Cloud computing has been getting a lot of attention in the information technology space. Before you put your head in the cloud, though, there are some things you should understand about the concept of cloud computing.

1. The definition of cloud computing is evolving.

What is cloud computing?

"That is a very hard thing to define," says Ken Weinberg, vice president and co-founder of Carrier Logistics Inc., Tarrytown, N.Y.

When people talk about cloud computing, he explains, they could be talking about a number of things. They could be talking about software-as-a-service, where users access the software via the Internet. They could be talking about Web-based applications or Web services where data or reports are presented as Web pages via a browser. In most general terms, however, cloud computing refers to the computing infrastructure such as servers and storage.

"The terms are evolving as the technology evolves," says Vikas Jain, vice president and general manager of Fleet Risk Advisors, San Diego. "The general consensus is that cloud computing is the umbrella that covers any time you offer some service or resource through the Internet."

You might only be providing the raw horsepower to run an application, he says - "the engine behind the software." Someone else may provide the software that is delivered through that "engine," or the same vendor could supply both.

Adam Kahn, director of product marketing, Qualcomm Enterprise Services, sees a slight distinction between the concept of cloud computing and software-as-a-service (SaaS.) "Software-as-a-service is placing your application in the cloud environment and allowing your customer to use that product. Cloud computing is the delivery mechanism."

The term also encompasses consumer products as well as business services, points out Sean McCormick, product manager with Telogis, Aliso Viejo, Calif. For instance, someone who owns a personal tablet or mobile device may back his or her files up to "the cloud." At its most basic, McCormick says, cloud computing refers to the use of software, hardware, storage and computing infrastructure over a network that is housed and operated by a third party.

Some also make a distinction between public and private clouds. In a private cloud, the company that provides the software also maintains their own servers, which users access through a Web-based interface, says Christian Schenk, vice president of product marketing for XRS (formerly Xata). A public cloud would be like the service Amazon Cloud - software providers offer their products entirely in the cloud, using Amazon's servers and storage space. That's what XRS is doing with its new mobile platform.

2. You are probably already in the cloud.

In its widest definition, cloud computing encompasses many services fleets already use. Some technology providers have always operated in the cloud, but may not have defined it that way. "We were among the first to be Web-based," says Brian McLaughlin, president of PeopleNet, Minnetonka, Minn. "We were on the Web back in 1994, and that was a big risk for the founders to make. We are big believers in cloud-based computing. We were in the cloud before it was cool."

PCS Software, The Woodlands, Texas, has been offering a cloud-based transportation management system for a number of years. "There is nothing our on-premises application will do that our cloud-based version won't do," says Sean VanDyck, vice president sales for PCS.

VanDyck says more than 90% of the company's new clients opt for the cloud-based version of its transportation management system software.

If you use scorecards to monitor fuel economy, safety performance or other aspects of your business, chances are they are delivered in the cloud.

"More of our applications are being designed in the cloud environment," says Qualcomm's Kahn. "The hours of service, our workflow application, our portal, critical event reporting, all of our dashboards, all of our reporting tools are really cloud-based. It's really software-as-a-service."

3. The cloud isn't free.

A key benefit of cloud computing is that fleets can implement new technologies with little or no infrastructure cost. But there is a cost. In fact, in some cases, the price for cloud-based software might be more than a traditional on-premises version.

But the software price is just part of the cost of running traditional software, VanDyck points out. "Software is only a third of the total cost for a full-function [transportation management system]," he says. The rest of the cost is in infrastructure and the personnel to maintain the infrastructure.

"There are costs, but by another name," says Jon Bernstein, executive chairman of Cadec, Manchester, N.H. He explains that in the old model, a fleet bought a software license up front, then paid an annual software maintenance fee that was generally about 20% of the upfront fee. With the cloud- or Web-based version, there is no upfront license fee, but the annual maintenance fee has been replaced by a monthly subscription, usually based on the number of trucks/drivers, etc.

"It's slightly more expensive, but it is a win-win," Bernstein says. "We are reducing costs for our customers in that they don't have to maintain servers and pay people to write code for them. And the vendors, by writing it once for everyone and charging slightly more, have become more financially stable. Simply put, we've both saved on cost and gotten a better product."

4. The cloud offers tangible benefits, especially for growing companies.

Telogis's McCormick says the first benefit of cloud computing is lower total cost of ownership compared to software installed on a fleet's own computers, as explained above.

"When you install a piece of software on a computer in your office, that requires IT infrastructure, memory space and typically an expert to manage it throughout the organization," he says. "This gets even more complicated as you begin integrating different software applications together. SaaS takes care of that hassle for you, and is easy to integrate with other back office systems and programs through [integration software] provided by the vendor."

Cadec's Bernstein notes that "by hosting the servers ourselves, we've taken server maintenance away from our customers," and those servers always have the most up-to-date server software. "Every time we do an upgrade, we don't have to tell them to install the upgrade; we've already done it."

Plus, fleets can get access to more powerful computing and storage resources in the cloud, according to Fleet Risk Advisors' Jain. "You get more computing power bang for your buck."

Cloud-based solutions offer flexibility. "The user is not tied down to a specific computer at a specific desk," McCormick says. "They can access information from a computer at home or on the road."

That includes on a mobile device.

"Mobile is one of the core features of the cloud," Bernstein says. "If you send all the data from the vehicle first to one of our severs, we can provide technology that allows our customers to access that data at any level of their enterprise, with all the right controls, from any location in the world with an Internet connection. And that can be a cell phone, a desktop computer, a tablet computer, it can be anything."

It is much easier to add more computing power with the cloud as the business grows. "SaaS provides greater scalability," McCormick adds.

"It's really good for the very talented small carriers wanting to move from three trucks to 10 trucks," Kahn says. "Cloud-based offerings have really opened it up so fleets can get started with technology as a much smaller cost."

5. The cloud is not for everyone.

Not all fleets will embrace the cloud. While many may use Web-based applications such as scorecards or dashboards, they may decide it makes more sense for them to continue with their own IT infrastructure.

Adam Kahn says larger, complex companies involved in several types of business who need to have the capability to adjust their software to specific needs might not fare as well in the cloud.

Operations with multiple enterprise systems, such as transportation, warehousing, manufacturing, etc., may not benefit from a cloud environment.

"You have to ask yourself, 'Why move to the cloud?'" Jain says. "Typically, in a larger fleet you are hosting your enterprise application in a data center under your control. You already own the servers and applications; you have an IT staff that manages it. You use software from vendors and maybe software you developed. Why do you want to move to the cloud?"

Another drawback is that not all existing software packages can be migrated to the cloud as is. "We had to make some pretty drastic changes to our TMS to put it in the cloud," VanDyck says. Some existing software cannot be modified for the cloud and would require extensive modifications.

From a strictly personal standpoint, "there can be some psychological drawbacks," to the cloud, Bernstein said. "Some people are concerned about losing 'ownership' of their data." In reality, the data is there and it still belongs to the carrier, it is just being stored somewhere else.

That fact and concerns over security can make some people leery of the cloud.

"The cloud is an alternative to what you are doing now. But it needs to be what's right for you," says Ken Weinberg. "If you are going to lose sleep at night because your data is being stored someplace else, don't use the cloud."

6 questions to ask vendors about cloud offerings

Cloud computing is an evolving option for trucking companies. Before putting your business in the cloud, ask these questions:

1. Where are the servers located? Are they in the same office as the sales and marketing staff, or are they in a safe and secure environment? Most advise aTier 4 facility staffed by professionals.
2. How secure are the servers? What is their uptime? How many backups do they have?
3. How often are the servers upgraded? What happens during an upgrade?
4. Can the vendor's cloud grow with my business? How scalable is the software?
5. What kind of backup/redundancy/disaster plan do you have? What hap pens when the system goes down?
6. Who has access to my data and are there any restrictions to my access? How real-time is the access? How granular is the data that is stored? Can I use the data any way I want?

From the October 2012 issue of Heavy Duty Trucking magazine.