management is difficult from a baseline,” Caspar says. “We would expect communication and processes to accompany updates. At the end of the day, it could happen. But it could happen internally, as well.”
Hodges notes that a “private cloud” option might be more intriguing to Western National as the firm evolves. Indeed, there could be opportunities to develop private, virtual data centers that allow firms to move software providers in and out of enterprise clouds instead of the other way around. “The right strategy for me isn’t to determine best-in-class SaaS,” Hodges says. “We’re much more interested in platform and infrastructure cloud opportunities. When will it happen? I don’t know, but I can’t wait.”