By Jeffrey Steele, Contributing Editor
Manhattan Skyline, a New York City owner-operator of 2,500 apartments in the Big Apple, had considered moving to the cloud for several years. Then the company reached a kind of watershed that forced its hand, cloud-ward. “We were at the crossroads of purchasing new hardware, or alternatively choosing the cloud,” says company IT director Len Rosen. “We had some aging hardware, and we looked at hardware prices compared to the cost of going to the cloud. We decided it was worth giving [the cloud] a try.”
Manhattan Skyline recently began operating IBS 10i, a browser property management system. And while it’s too soon to definitively gauge the success of that move of business applications to the cloud, Rosen is encouraged. “The early results, both in uptime and financially, have been positive,” he says.
Manhattan Skyline isn’t alone. Throughout the industry, companies are adopting cloud computing for benefits that begin with hardware and software savings, and extend into areas like space utilization, redundancy and security.
Cloud computing refers to the centralization of applications and data in a place not local to the user, explains Mike Mullin, president of Totowa, N.J.-based IBS, which provides in-house real estate automation systems for commercial and residential real estate owners, developers and property managers. “There’s the public cloud, which Amazon, Microsoft and Google have, where you can log on and run your applications. Then there’s a private cloud, where you can rent space from a large provider, or have your own servers and application software stored in a facility that’s not your headquarters.” Cloud users avoid the need for hardware, software, backup, maintenance, “all those things that become difficult to obtain for businesses,” Mullin says.
How multifamily rates
Many property management firms are far-flung enterprises, with offices in numerous locations across a region or the nation. Cloud computing is ideal for such companies, so it’s no surprise multifamily has led in embracing the cloud. “The more distributed your computing requirements might be, the more likely you are going to be in the cloud,” Mullin says, noting multi-family companies tend to have 10- to 15-person staffs at a wide array of geographically-dispersed offices.
“A big problem we had in the late 1990s solved by the browser-based application is distributed data. No one had real-time data, and the big problem was how do we get this centralized so we don’t have to send in a floppy disk every week, and everyone can benefit from real-time data availability?” The multifamily housing industry has embraced an early form of the cloud for 10 or 12 years, Mullin continues. “It was once called software-as-a-service, but now has become known as the cloud.
“From a business application standpoint, our industry leads over most other industries,” adds Mullin. “Email, Word, Excel—we’re right where other industries are.” Myriad benefits can be gained from cloud-enabled centralized data collection, one being revenue management. The industry can take lessons from, for instance, the hospitality industry, which has employed revenue management for years to more efficiently price hotel rooms, Mullin reports. “There’s this new buzz floating around called Big Data,“ he adds. “There’s a big push on analyzing trends and pricing and usage, all those things we didn’t have the timely data on, the real-time stuff, that would have allowed us to make better decisions.”
Security issues have been a concern with the cloud, but technology is helping make enhanced security a reality. Mullin notes there are always security issues when dealing with computers, and the cloud exposes users to more. “But [there are] all the firewalls available to protect users. All providers are wrapping multiple levels of security around all the applications to provide greater control. And private virtual networks allow you to encrypt data back and forth.”
A user’s perspective
Once Manhattan Skyline chose cloud computing, company officials found it offered substantial benefits beyond the opportunity to avoid hardware and licensing expenditures. Not having to deal with “cooling, the electricity and the consumption of physical real estate by the hardware” was a big upside, Rosen says.
“We would also have instant redundancy, and hopefully more reliability,” he adds. “Our legal team did some due diligence as to how security was working, and we deemed it to be equal to or better than an on-premise solution. “Nothing is fully secure, and we understand that.”
The real clincher that Manhattan Skyline had made the right decision regarding cloud computing came after Hurricane Sandy’s devastating impact. “Realizing we were still up and running as a business, even though our physical space was not really functional, was the proof of the pudding,” Rosen says. “That has probably spurred more investigation on our part into additional use of the cloud, such as taking our phone service to the cloud. That additional interest is based on how well the cloud fared during and after that hurricane.”
What developments will be seen in the multi-family industry’s use of the cloud over the coming years? Mullin believes one significant trend will be a trickle-down from larger to smaller companies. In the industry, “you go from large owner-operators to very small companies, and you’ll see more of the smaller operators coming online,” he says.
“And how you‘re exposed to the cloud will become more seamless. The user interfaces will become much easier to use.”