Without a shadow of a doubt the current buzz word for SMEs when discussing Business IT is the “Cloud”.
The cloud does carry some positive connotation. It's meant to be cheap, your data is accessible from anywhere in the world and everything is managed for you. Sounds fantastic right?
The fact of the matter is, when it sounds too good to be true it generally is. Don't get me wrong, the cloud has some great solutions (see our post about great cloud based email hosting here), we use it heavily at Intuitive, but overall, the cloud is very immature for most SMEs to jump straight in.
In this post I'm going to discuss a case study for one of our clients that wanted to embrace the cloud but discovered they were not ready for the change.
Company X, like most SMEs wanted to find efficiencies in their IT costs. Their Microsoft SBS Server had served them well but was ageing and it was time for replacement. They used the mail service, file sharing and remote access service to their full potential and had received advise from external counsel that the cloud was ready for them.
We explained the 3 myths of moving to the cloud:
The cloud will be cheaper
We'll work the way we always did
The cloud is faster
And they said that they were ready to change the way they worked, understood the risks, even though our recommendation was to replace the server with a new one.
Why did we recommend a new server? I'll answer that question by addressing each of the myths.
The cloud will be cheaper
We provided company X a spreadsheet with 3 quotes side by side. New server, partial cloud, and full cloud.
The cloud can provide monthly costs to your IT Needs which is great for cashflow especially when compared to purchasing new hardware but your cost increases in two key areas:
Internet costs – when you work on a server, 90% of your network traffic is local. When you move to the cloud, 90% of your traffic has to go through the Internet. So you need to ensure your bandwidth and data quota can deal with this and most SMEs need to upgrade their internet connection to do this.
Training and change over costs – with your new cloud based application you need to train your staff on how to use them. There is also a productivity cost to account for. When staff are in training or initially using the new software, there is a hit to their productivity. This is hard to measure but is certainly a factor.
Taking this factors into account, the cost over a 4 year period had the cloud ahead on savings, but not the large savings that were expected.
This lead to the thinking “well if it's going to cost about the same, let's move partially to the cloud so our staff can continue to work as they always have and we can realise some of the cost benefits.” This leads into myth 2:
We can keep working the way we always have
This seems like a good compromise doesn't it? We'll have Google hosting our mail, a file syncing service sharing our files and we'll continue to use Word, Excel and Outlook as our productivity applications.
Well it sounds great in theory but doesn't work that way in a real business environment. You see this company used to share contacts through their email server and expected the same from Google Apps. Unfortunately, this rather fundamental requirement was not (and is still not available) through Google's core offering. Instead, we needed to find a plugin that provided this functionality, and find one we did. However plugins do not always perform as expected. They are vulnerable to Google “changing the goal posts” as happens from time to time.
Another example is cloud based file syncing software. A great tool in theory and certainly does have its applications. However, a business environment generally requires immediate access to shared documents and that isn't the case with syncing software. You have to wait for the person updating/creating the file to save it, have it sync to the cloud and then sync down to everyone's computers again.
Speed isn't even the biggest concern. The biggest issue is each person's computer is not aware if someone else has that file open. This means that if you person A opens and adjusts that Excel document while person B is already in it making changes, then when both people save the document we will have 2 copies; otherwise known as conflicted copies.
The frustration we've seen around conflicted copies rivals all IT issues. The lost productivity caused by staff going through 2 documents side by side attempting to merge the changes makes most people want to throw in the towel.
To make the most of the Google Apps environment, you need to embrace it. You need to move your file storage to Google Drive and start using Google Docs, and Sheets to create and manage your files. Using their apps, you can truly collaborate in real time on the same documents. You can watch as your colleagues make changes as the document contents grows and adjusts in front of your very eyes.
The cloud is faster
The 3rd myth about the cloud is that using it is faster. The cloud allows your documents and data to be omnipresent, but faster, well that's not exactly right.
As I mentioned above, with cloud solutions in place, you are more reliant on the internet than ever before. With a local server environment, all your data is available to you at network speeds of at least 100 MB per second. This kind of speed means the vast majority of your files will open in a fraction of a second. Now the internet speed of most businesses is somewhere between 2.5 and 5 MB per second. Some organisations will pay a premium for their internet access, known as business grade, SHDSL or Fibre, but most are 5 MB/s or under.
So when you compare 100 MB/s to 5 MB/s, there is clearly going to be a productivity hit to your team, and that's when the internet is up!
Is your business ready?
So the cloud is here, and it will eventually be the platform that all SMEs run their IT infrastructure; but we're not there yet. We are a while away from that. That is why we recommended a local server solution for Company X.
The recommendation for Company Y or Company Z may be different, but you'll only know if you perform the evaluation and consider your options carefully.
If you do want to take your business to the cloud you need to remember:
It will not be cheaper
You and your staff will need to accept that you will have to change the way you work
There will be a speed hit
If you weigh up these factors against all the cloud has going for it, and make an informed decision, your business could benefit; but don't think it will just happen.
Give us a call for an evaluation on whether your business is ready for the cloud.
P.S. Keep an eye out for out next post, 3 great services to move to the cloud…