By Peter Filice, Senior Consultant
During the last 10 years, cloud-based solutions have become the dominant trend in the IT world for applications, services, and platforms. End-point and edge devices have become smarter, high-speed networking is more available, affordable and easier to implement, and on-site data centers and software have moved to off-site cloud data centers from Amazon, Microsoft, Google and others. This trend, however, is just beginning to be seen in parking technology. It’s important for parking managers and operators to understand how cloud applications and services will impact them so they can make smart, informed choices and navigate potential challenges. This article will educate readers on basic cloud computing concepts, indicate how cloud can be applied to parking solutions, summarize parking technology solutions that are already cloud-based, and highlight key issues and potential pitfalls that organizations need to understand about this migration.
Cloud Computing and Software-as-a-Service Fundamentals
Let’s begin by briefly defining Cloud Computing and its close relative Software-as-a-Service (SaaS). Wikipedia  offers the following overview definition:
“Cloud computing is the on-demand availability of computer system resources, especially data storage (cloud storage) and computing power, without direct active management by the user. The term is generally used to describe data centers available to many users over the Internet. Large clouds, predominant today, often have functions distributed over multiple locations from central servers. If the connection to the user is relatively close, it may be designated an edge server.
“Clouds may be limited to a single organization (enterprise clouds) or be available to many organizations (public cloud). Cloud computing relies on sharing of resources to achieve coherence and economies of scale. Advocates of public and hybrid clouds note that cloud computing allows companies to avoid or minimize up-front IT infrastructure costs. Proponents also claim that cloud computing allows enterprises to get their applications up and running faster, with improved manageability and less maintenance, and that it enables IT teams to more rapidly adjust resources to meet fluctuating and unpredictable demand, providing the burst computing capability: high computing power at certain periods of peak demand.
“The availability of high-capacity networks, low-cost computers and storage devices as well as the widespread adoption of hardware virtualization, service-oriented architecture and autonomic and utility computing has led to the growth in cloud computing.”
Here is a simplified diagram  depicting several types of cloud architectures that may be utilized singly or jointly.
Software-as-a-Service, or SaaS, is the typical offering and pricing model that technology vendors utilize to offer their cloud computing services or solutions to customers and partners. Sometimes, SaaS is referred to by the more generic acronym “XaaS,” where “X” can mean several things – Software, Hardware, Platform, Database, Middleware, Compute, etc. In all cases, these acronyms refer to a pricing and delivery model in which the end-customer does not own the software licenses and/or hardware platforms but purchases specific “services” as needed on a recurring expense basis, usually monthly or annually.
Product solution vendors have increasingly moved their architecture and delivery model to some form of cloud architecture over the last 10 years. In the general IT industry, cloud has become the predominant delivery model. In the parking technology area, migration to cloud has been slower, but it has been picking up steam over the last 2-3 years. There are now some parking technology vendors who offer only cloud-based solutions, others who offer a choice of cloud or on-premises based, and a few who still offer only on-premises systems or variants of on-premises systems that move the server off-site but which are not really cloud-based as defined above. Let’s take a closer look at parking technology cloud migration trends.
Parking Technology Cloud Migration Trends
Until 2-3 years ago, most parking technology vendors provided solutions solely in an “on-premises” model, meaning that all software and hardware resides on-site at the parking facility location or nearby in an IT room. As overall cloud adoption has increased across all technology sectors, parking technology has started to follow suit. On the one hand, on-premises systems present some advantages:
- They are easy to touch and see to verify if they are working.
- They are completely within the control of the customer or operator and can be kept secure with proper measures.
- They do not rely heavily on remote communications networks and are not generally subject to internet outages.
- Once purchased, they generally need only limited ongoing maintenance so recurring expenses are generally low to moderate.
On the other hand, parking managers and operators are well aware of the challenges that accompany on-site hardware and software:
- Room must be found to host the hardware in a suitably secure and climate-controlled space, with appropriately reliable electricity.
- Hardware must be maintained, repaired and occasionally upgraded.
- Underlying components of the system software, such as the Microsoft Windows operating system, must be kept current and in some cases replaced when no longer supported by the original software vendor.
- At some point, the system must be replaced leading to a new capital expenditure – sometimes higher than predicted or available in the budget
In response to these challenges, some parking technology vendors initially began to offer certain optional system software packages (such as reporting or business analytics) in the cloud with SaaS pricing, while the core software and hardware remained on-site. This is a so-called “hybrid cloud” solution. Over time, some vendors have gone further and have migrated fully to cloud by moving all central server and software components of Parking Access and Revenue Control Systems (PARCS) and Automated Parking Guidance Systems (APGS) into the cloud, again with SaaS-based pricing on a monthly or annual basis. Some of these vendors still offer either on-premises or cloud-based solutions, while others are offering only a cloud-based model.
Of course, in all cases, some components of PARCS and APGS systems must still physically reside on site, such as entry/exit stations, pay stations, parking occupancy sensors, digital signage, etc. Nonetheless, some vendors have recently even taken the XaaS model further by offering “Hardware-as-a-Service,” in which the vendor provides the on-site hardware and all associated maintenance under a monthly or annual service fee (essentially a version of an equipment lease).
All of these approaches offer new creative alternatives as well as posing new questions and challenges for parking customers and operators. Let’s now explore some actual vendor examples in both the PARCS and APGS spaces.
Examples of Cloud-Based PARCS and APGS Solutions
For illustrative purposes, here are several examples of vendor solution architectures which are either inherently cloud-based or offer a cloud-based option. As noted above, it isn’t actually possible for every component of a PARCS or APGS system to be “in the cloud” because some parts of the system are physical devices that must reside on the customer site.
With PARCS, the portion of the system that resides in the cloud is usually the main PARCS software and reporting and analytics functions. In a cloud-based PARCS, the on-premises components such as entry/exit stations, pay-on-foot machines, and so forth are connected directly to the cloud across secure internet sessions. All of the PARCS processing (e.g. payments, credential validations, etc.) is done in the cloud. Here are just two examples of PARCS solutions that are cloud-based; several other vendors are also offering similar approaches.
Similarly, in an APGS, the system still needs to have some on-premises components such as space or lot counting sensors, digital signage, etc. However, some APGS vendors have moved to architectures in which those “edge devices” are directly cloud-connected, often via a cellular data network. In this case, the aggregation of count data and control of digital signage all occurs from the cloud.
Cloud is not a Panacea – and not all Cloud Solutions are Created Equal
So, should parking customers and operators migrate immediately to cloud-based solutions? Are on-premises solutions a thing of the past? And are all cloud-based solutions created equal? As you would expect, there are no absolute right or wrong answers to these questions. Among other things, some cloud solutions are relatively new and not widely proven, and additionally some solutions claiming to be “cloud” actually are not. There are also financial considerations that need to be carefully understood. Let’s discuss some of these issues and then wrap-up with some high-value questions that customers and operators can ask vendors when considering moving to cloud.
- Some solutions claiming to be “cloud” actually are not. For example, a solution that simply moves a customer-owned server offsite to a co-location data center is not cloud – it’s simply off-site hosting. While the customer does not have to provide an IT facility to host the server, they still own the server. Another example is a vendor who claims to have created their own “cloud” when in fact they are just operating a hosted server farm with a series of servers, each of which is dedicated to one customer. While these approaches may be marketed as “cloud” and may appear as cloud in some ways to the customer, they do not take advantage of true cloud-based architectures and do not have the same scalability, support and cost benefits.
- Some solutions that are an actual cloud architecture may not use industry-leading cloud services providers like Amazon Web Services (AWS), Microsoft Azure, etc. as the foundation of their cloud, choosing to implement their own proprietary cloud services platform. This approach has risks associated with any proprietary solution, not to mention cannot offer the kind of broad support and wide technology choices of an industry-leading cloud platform. Even when an industry-leading cloud platform is used, that is not a guarantee that best practices are being followed. For example, there was a former parking software vendor using AWS solely as a raw computing platform, while the customer data was all co-mingled in a single open source database. Such an approach is extremely insecure and unstable. Also, some cloud-based approaches may not take full advantage of so-called “multi-tenant” architectures, instead starting a separate cloud instance for each customer. Such an approach may be acceptable, but it doesn’t take full advantage of cloud scalability. Unless you ask your vendor probing questions, you may not discover poor or sub-optimal practices and you will not understand if their experience with cloud-based solutions is strong or minimal.
- Some cloud solutions may introduce latency (delays) into PARCS transactions or APGS count displays, because these data exchanges have to make a round-trip network connection to the cloud instance, which may be located hundreds of miles away. Properly implemented cloud solutions that use high-bandwidth, low latency network connections can avoid these issues.
- Parking managers and operators need to “run the numbers” and understand the financial tradeoffs between a cloud approach with monthly or annual recurring SaaS charges (normally treated as recurring operating expense) vs. an up-front on-premises purchase (usually treated as a capital purchase). Depending on the sources of funding and the financial metrics for each customer or project, one approach may be more advantageous than the other. Note that some cloud vendors offer multi-year SaaS pricing models that can approximate a capital purchase model by allowing a significant discount up-front in exchange for a pre-paid multi-year SaaS agreement.
- Carefully consider issues of data ownership and security when moving to a cloud-based approach. As the parking customer, you should ensure that all ownership of your parking system data resides with you whether it is stored on-premises or in an off-premises cloud. It’s your data and moving it to the cloud doesn’t change that! In that same vein, it is important to ensure that your data is secure when it is passing from your site over the internet and into cloud-based applications and data stores. Cloud-based PARCS and APGS providers need to provide assurance that they are following industry best practices when it comes to security, data partitioning, data integrity and backup, and data ownership. Lastly, you should be allowed to remove or copy your data off the cloud platform without penalty should you switch vendors in the future.
Questions to Ask When Considering Cloud-based Parking Solutions
Here are some useful, high-value questions to ask when considering a cloud-based parking technology solution.
- What is the underlying architecture of your cloud solution? Does your solution use a shared (also known as “multi-tenant”) instance approach or do you start up a separate cloud instance for each customer? Is your solution truly cloud-based or just hosted? Ask for a detailed architecture diagram and verify you are getting an actual cloud-based solution, as discussed in the previous section.
- Do you also offer a “Hardware-as-a-Service” option for those PARCS/APGS components that must still physically reside on my site?
- Does the architecture diagram indicate the use of on-premises data processing? Such devices may be labeled “lane controllers”, “data appliances” or other similar euphemisms. Evaluate whether these devices may need maintenance such as UPS service, OS updates, system redundancy, or data backup and if so, how that affects the value of the proposed cloud solution.
- Is your solution built on top of a major cloud platform such as AWS, Azure, Google Cloud, or Oracle Cloud? If so, which one and what exact cloud services are you using from that platform for compute, database, security, etc.?
- How is my data stored and how is it partitioned from other customers’ data? Do I retain full and exclusive ownership of all my data?
- How do you implement and ensure security of my data? For PARCS vendors, is your cloud solution compliant with the latest PCI security standards including P2PE?
- How do you ensure that your cloud solution does not add excessive latency that will impact my parking customers’ experience?
- What sort of networking is needed between my site and your cloud center(s)? Who provides this network?
- What is your cloud-based SaaS pricing model? Do you offer discounts for multi-year SaaS agreements?
- What happens if and when I terminate my SaaS contract? How do I obtain my data, and will it be in a portable format?
Walker Consultants applies best practices when assisting clients in specifying, evaluating and testing parking technology solutions. We can provide specific expertise around cloud-based solutions. By applying the knowledge and best practices as outlined in this article, customers can make informed choices when considering cloud-based parking solutions such as PARCS and APGS.
About the Author
Based out of Walker’s San Francisco office and as a member of Walker’s Consulting Resources Group, Peter Filice covers Northern California and the Pacific Northwest with expertise in parking technology solutions across multiple vertical markets — municipal, university, commercial garages, hotel, event and stadium, on-street, mixed-use, and airport. In particular, Filice has deep expertise in Automated Parking Guidance Systems (APGS).
 Source: Wikipedia, CC-BY-SA 3.0, Sam Johnston: en.wikipedia.org/wiki/Cloud_computing#/media/File:Cloud_computing_types.svg
Figures provided by PARCS/APGS vendors are used with permission and are for illustrative purposes only. Inclusion of these figures does not constitute an endorsement of these vendors.