What is cloudwashing and why its crucial for businesses to avoid it

Published on 27 Feb 2021

The worldwide public cloud services market will be worth USD 257 billion in 2020[1]. Much of this growth is attributed to the increased need for organizations to support remote workers during the pandemic. As the use of Cloud SaaS services has increased a new phenomenon called cloud washing has emerged. Let's understand this term and learn what businesses need to do to protect themselves.

What is cloudwashing (also spelled cloud washing)?

Most enterprises today are aware of the benefits of cloud technology. Hence, when taking on new SaaS services they are looking for cloud solutions. This has prompted some vendors to run their legacy software in the cloud and misrepresent it as a 'true cloud' solution. This practice is known as cloudwashing. True cloud software is developed for an in the cloud. This type of software does not have versions and will not be available in an on-premise equivalent. Authentic true cloud solutions do not need to be run on specific hardware and can easily be scaled up or down to suit a business's requirements.

How to identify Cloudwashing?

This type of rebranding is most commonly seen in ERP (enterprise resource planning) software. Many companies in this area market their software as cloud solutions even though they were not truly built for the cloud. Below are some warning signs that businesses can use to identify cloud washing:

1. Overuse of the term 'Cloud'

Since cloudwashing is primarily a marketing gimmick it is most reflective in marketing material. These types of vendors will overuse the term cloud in a non-specific way. Be on the lookout for marketing jargon that uses a lot of buzzwords without providing clarity on how the software actually runs.

2. Custom integrations required

The biggest advantage of cloud-native software is that it does not require specific hardware or software to run. All of the code and processing will take place in the cloud, the end-user is only accessing the software's interface from their device. Therefore if the software you are evaluating requires a lot of custom integrations, you should be varied and explore why these integrations are needed? On rare occasions, some native cloud services may require custom integrations but this is typically driven by security or compliance requirements.

3. Lack of resource pooling

One of the key benefits of cloud computing is resource pooling. Unlike on-premise or virtual software that has limited resources, cloud services offer clients unlimited resources through pooling. What this means is that cloud services can adjust the resources made available to the client based on their usage. This way, if requirements increase, additional resources can be allocated without any interruption for the end client. Resource pooling is typically used for data storage, bandwidth usage, etc. Software that has been cloud washed will not be able to provide resource pooling.

4. Flexible billing

Flexible-billing is another big advantage of cloud software. Most cloud SaaS companies use a subscription billing model where clients pay-per-user. Pricing for additional features is typically tied to consumption. This means that businesses only have to pay for what they use. This reduces the chance of businesses paying for unused licenses, under-purchasing, or over-purchasing features.

There are several true-cloud native SaaS providers out there that can be extremely helpful for small and medium-sized businesses.

See also: Twitter Expands Partnership with Google: Will move more processes to Google Cloud 

Top cloud service providers by function:

Project Management

  1. Asana: This cloud-based service allows employees to track communication on a project, create and assign tasks as well as collaborate more effectively.
  2. Trello: Trello provides users with a visual overview of task progress. Users can see what is currently being worked on, who is working on it, and the current status of the overall project.
  3. Basecamp: A web-based project management platform. It has received high praise for its paper-based UX design. It has a broad range of features that can be used for effective project management and collaboration.

Customer Relationship Management (CRM)

  1. Salesforce: one of the most popular albeit expensive CRMs in the world today. The software has a variety of solutions and features. Businesses can customize the solutions they purchase based on their needs. Salesforce makes it easier for marketing, sales and support teams to stay in sync when it comes to customer communication.
  2. HubSpot: A highly effective lead management tool. It helps bridge the gap between marketing and sales. The tool allows users to categorize leads into contacts, deals, and companies. Users can switch between the tool's marketing and CRM features as needed. Read a full HubSpot CRM tool review.
  3. Nimble: Targeted at small and medium-sized businesses, Nimble helps companies simplify and manage their social presence. It allows businesses to consolidate information and communication about individual customers in one place.

Human Resource Management (HRM)

  1. BambooHR: Easy to use BambooHR is a popular HRM tool that has an intuitive interface. Its self-reporting and document storage features make it a robust HRM tool for businesses of all sizes.
  2. Zoho People: A comprehensive HRM solution, Zoho People has solutions to cater to a wide variety of HR functions. Some of these include, leave management, performance management, time trackers, and more. Read a full review of Zoho people.
  3. Sage Business Cloud People: This solution is specifically designed for large corporations that have operations in foreign countries. The tool provides HR professionals with full visibility of their global workforce.

Cloud solutions are extremely efficient and have significant business advantages. However, to take full advantage of this technology businesses need to ensure that they are signing up for true cloud-native service and avoid the traps of cloud washing.

Also Read:

9 Must-Have Features in a Cloud Business Process Management (BPM) Solution

5 Google Photos alternatives, as Google to end free unlimited cloud storage

1. July 2020, "Gartner Forecasts Worldwide Public Cloud Revenue to Grow 6.3% in 2020", Gartner, [available online] https://www.gartner.com/en/newsroom/press-releases/2020-07-23-gartner-forecasts-worldwide-public-cloud-revenue-to-grow-6point3-percent-in-2020 [accessed Mar 2021]

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