from First Quarter 2010
Corporate Board Member
by Bonnie Azab Powell
There’s a sea change under way in technology. Wired magazine recently labeled it “the good enough revolution,” saying that consumers now look for “flexibility over high fidelity, convenience over features, quick and dirty over slow and polished.” Think of how the iPhone has replaced expensive digital cameras, portable stereos, and video cameras. And while Wired was talking about the gadgets and software that individual consumers are going for, the same technology—cloud computing—offers the same benefits to business. It does so, moreover, at enormous cost savings, which should appeal to directors eyeing their company’s future IT needs and wondering how they’ll ever pay for them.
Cloud computing lets you bypass your company servers, with all the fuss and hassle they so often impose, and go directly to the Web for everyday applications ranging from e-mail to billing services to boardroom-material management programs. Not only is this a heck of a lot nimbler, it’s also much less expensive to set up, maintain, and update. For one thing, you’re off the financial hook for pricey licensing deals. Instead you subscribe, monthly or yearly, to software services that are hosted and administered by somebody else—paying only for features you actually use. Some directors may already be using cloud computing on their own account without knowing it. Think Gmail, Google’s e-mail system, which comes to its subscribers by cloud. Or Netflix. If you watch rented movies streamed to your home rather than delivered by mail as DVDs, you’re a cloud beneficiary too.
At the more sophisticated end of cloud computing is Amazon.com’s Elastic Compute Cloud. Client companies—big organizations whose business is information technology—rent this particular “software as a service” (or SaaS, as it’s known) by the hour to do such things as test their own applications or run mission-critical data centers.
So far only a handful of companies have adopted cloud computing for basic business functions, among them Fairchild Semiconductor, Genentech, and Motorola. All three subscribe to Google services that offer not only electronic mail but also software for operating shared calendars and drafting documents by means of real-time collaboration, among other things. Google is one of its own customers too. But plenty of board members and top executives at companies that haven’t officially adopted cloud computing are toying with it as individuals—very likely the same men and women you see tweeting from their iPhones during slow moments at board meetings.
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“Everybody who’s using cloud computing just loves it. Even the professors on the boards.”
-Mamoon Hamid, Venture capitalist |
In the main, though, it’s the folk involved with smaller companies—as venture capitalists, founders, directors—who are blazing the cloud-computing trail, as they have in most of technology’s advances. Case in point: Mamoon Hamid, 31, who’s a principal at U.S. Venture Partners, an investment firm in Menlo Park, California, and a director of Box.net, a start-up that provides cloud services for more than 3.5 million users, including individuals, small businesses, and Fortune 1,000 companies. The board members of Box.net, in which USVP invested several million dollars two years ago, use a cloud-based file-management system that makes it easier for them to be effective. Hamid, other directors, and members of his investment firm can open, read, and comment on all kinds of documents—from their iPhones if they so choose, an option Hamid often goes for.
He was so impressed at how all this technology had simplified his board work at Box.net that he advised another of his firm’s portfolio companies, CFX Battery, to become a Box.net subscriber as well. The verdict from the boardrooms? “Everybody who’s using cloud computing just loves it,” Hamid says. “Even the professor types on the boards. They think it’s cool because it cuts down on the barrage of files and information that we receive daily, which can be just unmanageable.”
Now USVP itself is getting into the cloud act, albeit cautiously. “Like most financial-services firms concerned about data privacy, the outfit has been very conservative about the kinds of information technology it has adopted,” says Hamid. The evolution of cloud security has essentially laid those concerns to rest. These days the venture firm’s partners use Box.net’s virtual workspace to create, upload, and access sensitive due-diligence materials (company financials, market research, call notes, and other confidential files) for potential investments. In the old days, the lead partner on a deal would create a shared drive or folder on the company’s internal server and have to ask the IT staff to restrict who could access it. Now, with just a few clicks on a website, the lead partner can specify who can edit and who can merely view the various items on the shared site, plus determine who should be notified whenever the information is updated. And all the material is available securely to the appropriate people, whether they’re in the office, at home, or on the road.
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