Certainly New Carrollton, Texas-based vendor RealPage had those benefits in mind when the company announced last September that it was creating a cloud computing division with the capability to host entire multifamily data systems—regardless of vendor or application—within its cloud. This essentially amounts to giving users virtual server access to the company’s two data centers, which offer real-time disaster recovery across some 300 terabytes of available storage.
Up in the Air
Moving multifamily IT applications to Software as a Service (SaaS) and cloud computing platforms can boost efficiencies, but may require surrendering an amount of control. Consider these three factors when deciding how virtual you want your shop to get.
1 Cost Containment. Cloud computing platforms can drastically eliminate the need for ongoing hardware and IT maintenance personnel investments. Still, SaaS and ASP hosting are not free, and you might be able to host programs yourself at lower costs if you already have the server capacity and existing IT infrastructure.
2 Operations and Updates. Relying on SaaS and cloud computing can make software updating and general system maintenance a thing of the past. But while hosts will take care of the application improvements—so you won’t have to worry about installations—the ability to make specialized code changes or even build enterprise technologies continues to remain within the user’s domain.
3 System Security. The top multifamily technology vendors offer security certificates and highly-encrypted data transfers that rival any industry enterprise system, but critics of cloud computing still caution buyers to beware when it comes to housing personal information identifiers (PII), confidential or private information, or strategic corporate data on third-party servers.
“Multifamily IT departments are spending about 80 percent of their time on tactical initiatives and only 20 percent on strategic initiatives,” says RealPage CEO and president Steve Winn. “There are a lot of other things IT could be doing to improve the operations and efficiencies of a multifamily company, but at the end of the day, there is not a lot of time left over after server maintenance, updating software, and all of the other tactical components that are consuming their time.”
Santa Barbara, Calif.-based Yardi has likewise seen approximately 80 percent of its user base migrate towards the company’s ASP hosting services in an effort to not only contain IT costs but to free up tech resources for more strategic endeavors. “IT distracts from the core real estate business focus,” says Scott Weiner, Yardi’s vice president of information technology. “An ASP-hosted client does not have to provide its own IT network staff and resources to use its primary business system. They avoid all of the capital investment of server infrastructure, bandwidth, and staff that would be associated with self-hosting.”
The Cloud is Still Cloudy
What specifically defines the difference between SaaS and cloud computing still seems to be up in the air, however. Most industry tech observers seem to agree that SaaS is a Web-based, single-code software platform or application that can live in either an internal data center environment or be hosted via ASP, while cloud computing refers to a virtualized server environment that includes both core and ancillary applications hosted and/or managed by administrators within the cloud environment and delivered over a single application programming interface (API).
“Who cares if it is SaaS or cloud computing? The terms and buzz words don’t necessarily matter,” says Matthew Stoehr, CIO for Santa Ana, Calif.-based real estate investment firm Grubb & Ellis. “What matters is how you are consuming the technology because traditional IT departments are going away. You are going to have more of your technology hosted by cloud and SaaS providers, and there is going to be less need to have daily operational IT people in your office. Instead, those staffs will be more integrative and consultative about selecting the technologies that are right for the business and facilitating and integrating those technologies together.”
Not everyone is completely sold on the cloud computing promise, however. Irvine, Calif.-based Western National vice president of information technology Ken Hodges emerged from the same NMHC technology roundtable as Kenney with a similar perspective on budget constraints but a divergent opinion on moving his company’s data center and systems into a cloud. “The dirty little secret is that it is going to cost money to move to a cloud or SaaS platform,” Hodges says. “Burning that initial expense of hard and soft monies could take a couple of years, and then what if you want to move it all back in-house? Then you go through the expense again.”
Hodges also points to security and confidentiality concerns when it comes to housing sensitive, private information about customers or corporately-competitive data on a third-party data server. While most multifamily vendors provide securitization and confidentiality that meets the expectations of industry CIOs, homogeneity of SaaS and cloud applications also remains a concern.
“You are always going to give up something by going to SaaS or the cloud, whether it is programming control or the homogenization of your strategic operations because you are using the same platform as everyone else,” Hodges says. “As far as Western National is concerned, we like customizable control and the ability to make changes quickly in-house. That’s just the way we do things.”
