By Mike Mullin
TOTOWA, N.J. — Cloud technology is creating a stir in the commercial real estate world. However, the meaning of this term and the value of its associated technology platform remains ambiguous. So what, exactly, is cloud computing, and how can it help multifamily, office, industrial and retail real estate owners and operators?
Most people are familiar with the concept of Software-as-a-Service (SaaS), where software is purchased by subscription, and then delivered to users via the Internet. Cloud has that component — and more. In the simplest sense, cloud computing can be thought of as enabling a large pool of users to share the same resources.
The cloud platform enables organizations to manage all of their technology over the Internet. This includes networking components as well as mail, productivity tools and enterprise software. Storage is a big part of it too. Companies can perform backups, and store documents and data via the cloud.
Image created by Sam Johnston.
Cost reduction: In the cloud environment, a provider administers the infrastructure, including automatic network and software updates. Users have immediate online access to application software and databases; they simply log in and everything is up to date and ready to go. With the cloud, companies no longer have to maintain in-house servers or the personnel to manage them, and IT expenditures are reduced to a monthly, subscription-based operating expense.
Agility: The cloud is completely scalable, enabling a company to only use resources it needs. For example, the lease of a new multifamily development may involve a temporary swell in the number of sales agents on staff who need access to the leasing application being used for the property. With the cloud, a company can simply procure added subscriptions to the application for that project. Or, companies can reallocate resources for peak flow capacity. For example, if rent payments come in during the first week of the month, computing power can be increased to accommodate more people entering cash into the accounting system.
Device independence: Accessing the cloud requires only one device — whether a desktop PC, laptop, tablet or smart phone — and an Internet connection. With technology devices and flexible commuting becoming a much bigger piece of the commercial real estate business environment, this is can be benefit of the cloud.
Security: The issue of security and the cloud has been among the most heated topics of discussion when it comes to the platform’s pros and cons. While security is an ongoing concern across the board, regardless of computing environment, cloud security today is better than most corporate firewalls.
Disaster recovery and business continuity: Cloud providers take responsibility for their clients’ system backups and will recover their data in the event of a disaster. In the case of a power outage, cloud providers maintain multiple points of access with multiple Internet connections, batteries and generators. System users can tap into the system from anywhere they can find power and working Internet.
In real estate, like most other industries, mail remains the single most popular use of the cloud platform. Second, demand is growing rapidly for onsite leasing applications delivered in a distributed computing environment like the cloud. The cloud enables geographically dispersed brokers and property managers to log into common system from anywhere. The same can be said for accounting applications, where real-time data can be accessed, analyzed and transformed into reports at any time, from any place.
Is the cloud for everyone? Some chief information officers of larger companies will say that moving everything to the cloud should be a top priority. Others will say that having more control over a corporate computing environment is more important. Most fall somewhere in between. The choice to “go cloud” may be easier for small and mid-size companies, who can gain access to the same business applications as their larger competitors, at a fraction of the cost. Yet regardless of size, real estate organizations should be taking a closer look at the cloud as a platform that is here to stay.
— Mike Mullin is the president of Totowa, N.J.-based Integrated Business Systems Inc., a provider of integrated property management and accounting software and services. The IBS software, which is written by real estate professionals, addresses property management, accounting and construction management tasks.