Cloud Computing has a nice ring to it. However, using a word like cloud' to define computer technology leads to many questions even though it is a concept that is easily grasped. Think of Cloud Computing as a utility similar to an electric power plant. Instead of creating your own electricity, you plug into a shared resource that is planned, built and maintained centrally. Much like you plug something into an outlet and consume electricity, you can also plug into the internet and consume applications. There are vast numbers and types of devices that can be plugged into an electrical outlet, and a similar reality is emerging for applications using Cloud Computing.
It is important to note that there are three different forms of Cloud Computing: public, private and hybrid. A public cloud is like a power plant. The electricity is generated for anyone that is willing to pay for it. Private clouds are similar to a gas powered generator. You, or your organization, decide that you want Cloud Computing, but you want it for your own use. Most of the benefits of Cloud Computing remain, but it is within your walls and control. A hybrid cloud is much like you would expect. It blends the use of both public and private cloud resources. Within the context of this article, Cloud Computing will reference public clouds.
The convenience of easily accessible electricity has become an integral part of our day-to-day lives. And just like electricity, the Internet has become an essential part of daily life for many of us. In metropolitan areas, it can be argued that the availability of Internet service is even more prevalent than electricity because of wireless access. One of the key components of Cloud Computing is wide-ranging Internet access. Whether you are at work, home or travelling on the ground or in the air, the cloud is available. Simply connect to the Internet, open a browser and access applications you want to use.
If you purchase a new refrigerator and it is bigger than your old one, you don't need to worry about provisioning additional electricity for the appliance. The power plant already has you covered for your increased needs. Something similar happens with Cloud Computing. If you are using a cloud based application, and your usage goes from minimal to heavy, you don't need to worry about additional resources required to support the dramatic increase in usage. Cloud providers have that covered.
Not only do Cloud Computing providers handle scaling of your needs, they also handle the management of your application. Power plants do everything needed to keep the flow of electricity going. Cloud providers do everything needed to keep your applications up and running. Upgrades, patches, fixes, updates and all the other work it takes to keep your application available is handled in one place. Could you imagine having to fix your own power lines after a storm? While there are certainly cases when maintaining your own software makes sense, the upkeep of many applications is a cost that can be avoided.
Cloud Computing providers also centrally manage security. Because they must manage security for a large number of users, the investment in security by cloud providers is typically more robust than that of any individual organization. There are certainly those who have concerns about relying on cloud providers to keep their data secure. They can point to recently publicized data breaches as their rationale. Organizations are always at risk of theft. Banks, museums and home owners implement security systems (some quite sophisticated), and they all still experience theft when criminals are determined to steal. Cloud organizations take many steps to mitigate security risks, much like a bank does everything it can to prevent a robbery.
Just as receiving power is as simple as plugging in a cord, using an application through Cloud Computing is as simple as pointing your browser to a website and entering your username and password. Additionally, Cloud Computing providers manage security, scalability and the application centrally so you and your organization can spend time working, not worrying about software and system upkeep. The attention given to Cloud Computing corresponds with its opportunity to generate efficiencies, and the significant impacts on most industries.
How will Cloud Computing affect the mailing industry?
Now that we understand what Cloud Computing is, it is time to turn our attention to its impact on our industry. In many ways, Cloud Computing is already heavily integrated into the mailing industry. Like any technology though, it takes time for the full benefits of its adoption to be realized.
Popular postal data quality products such as ZIP + 4 coding and NCOALink processing have been provided as cloud services since their inception. Service bureaus centrally manage the software and updates of these products, so clients can benefit from the updated information without doing extra work. In the last couple of years, the mailing industry solidified its movement into the latest technologies when desktop mailing software companies began providing NCOALink as a service. Instead of individual users paying USPS licensing fees ($15,000 for the most common license) and maintaining NCOALink software, users now benefit from receiving NCOALink service through a vendor without incurring all of the associated costs of bringing NCOALink software in-house. In both of these examples, vendors are offering what most would agree are essentially Cloud Computing based services.
The availability of mailing industry specific Cloud Computing services increases each year. Just five years ago accessing services like record suppression, merge/purge, postal presort, and Intelligent Mail® tracking meant buying software or paying a service bureau. Now these services are available from multiple vendors in the cloud. The next five years are sure to bring additional services to the mix.
Cloud Computing is already well established in the mailing industry and the growing list of applications supporting the industry is promising. This shift toward Cloud Computing suggests the advantages of this method provide significant value. Jumping on a bandwagon often provides instant "me too" gratification, but there must be rationale as well. Reliability, scalability and security are meaningful incentives. By themselves, they may be enough to compel a switch, but there is another significant dimension to the evaluation. Decision makers looking at Cloud Computing often talk of Total Cost of Ownership (TCO) - a cost estimating practice used to help determine direct and indirect costs of a product or system. Although there are certainly exceptions, Cloud Computing typically reduces the TCO for products and systems dramatically.
As an example, postal presort and ZIP + 4 software take a significant time investment to keep the software current. It is common for these services to require weekly and monthly updates as well as other version releases periodically. The person responsible for ensuring that the software will produce USPS compliant mailings typically has significant skills and knowledge. They know how to take files of name and address data and turn them into formats that can be applied to mailpieces destined for the USPS mail stream. The time (read: money) spent updating software could otherwise be spent ensuring quality, developing processes, preparing more files or some other meaningful task. This is a short list of ideas about ways a person would add more value to an organization once liberated from time spent maintaining software. In TCO terms, this time is often described as a "hidden cost." It is hidden because it is not something that shows up on an invoice. Maintaining software isn't the only hidden cost, others will vary from organization to organization; including time troubleshooting software, security and maintaining redundant systems.
Companies around the globe are already benefitting from Cloud Computing efficiencies, but how will the industry go beyond just efficiency? As one looks around our industry, there are examples of how Cloud Computing is advancing beyond the basics. The prevalence of APIs (how programs talk between one another), Mail.XML, web-to-print and many other applications points to a changing future. Cloud Computing companies are combining multiple technologies to create new value chains. The future holds many new and exciting products, and it is up to our industry to make the most of the technology at hand.
Josh Evans is Vice President, Product Development, Lorton Data. He can be contacted at jevans@lortondata.com or 651-203-8208.
It is important to note that there are three different forms of Cloud Computing: public, private and hybrid. A public cloud is like a power plant. The electricity is generated for anyone that is willing to pay for it. Private clouds are similar to a gas powered generator. You, or your organization, decide that you want Cloud Computing, but you want it for your own use. Most of the benefits of Cloud Computing remain, but it is within your walls and control. A hybrid cloud is much like you would expect. It blends the use of both public and private cloud resources. Within the context of this article, Cloud Computing will reference public clouds.
The convenience of easily accessible electricity has become an integral part of our day-to-day lives. And just like electricity, the Internet has become an essential part of daily life for many of us. In metropolitan areas, it can be argued that the availability of Internet service is even more prevalent than electricity because of wireless access. One of the key components of Cloud Computing is wide-ranging Internet access. Whether you are at work, home or travelling on the ground or in the air, the cloud is available. Simply connect to the Internet, open a browser and access applications you want to use.
If you purchase a new refrigerator and it is bigger than your old one, you don't need to worry about provisioning additional electricity for the appliance. The power plant already has you covered for your increased needs. Something similar happens with Cloud Computing. If you are using a cloud based application, and your usage goes from minimal to heavy, you don't need to worry about additional resources required to support the dramatic increase in usage. Cloud providers have that covered.
Not only do Cloud Computing providers handle scaling of your needs, they also handle the management of your application. Power plants do everything needed to keep the flow of electricity going. Cloud providers do everything needed to keep your applications up and running. Upgrades, patches, fixes, updates and all the other work it takes to keep your application available is handled in one place. Could you imagine having to fix your own power lines after a storm? While there are certainly cases when maintaining your own software makes sense, the upkeep of many applications is a cost that can be avoided.
Cloud Computing providers also centrally manage security. Because they must manage security for a large number of users, the investment in security by cloud providers is typically more robust than that of any individual organization. There are certainly those who have concerns about relying on cloud providers to keep their data secure. They can point to recently publicized data breaches as their rationale. Organizations are always at risk of theft. Banks, museums and home owners implement security systems (some quite sophisticated), and they all still experience theft when criminals are determined to steal. Cloud organizations take many steps to mitigate security risks, much like a bank does everything it can to prevent a robbery.
Just as receiving power is as simple as plugging in a cord, using an application through Cloud Computing is as simple as pointing your browser to a website and entering your username and password. Additionally, Cloud Computing providers manage security, scalability and the application centrally so you and your organization can spend time working, not worrying about software and system upkeep. The attention given to Cloud Computing corresponds with its opportunity to generate efficiencies, and the significant impacts on most industries.
How will Cloud Computing affect the mailing industry?
Now that we understand what Cloud Computing is, it is time to turn our attention to its impact on our industry. In many ways, Cloud Computing is already heavily integrated into the mailing industry. Like any technology though, it takes time for the full benefits of its adoption to be realized.
Popular postal data quality products such as ZIP + 4 coding and NCOALink processing have been provided as cloud services since their inception. Service bureaus centrally manage the software and updates of these products, so clients can benefit from the updated information without doing extra work. In the last couple of years, the mailing industry solidified its movement into the latest technologies when desktop mailing software companies began providing NCOALink as a service. Instead of individual users paying USPS licensing fees ($15,000 for the most common license) and maintaining NCOALink software, users now benefit from receiving NCOALink service through a vendor without incurring all of the associated costs of bringing NCOALink software in-house. In both of these examples, vendors are offering what most would agree are essentially Cloud Computing based services.
The availability of mailing industry specific Cloud Computing services increases each year. Just five years ago accessing services like record suppression, merge/purge, postal presort, and Intelligent Mail® tracking meant buying software or paying a service bureau. Now these services are available from multiple vendors in the cloud. The next five years are sure to bring additional services to the mix.
Cloud Computing is already well established in the mailing industry and the growing list of applications supporting the industry is promising. This shift toward Cloud Computing suggests the advantages of this method provide significant value. Jumping on a bandwagon often provides instant "me too" gratification, but there must be rationale as well. Reliability, scalability and security are meaningful incentives. By themselves, they may be enough to compel a switch, but there is another significant dimension to the evaluation. Decision makers looking at Cloud Computing often talk of Total Cost of Ownership (TCO) - a cost estimating practice used to help determine direct and indirect costs of a product or system. Although there are certainly exceptions, Cloud Computing typically reduces the TCO for products and systems dramatically.
As an example, postal presort and ZIP + 4 software take a significant time investment to keep the software current. It is common for these services to require weekly and monthly updates as well as other version releases periodically. The person responsible for ensuring that the software will produce USPS compliant mailings typically has significant skills and knowledge. They know how to take files of name and address data and turn them into formats that can be applied to mailpieces destined for the USPS mail stream. The time (read: money) spent updating software could otherwise be spent ensuring quality, developing processes, preparing more files or some other meaningful task. This is a short list of ideas about ways a person would add more value to an organization once liberated from time spent maintaining software. In TCO terms, this time is often described as a "hidden cost." It is hidden because it is not something that shows up on an invoice. Maintaining software isn't the only hidden cost, others will vary from organization to organization; including time troubleshooting software, security and maintaining redundant systems.
Companies around the globe are already benefitting from Cloud Computing efficiencies, but how will the industry go beyond just efficiency? As one looks around our industry, there are examples of how Cloud Computing is advancing beyond the basics. The prevalence of APIs (how programs talk between one another), Mail.XML, web-to-print and many other applications points to a changing future. Cloud Computing companies are combining multiple technologies to create new value chains. The future holds many new and exciting products, and it is up to our industry to make the most of the technology at hand.
Josh Evans is Vice President, Product Development, Lorton Data. He can be contacted at jevans@lortondata.com or 651-203-8208.
