Should You Be In the Cloud?

One of the big new buzzwords is "The Cloud."  The term "cloud computing" can mean a few different things, including hardware virtualization, hardware colocation, software as a service and even web hosting.  Being "in the cloud" means different things in different applications, but its most basic meaning is this: farming out IT services to a third party. 

The aspect of cloud computing we'll look at here is the software piece.  Also known as
 “hosted applications,” software as a service means paying a third party to host a company's applications and then the company simply pays the third party for the service.  Some examples include:

• Enterprise-level systems like Microsoft Exchange or backup/disaster recovery systems
• General desktop applications like Microsoft Office
• Specific applications like time billing software for accounting and legal firms

There are four key ways that software as a service helps companies save money.

Hardware

Consider all the servers, network equipment, storage and other hardware required to run applications and serve them to the end user.  Now consider how, as apps become more complex and need more resources, better hardware becomes a necessity.  Finally, consider the electric bill for powering and cooling a room full of servers.  Over hardware's typical five year life cycle, the cost of one server can add up to the low five figures.  Subscribing to software as a service eliminates these costs.

Software

Software manufacturers are making a killing.  Don't even ask yourself why something as simple as MS Office Professional costs the same as a week or two of groceries, depending on whether you have teen boys.  You'll just get mad.  And that's just one copy.  Software assurance, licensing per seat and other charges are drive that price higher.  Cloud computing removes this cost.   It also removes allows for "right sizing," since cloud subscribers only pay for what they actually use on a per-user basis.

 

Maintenance

I might be hurting my own bottom line here, but I have to mention that software as a service saves on maintenance costs. There is no server hardware and software troubleshooting for IT staff to do here.  Your IT department would simply need to make sure the company's Internet connection is up and that your desktops are doing alright.  This could greatly free up your business' staff and allow them to plan projects and be proactive, not reactive, for a change.

Downtime

Outages cost money.  Hardware breakdowns, software glitches, spyware, viruses, even normal upgrades and maintenance all cause downtime and a huge cost impact.  Cloud services typically build redundancy into their systems, ensuring  uptime and eliminating outage costs.

So is Cloud Computing Right for My Business?

This depends on your business and its reliance on technology.  It also depends on the size of your company, number of servers and how critical your apps are.  I'd recommend evaluating all this based on the four cost-saving factors I've outlined here, and even contacting some cloud computing companies to get pricing and learn more.  If you need or advice and don't have an IT department to bounce ideas off, contact your local independent IT contractor.  CHEAP PLUG: If you're in Maryland, feel free to look me up. 

Thanks for reading!