Send in the Cloud: A Look at Cloud Computing and Multifamily

By Jeffrey Steele, Contributing Editor

The term cloud computing refers to what is essentially a shift in thinking about computing, that it should be viewed as a service rather than a product, says Josh Albrechtsen, director of project management for Property Solutions.

“The old mindset was you had to buy servers, buy a software program, install it and staff IT resources to maintain that setup,” says Albrechtsen, whose Provo, Utah-based company develops cloud-based software programs.

“Cloud service providers allow companies’ IT staff to work on things that are more of a value-add than website development,” he adds.

Early on, the property management industry anticipated companies could go paperless within three to five years of switching to the cloud, and would also realize a concomitant steep reduction in workforce costs. “I’m not sure a lot of companies have realized either of these benefits,” says Albrechtsen. “IT management at many companies in the industry would agree that gains in these categories have not been as swift as originally anticipated.”

A myth that has slowed adoption is that due to their being on the Internet, cloud solutions are accompanied by security exposure, points out Brian Galla, director of technology at Santa Barbara, Calif.-based Yardi Systems. “In fact, cloud solutions are more secure, as a result of talent specifically responsible for technology.”

Achievable through the cloud

Organizations with geographically dispersed workforces can benefit almost immediately from moving to the cloud, says Michael Cohn, founder and senior vice president of Atlanta-based Cloud Sherpas, one of the world’s largest Google Apps cloud service providers.

“First, rather than having on-premise infrastructure at any of those properties, you no longer need a server at the properties to run your email. All you need is an Internet connection,” Cohn explains.

“Second, all those folks out there in the field may be using any number of different devices. It’s not just laptops connecting to the Internet, but now we have smart phones and tablet computing. There are so many ways you can remain connected. With Google Apps, the software has been written to support all these devices. All you need is a web browser, and you can have the exact experiences with all these devices connected to the cloud.”

Moreover, he says, there’s no need to ever delete emails as capacity is neared, because the capacity of the cloud is 50 times that of legacy email servers. “And if your [mobile] device is ever lost, you don’t lose any of your data,” Cohn says. “You can be back up and running without skipping a beat.”

Albrechtsen also stresses the mobility benefits the cloud offers. “You can be completely mobile and still collect data that is then synced back into your mobile database,” he says, citing guest cards, applications, leases, payments and maintenance requests. Property Solutions offers a tablet solution that allows companies to handle leasing functions from an iPad, an area that is expected to generate increasing interest in the years ahead.

More forward-looking is the notion that property-level staff will someday do most of their daily work on tablets or smart phones. Maintenance staff may schedule work and manage inventory this way.

Payment acceptance through the cloud is one of the technology’s most significant benefits, Albrechtsen adds. The traditional payment method called for acceptance of residents’ checks in the leasing office. But in the last few years, many property management firms have adopted cloud-based rent collection models. The number of payments transacted distributes costs, making cloud-based receipts more cost-effective, he says.

The cloud also lets property management companies assign website development and hosting, at both corporate and property levels, to vendors instead of handling it themselves, Albrechtsen says.

An overarching advantage

Cost has been the chief factor behind adoption, Cohn says. It costs about $400 per employee per year to maintain legacy solutions; Google Apps costs $50 per user per year. “We’re talking enormous savings, while you innovate at the same time,” he says.

The cost savings can best be understood by recognizing that the cloud is a distributed computing model, Albrechtsen adds. “You have one platform at a cloud services vendor, such as Property Solutions, serving multiple clients.  That distributes cost of service, as opposed to having internal servers and taking on those costs yourself at the property management company level.”

For his part, Galla believes the number of cloud solutions in property management will continue to swell as technology solutions supplant human or paper solutions. “As the demand for technology-based interaction by the apartment renter increases,” he says, “cloud solutions will continue to be the most economical—and most practical.”