Is Cloud Right for You?

by Katie Emmel May/June 2019
In our personal lives, many of us use cloud storage programs like Dropbox and Gmail to enable us to login anywhere and find our stuff. Equipment finance businesses, however, have often lagged behind, using outdated technological solutions for data storage. Katie Emmel examines some of the options companies have for moving into the cloud era, advising them to study their choices before picking the one that is right for their needs.

Cloud-based technology touches almost every aspect of our life, from consuming news and entertainment to travel to simply communicating and connecting with each other. The cloud surrounds us and serves as the connecting force between technology and our daily routines. Yet despite its often ubiquitous use in our personal lives, financial service companies of all sizes have been slower to adopt cloud as a delivery model to meet their business challenges.

Before we discuss the difference between applications operating in your data center versus cloud-based technologies, I want to clarify that ‘in the cloud’ is simply one way for users to consume a technology application. Keeping this in mind is important as you evaluate the best option for your company to consume business technology solutions in a manner that aligns with your business needs.


Today, there are three common ways of consuming business technology solutions: on-premise, hosted, or software-as-a-service (SaaS). Each option is designed to deliver highly available and secure applications that support business needs. In the asset and equipment finance space, solutions need to focus on the origination, underwriting, and portfolio management functions of booking, accounting, servicing, terminating, and remarketing. To make these core processes efficient and accurate, leading equipment finance firms have deployed purpose-built, system-of-record solutions that support the full-lifecycle management of a contract, and its associated assets. But which of these delivery models can best meet your business needs? And how do you effectively assess them?

On-premise deployment — with its ability to support high-speed data transfer — was the typical way to consume technology before the internet, and it is still actively utilized today. In this model, your business licenses technology, and applications are deployed and managed within your own datacenter. In this delivery model, you typically purchase, build out, and manage the underlying hardware and provide both application administration and technical support to users. Technology sits on your balance sheet as a depreciating asset.

The benefit of this approach is maximum control. It gives you the ability to keep applications and associated data in your datacenter behind your firewall, allowing for customization where needed. With this approach, your team is responsible for the uptime of the application and ensuring the security of your data and network. While this approach made sense before the internet, this model is quickly fading. When an application is housed in your datacenter, it becomes more complicated to make it accessible and usable for remote employees, contractors, and other authorized users outside your buildings. It can also be challenging to integrate your on-premise applications with customer or partner ecosystems. In many cases, providing “outside the walls” access and connectivity requires you to create a hybrid model that features an in-house proprietary cloud.


“Moving to the cloud” is a commonly used term, but the model and its benefits can look different in every company. If you’re considering a cloud delivery model, it is important to fully understand your options, because some “moves to the cloud” are efficient and non-disruptive, while others provide fewer benefits. Making the right choice for your company requires knowing the difference between hosting an application and a true SaaS model.

Hosted applications are similar to traditional on-premise deployments with one notable exception: a hosted application is installed on a server in an off-site location, and managed by a technology provider who either develops, sells or supports the application. In this approach, the expense of building a datacenter and management of the physical infrastructure is taken on by the hosting provider. Depending on the model, you as the customer may need to determine the hardware levels that support the hosted application and bear some of this expense.

What’s covered within a hosted delivery, and its positioning as a pseudo-cloud experience, can also vary based on the technology provider. A hosted model can maintain some of the control of on-premise delivery, with the transition of hardware management and potentially application management to the hosting company. But it offers few of the advantages of a true cloud experience, including rapid scalability. When choosing this model, it is imperative that you understand the provider’s approach to data center management, security, redundancy, availability, and disaster recovery, as well as your responsibility in the implementation, upgrade and management of your hosted application.

Software-as-a-service technology defines an application or service where the functionality is delivered seamlessly to connected devices on a subscription or pay-as-you-go basis. Similar to streaming services like Netflix or Spotify, selecting a SaaS model provides you with access to your desired functionality without technical concerns around how the solution is being delivered or who is responsible for its upkeep. In this model, the responsibility for managing and maintaining the underlying hardware, application, and connectivity reside with the service provider. Your company consumes the service, without having to devote ongoing resources and time to maintaining, upgrading, and securing it.

True software delivered as a service can be deployed to connected devices in a faster timeline than on-premise or hosted models. This is fueled by rapidly scaled, secure, and proven cloud platform providers, such as Amazon or Microsoft, enabling you to meet business needs via your SaaS solution quickly. This scalability can be achieved not only at initial delivery, but any time your business grows without the need to consider additional hardware needs or software licensing. Your SaaS service provider also manages your ongoing application needs and your software upgrades, allowing for ongoing deployment of new or configured functionality.


This is an important question you should consider when choosing a SaaS solution. SaaS technology can generally be broken down into two types: standard or private. The differences include where the data resides and how much flexibility your organization maintains to customize the application and the process. In a standard cloud, the application is maintained as a single entity whereby multiple tenants share hardware, storage, etc. In this model, all users of the application operate on the same released version of the software. A multi-tenant, standard cloud approach allows customers to share computing resources, while each tenant’s data is isolated and remains invisible to other tenants. The service provider manages regular SaaS upgrades, typically through an automated process. Those connected to the SaaS application would be on the latest features of the application, because of this ongoing maintenance.

For companies who want or have a specific need for a single tenant approach, a private cloud offers many of the benefits of a standard SaaS approach, but the application and the associated database are exclusive to the company subscribing to the service. The application still gets managed by the technology provider, with a large degree of scalability, but retains greater flexibility for customization, including functional elements and timing of upgrades. This is a good option for large companies who may have more specific requirements but want to consume technology in a SaaS deployment. The downside is private cloud options are generally more expensive.


Security needs to be a top concern when evaluating any delivery model, including a cloud-based technology. It’s important to remember that in our current business environment, even an on-premise deployment is typically connected to the internet for access by remote users, making security paramount. The use of cloud-based technology has rapidly accelerated across every industry, along with investment in tools to safeguard data. Cloud-based data is stored and overseen by cloud platform and service providers who are skilled in cloud-based applications and their security. In evaluating a move to cloud, there are a couple of key security considerations:

Documented Security Architecture. A technology provider delivering a cloud-based application should be able to document how the application is secured, including elements such as web application firewalls (WAF), network access control (NAC), and multi-factor authentication (MFA) for users. While you may not fully understand how each element protects your data, having the provider discuss its plan and infrastructure will give you a good general understanding of the process.

Security Certifications. There are several certifications in the market today that perform deep audits on cloud-based services. These certifications provide third-party verification that the provider building, implementing, and maintaining an application is in compliance with a core set of security standards. One well regarded audit used in the U.S. is the System and Organization Controls (SOC 2) report. Companies that undergo a SOC 2 audit are able to demonstrate the processes and controls in place to secure financial reporting. Once a company has achieved SOC 2 Type 2, the company has shown effective controls over time in providing security, availability, process integrity, confidentiality, and privacy.

Cloud is ingrained in our daily lives, providing an array of tangible benefits and removing friction in completing common tasks. Most personal transactions take place via cloud technology, and data that is most valuable to you is stored there. As an industry, it’s time we capitalize on the power of the cloud and put it to work to solve our business challenges and provide our customers with a better experience. Remember that just saying something is “in the cloud” doesn’t make it productive, secure, scalable or reliable. So, as you consider your transition to the cloud, be sure to understand the important distinctions, and their benefits. And seek technology partners who are willing to help you make informed and profitable decisions that solve your business needs.

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