With the recent revelations about the theft of customer data from The Home Depot, rarely has the threat of cybercrime reached so close to LBM dealers and distributors. This threat also is causing a dilemma for dealers, because it comes at a time in which dealers increasingly are getting rid of their hardware and moving their data into cloud computing systems and virtual private networks.

Will cyberattacks slow this trend? Perhaps a bit, particularly among old-line dealers who resisted moving because they put little trust in letting corporate records be stored outside the office. But other trends lead me to believe cloud computing will continue to grow—along with increased awareness of the need for security.

Specialization is one reason why. When I was a child the same person that poured the concrete, framed the house, installed the millwork, plumbing, and electrical. They did it all. But, as people became specialized, it made sense to give each part to an expert. It’s the same with IT. Today you need expertise in database management, security, and a host of other skills. One person at a small business rarely has all of those skills. We have a dealer now that we are speaking with that tried to install a very complicated network on its own. It now has nothing that works: It can’t print documents, there are speed issues, employees don’t know who to call, etc.

Given how increasingly complicated technology combines with increasingly sophisticated hacking to make an in-house IT department increasingly unlikely, we see cloud solutions, remote hosting, and IT consultants (disclosure: that includes my firm) offering ways to meet the challenge. But we’re not entering a dump-the-problem-on-us-and-run business environment. Dealers have a big role to play in managing their own systems, and we see evidence of this change in thinking already.

In the old days, people told us what they wanted their passwords to be and ordered us to never change them. Now they are happy we are changing every 90 days and have policies in place to enforce strong passwords and encryption of transmission of data. When I tell a CEO we are going to change every 90 days, they welcome it. That’s a far cry from the days when passwords were taped to terminals.

Attitudes toward disaster recovery also have changed. Dealers have long been known to do business after disasters based on handshakes and a cigar box to hold the cash. Now they don’t want to be down for one minute, so we have been adding redundancy to our hosted systems and mirroring all our clients activity in another data center in real time.

What’s next? I see these trends:

  • Debit Cards will decline in popularity as these transactions hit bank accounts right away. People will want the buffer that a credit card or house account provides.
  • We will see email mirrored accounts where when a salesperson leaves and he deletes all of his email and contacts, these will be pulled from the mirror server that has all of the history. This is in place now at some companies.
  • We will see two-layers authentication, where changing passwords will require a cell phone or other inbound device that will send a text with a code and have the password embedded. 

You can’t stop attacks from bad people, but you can put in simple programs to deter them. Time was when all scams came in over the phone or fax; now you usually get them via email. You’ve learned to adjust. With the trend toward cloud computing, those adjustments will continue.