Economic Conditions Push Management toward ‘the Cloud’

Cloud computing is ideally suited to property management, where many companies are highly decentralized.

History is replete with precedents nicely paralleling the recent mass move to cloud computing. One hundred years ago or more, many homeowners who drew water from private wells resisted the switch to a municipal water supply.

Decades later, a lot of folks still pooh-poohed the idea of depositing cash in banks. Stashing their savings in a mattress, they said, was a far safer strategy.

We’d laugh at these arguments today, just as converts to cloud computing snicker at the idea that once upon a time, organizations invested heavily in their own hardware, software, IT staffs and local networks, when they could have more quickly and affordably drawn applications “right off the cloud.”

And that’s not the only thing related to cloud computing that amuses Scott Wiener, senior vice president of IT with Yardi Systems. He also laughs at the notion that cloud computing, which refers to having applications delivered over the Internet as opposed to over a local network, is new.

“It’s been around a long time,” he says. “It was called ASP or Application Service Provider, and then it was called software-as-a-service. And now it’s called cloud. Why is it only now catching on?  The bad economy has made people take a [closer]  look at how to achieve greater cost savings.”

In fact, one might say if there’s anything really new about cloud computing it’s just that more folks are talking about it.

Wiener says he also hears his property management clients remark more and more often: “I’m not a technology expert; I’m a property manager.” That’s precisely why they’re embracing cloud computing. “They don’t have to understand the underlying technology to make it work. They just have to know which applications they want to use. They could replicate whatever a cloud provider might have, but they would need a large staff to do that.

“By taking it off the cloud, they don’t need all that expertise in the office. And there are time savings in knowing they have a predictable system.”

Like many who know cloud computing, Wiener has a hard time identifying any downsides to the technology. “In the past, it was about speed, and getting applications that weren’t designed to run on the Internet to run on the Internet,” he says. “But today, we have a lot of bandwidth, so there’s no problem there.”

Moreover, cloud computing is ideally suited to property management, where many companies are highly decentralized. It makes perfect sense for all those properties, and all those staff members, to have a single location to access applications, Wiener says. Cloud computing also serves the industry’s need for mobility. And the cloud allows quick and easy access to the many new software applications being expressly designed for property management.

According to Ty Brewer, vice president of operations for RealPage Inc., cloud computing’s open architecture meets the needs of more and more IT-savvy property managers.

“From property management’s perspective,“ says Brewer, “cloud computing can mean anything from obtaining the software through a software-as-a-service model, offering the benefits of a single code stream and open connectivity to other applications, to the outsourcing of their entire IT infrastructure needs to an expert that can provide superior service, on a scalable basis, at a fraction of the cost of running their own data center.”

If there are any reservations, they may come from those reluctant to relinquish control. “It’s the money-in-the-mattress mentality,” Wiener says. “They don’t want to hand over applications they always controlled to the cloud; they’re worried about who has access, and who can see it. But the industry has such experience working with the cloud; any problems of handling applications over the Internet have been worked out, in terms of security and access.”

No regret in moving to the cloud

The Hignell Companies of Chico, Calif., which manages 1,500 Northern California rental properties, is in its second year with cloud computing.

“It’s created a lot more flexibility, allowing us to be live and in real time with our remote sites,” Hignell President Phil Larios says. “There’s no delay in uploads. We were always behind time with our data when we were using the traditional approach. We’re now looking at what’s available in cloud computing for our project management and construction divisions.”

The University Glen Corporation, a Camarillo, Calif.-based auxiliary of California State University at Channel Islands that runs faculty and staff housing, among its other campus tasks, has been using cloud computing since 2004.

“It works great,” says Stephanie Barbabosa, director of housing. “You don’t have to worry about housing servers on-site, everything is Internet-based. [The providers] back everything up. They hire the technology staff, so that we don’t have to hire a tech person. And they do a lot of the work for us in terms of customizing our database. They’ll load software packages for us into the cloud.”

It’s the cost savings that most impress Barbabosa. “You don’t have the costs in hardware, software and staffing. I can’t say anything bad about it.”

Brewer of RealPage notes that some of the largest fee managers have moved to the cloud, and other property managers and site owners now have concrete examples of similarly situated companies attaining success with cloud computing. “We expect a significant portion of the multifamily housing industry will move to the cloud in the future,” Brewer says.

“[They’ll be] driven by a better understanding that cloud computing offers an entirely different platform and approach to the delivery of services.”

To comment on this story, email Diana Mosher at dmosher@multi-housingnews.com.