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What does Cloud Computing Mean and How Can It Affect the Material Handling Industry?

In its simplest terms, it means your software and data are housed on the internet or "out there in the clouds" rather than physically located on your laptop or hard drive. Familiar examples include programs such as Hotmail, Gmail or any of the services that allow you to store photos and videos or back up a hard drive to an online site. Although this is now a hot button term, many of us have been using Cloud Computing for some time. In a survey conducted by Pew Internet* over a year ago, 69% of all internet users in North America had either stored data online or had used a web-based software application.

For businesses, Cloud Computing generally refers to a computing structure which links computers in a grid to provide a specified service. Users then buy access to software and/or data stored on the grid, or they purchase processing power that is supplied by the grid of computers. So instead of owning and developing your own computing infrastructure (totally time and expense intensive!), you would purchase software/data/storage space in the same way you buy utilities like electricity or phone service.

An example of a Cloud Computing product in the business arena is Amazon's AWS (Amazon Web Services). The web retailing giant launched their "infrastructure web services platform in the cloud" in early 2006. This service functions like an infinitely expandable hard drive with platforms, software and programming provided. According to Jeff Barr at Amazon, "You build a structure called an AMI, an Amazon Machine Image, and on that AMI you put your operating system, your applications and any data that you would like," Barr said in a conference in London. "You take that whole AMI, copy it to S3 (Amazon's storage service), then we can launch one, 10, 50, however many you like." (For more information Other industry leaders such as IBM, Dell, HP and Intel have also entered the market with their own offerings.

Not Comfortable in the Clouds? A Look at the Advantages of and Concerns about Cloud Computing

Imagine the ease of purchasing an existing system which you didn't have to develop on your own. You could modify it to your needs, you'd have unlimited capacity, and you'd only pay for what you use. Many users cite these specific advantages as reasons for using Cloud Computing:

Cost-Effective - You don't actually purchase and own the software. Instead, you're in a pay-as-you -go type of situation where you only pay for what you use as you use it. Pricing for most services are based on a month-to-month rental basis. Users can save because of economies of scale (the more users purchasing the less the service costs)

Reduced Developmental Time/Costs - Because the basic software and programming is provided, you don't need a staff of IT people devoted to programming, operating and updating an in-house system.

Unlimited Capacity - There's no need to worry about expanding capacity as you grow or encounter peak usage periods. You have virtually unlimited capacity and scalability. The sky's the limit!

Dependability - Service providers say they have distributed, secure and redundant systems (Is anything 100% foolproof? We'll look at a high-profile instance where they weren't a bit later in the article....) Think about it, however, are your computing capabilities immune to computer crashes, building fires or natural disasters?... Exactly!

Accessibility - Users can conveniently access programs from anywhere-at any time--simply by using their browser (or possibly even a mobile device). You can have employees spread across the globe, and they will all have instant access to the data, software and computing power needed to perform their jobs. It's an easy way to share information among multiple users.

Although the advantages are numerous, there are legitimate concerns about the technology. Your data is, after all - in the clouds! Some of the major concerns include:

  • Private data may be sold to third parties or used to market products to subscribers.
  • Cloud Computing providers may be sold or cease business operation.
  • For public providers of Cloud Computing, there could be governmental access to private data.
  • There is a general concern about security/auditing/compliance for remotely stored data.

The fragility and complicated nature of Cloud Computing systems was highlighted in 2008 when Amazon's Cloud Storage service (S3) suffered two major outages within six months. Some users were offline for more than eight hours and experienced major business disruptions. Clearly, Cloud Computing still has issues to be resolved.

Material Handling - A Place in the Clouds?

The material handling industry has had SaaS (software as a service) and similar computing options for years. However, Cloud Computing is generally considered a step beyond SaaS offerings. The difference between Cloud Computing and SaaS is the location of the data storage. With SaaS, companies typically house and maintain the data on their own computers, whereas with Cloud Computing, the data and the application are both stored remotely.

But what if large-scale industry programs such as ERP and CRM systems-or even WCS and WMS--were essentially provided to your company and all you needed to do was tailor parameters to your requirements and input your data? Think of the time and cost savings this could provide - AMAZING! While the industry isn't there yet, some companies are sowing the seeds for the future. Obstacles yet to be overcome include the costly systems integration work that would need to take place to allow various pieces of equipment throughout a warehouse system to work together seamlessly.

At Insight Automation, we're keeping our finger on the pulse of the latest developments in material handling software, systems and providers. As for Cloud Computing, you might say we're keeping an eye on the sky - for this or other technologies, you can rely on us to provide you with material handling systems that are proven, cost-effective and state-of-the-art for the industry.  For More Information Click: Insight Automation or email David Sellers at or call 859-647-1111 for more information.

*Source: Pew Internet & American Life Project, April-May 2008 Survey 

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