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What Cloud Computing Means to REALTOR® Associations

January 1, 2010

What if you never had to buy another software package for your association or another expensive server to store your electronic data? What if you never needed to hire IT consultants or pay an IT staff? What if your office was a streamlined, cable-free collection of laptops and iPads, requiring nothing more than Wi-Fi access to ensure complete productivity?

This is the promise of “cloud” computing: Every document, piece of data, and application—from your membership database to your word processing to your Web site management—living on the Internet. You rent access instead of buying software.

However, the hype surrounding technology’s latest buzzword may be larger than what cloud computing can deliver, right now at least. Even describing what exactly is cloud computing, is like trying to describe an individual cloud: it’s constantly shifting, moving, merging. Plus what is or isn’t “cloud” is being influenced by vendors, marketers, and the media.

“The cloud is complex because it is ill-defined,” says Mark Lesswing, chief technology officer and senior vice president for the NATIONAL ASSOCIATION OF REALTORS®. “Vendors may be prone to misuse its properties making it something that executives should research thoroughly before they invest.”

The “cloud” is actually several technologies working together with “virtualization” and “software-as-a-service” as distinct strategies, says Lesswing.

Yet today, adding to the confusion is the use of “cloud” simply as a metaphor for the Internet, according to the online encyclopedia Wikipedia.

Is it a cloud or a web?

REALTOR® associations and their members already do a fair amount of what’s being called cloud computing. One example of the cloud is your social networking on sites such as Facebook and MySpace. You go online to build your page, manage the members, post information—all without downloading anything to your own computer, and you can work on your Facebook page from anywhere, anytime.

On-the-go REALTORS® are already fans of online services for creating and viewing presentations (such as gotomeeting.com), transaction management (such as virtualofficebuilder.com), and maintaining their Web sites (such as wordpress.com), among other tasks.

For AEs, maintaining membership information in the clouds without some of the high costs and hassles of buying software and storage hardware is on the horizon. In fact, association management software is moving toward the cloud model with several popular vendors, including Rapattoni, Avectra, and LAMPS, already offering or planning versions of their products as a “service” online rather than traditional software.

“The ability to access data that is secure, maintained off-site, and available from anywhere with a Web browser will become mainstream,” says Bruce Lovett, vice president of marketing at Avectra, which has a product tailored for REALTOR® associations. “Maintaining documents and software on one’s own servers will seem archaic in the not-too-distant future.”

Benefits of the cloud approach

With a cloud solution, software and data are maintained by the vendor, who then becomes responsible for virus protection, security, upgrades, and disaster recovery. For vendors there are economies of scale that should translate into cost savings for customers.

More benefits to cloud computing—especially for small- and medium-size associations—are its scalability (you typically pay only for what you use and the space you need) and flexibility (you can rapidly and inexpensively add new features and options with the click of a mouse, instead of buying and installing a software upgrade package).

Additionally, accessing software based on a pay-as-you-go model can be easier to budget for than large initial software purchases and random vendor upgrades. “The benefit of consistent monthly billing for renting the service is that associations have predictable software pricing and don’t get hit with any additional upgrade, IT, or support costs,” says Lovett. Associations can even save on their office PCs, since computers used primarily to access the Internet don’t need to be as powerful—or expensive—as more traditional computers.

“That is the model we are moving toward,” said Ted Young, executive vice president for Rappatoni Corp. of SaaS technology. Rapattoni is working on the next generation of its NetMagic brand of association management software to include some virtualized services. “Now, people want the convenience of the Internet and the availability of the application anywhere.”

Question the cloud

Although not buying or maintaining servers or upgrading software is the lure of cloud services, there are downsides to consider, such as data security and what happens if your Internet connection goes down. Plus, cloud solutions often are a one-size-fits all offering where variations and customizations could add significant costs, if they’re available at all.

“Cloud services are great for the most outward-facing and standardized parts of the business, the things that customers expect everyone to have, such as Web site hosting, e-commerce solutions, and some basic customer relationship management,” says Jason Beatty, network systems administrator at the NATIONAL ASSOCIATION OF REALTORS®. “However, once you start moving inwards towards the core of your business, you start finding things that should differentiate you from your competition. All of those differences lead to customized workflows, and require a greater degree of control, personalization, and expertise to modify and tune as your business models change.”

Choose wisely

No new venture is without its risks. Your cloud computing experience will be only as good as the vendors with whom you choose to work. Do you trust them with your membership data? Can they guarantee business continuity? Do they have the hardware and technical staff required to service your changing needs? Will they provide a service contract that’s unambiguous, thorough, and fair? These are just some considerations. (Read more about cloud computing contracts and legal considerations here.)

CLOUD needs Unique to REALTOR® associations

When considering a cloud solution to your REALTOR® association management technology, there are unique points to consider. “Make sure that the vendor has the capability to integrate with NAR’s e-commerce solutions for processing dues payments and the National REALTORS® Database System,” says Lesswing. It is also essential to have the ability to share data with other REALTOR® systems, such as multiple listing or lockbox services. Finally, you want to be sure that your cloud solution has an interface with your association’s member-facing Web site.

Look for more association service vendors to develop products for an online environment and plan now to take advantage of this growing movement by educating yourself and your leadership.

**NAR’s Center for REALTOR® Technology offers free advice to AEs on technology selection and implementation through the CRT Outreach Initiative. Contact CRT at info@crt.realtors.org, 312/329-8651.

Association Management Resources:
Avectra: avectra.com
Cobalt: cobalt.net
LAMPS: lampusers.net
MarketLinx: marketlinx.com
Rapattoni: rapattoni.com