An introduction to cloud hosting for tour operators and wholesalers

Planning technology infrastructure across multiple offices in different countries is a challenge for tour operators and wholesalers, with many businesses finding the answer by moving their hosting to the cloud.

NB This is a viewpoint by Brian Mebourne, senior vice president of technology at Open Destinations.

A move to the cloud requires careful thought and planning and here's an outline of some things to consider

The pros and cons of cloud computing

Pros

Cost and flexibility

Cloud providers build their environments to be high-speed and load balanced, with a virtually limitless set of resources: computer power, memory, storage and bandwidth. This allows you to scale up when demands are high, and only pay for what is needed. Plus you don’t need IT staff to manage your infrastructure: the cloud provider takes care of it all.

Mobility and collaboration

The traditional obstacles to sharing documents and applications are removed with the cloud. Your workforce is less tied to a dedicated work station and can be distributed across various regions. You also avoid dealing with complicated security policies, because authorisation access is much simpler in the cloud.

Security and continuity

Cloud providers typically manage multiple data centres around the world. Hosting applications and data nearer to a market and end users can improve response times and performance.

Storing data in the cloud also removes the risks associated with storing data on a physical device, with traditional IT operations and disaster recovery being delivered by the cloud provider.

Cons

Total cost of ownership

Paying a lower monthly operational cost for cloud-based services helps a company’s cash flow, however these services can become more expensive over time. These costs may ultimately exceed the one-off cost that hosting on-premise would have attracted.

Confidence and control

Hosting on-premise means a company has full, transparent control of their infrastructure, software and security policies. Delegating this responsibility to a cloud provider can be considered a risk due to the opaque nature of cloud computing.

Regulatory Controls

Some jurisdictions mandate that data must reside within its boundaries. This negates some of the flexibility that cloud hosting provides by deploying applications closer to the end user.

So how do you decide the best option for your company?

The next step is to consider the pros and cons above in the context of not only your company's resources but also your long-term business strategy.

Evaluate the technical knowledge within your organisation.

With a cloud provider, you will need specialist vendor management skills to manage the commercial relationship. You also need to consider how you will make the transition. We have found that tour operators often take a slow approach to moving services to the cloud to see how it compares. This transition needs to be managed carefully to ensure it does not compromise the company’s ongoing operations.

Compare capital expenditure vs. operating expenditure.

Will your operating costs be constant or fluctuate long-term? What are the expansion plans for your organisation?

For example, if you are expanding into multiple offices, a cloud solution may save you expensive capital costs of purchasing hardware and employing multiple IT teams. This can improve cash flow for the organisation, however the overall operating costs may become more expensive than the maintenance costs associated with on-premise hosting.

What are the options for hosting technology?

Rather than keeping your entire IT infrastructure on your premises, you can look at outsourcing all of your hardware or alternatively use a combination of both.

There are basically four options for hosting technology. Each of these options requires a different skill set with your IT team, which you need to evaluate as well.

Option 1: Infrastructure on Premise

This is the traditional method of hosting for most organisations, which requires a team of IT professionals to manage. You buy, locate and monitor your physical hardware and you also manage the licensing, deployment and running of all software on the hardware.

Option 2: Infrastructure as a Service (IAAS)

Here you pay a subscription to a third-party cloud provider. Your virtual hardware (servers, storage and networking) is located somewhere on the internet and your IT team will provide changes as needed. You will need a smaller team of IT professionals in-house to manage the licensing, deployment and running of all software on the virtual hardware.

Option 3: Platform as a Service (PAAS)

Like the IAAS option, you have virtual hardware hosted through a third-party provider. You pay for additional subscriptions to install system-level software on the virtual hardware, which means you are outsourcing your operating system and components. You will still need IT professionals to manage the licensing and deployment of users applications and user access, but the team will decrease as you outsource more of your hardware to the third party.

Option 4: Software as a Service (SAAS)

You pay a subscription to just access an application running on the internet. The provision of virtual hardware, monitoring the hardware, installing and running the system-level software, licensing and deployment of users applications are all managed by a third party. You will need a system administrator to grant user access to the application.

So when is cloud computing the right choice?

Here's the answer, in infographic form