The Forecast is Cloudy!

Mar 2, 2016

When is the right time to consider a cloud strategy for your organization? Right now! In one way or another, you’re probably already using the cloud, and the question is really one of degrees.

Then: Everything Onsite

Many organizations grew through the years with the “server infrastructure” mentality. The premise is that you would buy and maintain all the IT resources your company requires, such as servers and software, onsite at your firm. Like any other technology, it required people to support it, and over the years it became increasingly complex and expensive as technology advanced.

Cloud Storage

Now: Smart Outsourcing

In the past 15 years we’ve seen a shift in the way a company organizes itself around technology. Instead of investing in that heavy internal infrastructure, companies have begun to identify targeted technologies where it makes more sense to outsource than to bring it in-house. It’s more efficient to write a check for a service subscription every month, than it is to spend the capital and ongoing staffing expense to build and support that same infrastructure by yourself. Indeed, as more innovative offerings are being brought to market, it’s possible for companies to eschew all internal infrastructure other than a laptop computer and a network connection.

Example: Email in the Cloud

Cloud Computing Concept

Cloud Computing Concept

A perfect example of an appropriate outsourcing decision is delegating your email services to Microsoft’s Office 365 service, rather than hosting your own Microsoft Exchange server. While not perfect, Office 365 works brilliantly for most people, and properly building and supporting one’s own Exchange server infrastructure is an extremely expensive and technical. Sure, anyone can throw an Exchange server together in 30 minutes, but that isn’t going to be secure or dependable, nor “done right and completely,” which is the standard by which I measure the viability of insourcing or outsourcing the service. If we are involved, the server is going to have a disaster recovery plan, regular backups, spam filtering, antivirus, and be kept up to date with the latest patches and releases from the software provider. This takes considerable manpower and resources to conduct correctly. If you have email in-house and you’re not spending this money for those services, it means your business is at risk.

Determining the Optimum Cloud Strategy

cloud_150-1For a company already invested in the “old way”, what is the best way to move forward? How do you know if it’s the “right time” to take the plunge and begin moving targeted services offsite? There are several factors that need to be analyzed before you make these choices.

Step 1

Examine your network infrastructure and work location of the majority of your workforce. Here are a couple of scenarios to consider:

Scenario 1

Majority of employees work remotely.

Solution

Consider a web-based application service for specific functions.

Scenario 2

Most employees work out of the main office, but the internet connection is not that good.

Solution

A heavy outsourced strategy may not be the right thing because nobody will be able to effectively use it.

Scenario 3

You have a good internet connection

Solution

  • Identify every piece of software currently being used by your firm
  • Determine if any of them have a web-based alternative.
  • Then analyze these alternatives against your business requirements.

Step 2

Evaluate how much your cloud strategy is going to cost you. Here are factors you need to keep in mind:

  • Ongoing software licensing costs
  • Hardware maintenance contracts
  • Electricity
  • HVAC
  • Internal and external IT staff and their associated overhead
  • Regular hardware upgrades and replacement

Now gather all this information in a spreadsheet and consider the Total Cost of Ownership over five years for all the different factors. Your answers should become pretty clear.

CloudSolutionsAnalysis-1

You Don’t Have to Do Everything Yourself

Perhaps the biggest argument for moving applications to the cloud is that it frees you to focus your energies on your core competencies. We hire accountants because it’s a vertical discipline, plumbers to fix the pipes, and contractors to build our buildings. Why wouldn’t we hire the best email company to provide email, and the best CRM software firm to provide that service, instead of trying to do it ourselves?

To me, a cloud strategy makes sense if approached methodically and with discipline. Above all, stay objective and don’t fall in love with the idea of moving everything to the cloud.

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