FLINT TWP. — The forecast ahead for the business climate is cloudy but that could be a good thing.
So says Mike Klein, CO-CEO for Online Tech, a data management center with locations at 5225 Exchange Dr. and in Ann Arbor.
Cloud computing is one of several data center services Online Tech (OT) provides to a growing list of small and mid-sized business clients.
As guest speaker last week, at the West Flint Business Association monthly meeting, Klein talked about the applications and advantages of cloud computing including disaster recovery and high-level electronic data security protection, especially for healthcare, financial and retail companies.
On a basic level, cloud service moves data from physical hardware storage to software. It becomes a file that is readily accessible and manageable.
One practical application for residential use is off-site storage of photographs and other important records which makes them easily replaced after a catastrophe such as fire or theft.
More and more people are using cloud computing online whether they realize it or not, Klein said. He cited Netflix movies and iTunes music as examples of data files that are “stored in the cloud” and readily accessible for downloading to personal computing devices.
“Thirty-three percent of all Internet traffic from 9 o’clock at night to midnight is Netflix,’’ Klein said. “ Sixty-two percent of all Internet traffic from 9 to midnight is audio and video files being transferred from the Internet and half of that is Netflix,’’ he said, explaining how the movie rental service evolved from ordering tapes by mail to being able to easily access and download movies that are stored as files in the cloud.
Almost every software company now is looking for a strategy to move to the cloud, Klein said. The cloud computing market is expected to nearly double in size in the next three years with projected growth rising from $110 billion as of 2012 to $210 billion in 2016, Klein said.
Thirty-four percent of all It budgets are allocated to cloud computing a dramatic increase from about three and a half years ago when the number ranged from just five to nine percent.
That’s when Online Tech entered the market at a data center operator. OT started in 1994 as one of Michigan’s first internet service providers. In 2003, Klein’s partner bought the business and turned it into a managed data center.
When they implemented cloud service a few years ago they were able to downsize from having 23 physical hardware servers to just two which saves maintenance and energy costs and reduces the time it takes to perform computing tasks.
Online Tech has grown from 600 square feet in 2003 to 62,000 square feet of data center space. Over the past five years or so, the business has grown 30 to 35 percent each year, he said.
Two key factors driving growth are disaster recovery and what Klein calls Mission Critical. Mission critical reflects the need for businesses to have constant and instant Internet connection 24-7.
Similar to digital cameras (photo files) replacing film cameras and iTunes music files downloads replacing a CD purchases, loud computing file storage has the potential to someday replace home personal computers, Klein said. Household tasks like managing checking online and doing taxes paperlessly already is being done up in the cloud, Klein said.
OT services include working with healthcare business to meet HIPAA compliance (privacy protection of patient records) and working with retailers and others who do credit card processing and information storage.