Thursday, 17 November 2011

The Cloud as a Growth Enabler for Your Business

There's a lot of talk about transformation of businesses into the Cloud. There are plenty of FUD factors lobbed in and there are many wishful thinkers. However, few companies really understand the real benefits of moving to the Cloud.

I can speak from some experience being a micro company that now uses the Cloud exclusively. I manage it all myself which is fine on one level but it is a potential issue on another level. Take a look at my IT spectrum:

  • Accounting - The supplier is Xero and it is hosted with them somewhere in the Cloud and I pay them directly by company credit card monthly.
  • Evernote - Project & research tracking and repository - hosted by Evernote and I pay them annually by company credit card.
  • Microsoft Office 365 - Office productivity and emails - hosted by Microsoft in Ireland and I pay them annually by company credit card.
  • - CRM - hosted by in the Cloud and I pay them annually by company credit card.
  • Apple iCloud - iPad back up - hosted by Apple in the Cloud - free at the moment.
  • SugarSync - Total backup and device synchronisation solution - hosted by SugarSync in the Cloud and paid annually by company credit card.
  • Dropbox - Project storage and shared drive facility - hosted by Dropbox in the Cloud and paid annually by company credit card.
  • Domain Registration - hosted by Zen and paid for annually by company credit card.
  • Skype - Communications software - hosted by Skype and premium service is on advance credit purchase and monthly via company credit card for SkypeIn service.
I also use Twitter, LinkedIn, Ecademy, Facebook and Empire Avenue as social networking services and all are free accounts. 

While I have accrued many benefits from all this, not least in terms of cost and IT management, the fact remains that all these applications are sourced and delivered from many different places. There is no 'One neck to choke', no single support line if something goes wrong, no single bill to pay. If I want to add users or adjust settings, there is no single Control Panel to access, I have to make changes to every application. So while I get some economies of scale by using the Cloud, I get few benefits of scalability as each bit of growth is, frankly speaking, a pain in the neck to actually transact.

Cloud as a Real Enabler

Many people think of the Cloud this way. Piecemeal collections of best in breed applications hosted in multiple sites in the Cloud. Few companies are offering real consolidation. There are co-hosting companies who give some solutions by allowing you to take your IT infrastructure and applications and place them in the Cloud where you can access them 24x7 and get the whole set up locally managed and maintained but few of these solutions actually offer a full service incorporating a whole swathe of applications that can be served, a true single monthly cost per user and 24x7 application support.

Is this an idealistic proposition? A truly outsourced IT department? Well if you are an Enterprise company, such solutions are achievable by working with heavy outsourcers like Wipro or the like who re-employ IT staff and have insanely complex contracts and service options which you pay merrily through the nose for. These are not viable for SMEs.

Is there a truly scalable solution for SME businesses without the complexity and without the pay-by-the-service-request mentality that really allows SMEs to get the real benefits of cost and scalability that larger companies enjoy in the Cloud for a fixed, single monthly price per user? A service that has no minimum revenue or seat requirements to get going? One that encompasses all their IT?

Part of the problem is that several of the largest software companies now make this difficult. Of the applications I use, Xero (and SageOne), Evernote, and Microsoft Office 365 are only available from the vendors themselves, although you might be able to buy MS Office 365 from a Telecom company but why you would do that defeats me. So some of the software vendors are making life difficult and locking out channel - even Google has so few partners it would be tough to find one.

So perhaps the best method of getting into the Cloud is to take what you have today and transform it into the Cloud. Think of it this way, instead of thinking about the Cloud as having 'Capacity on Demand' which is the normal way you would deal with a Cloud hosting company who sell you physical resources. But think of having 'Capability on Demand'. This is a whole new way of looking at outsourcing your current resources.

By taking the applications you have into the Cloud and having an IT department truly outsourced as a small business with 24x7 support and a 99.999% uptime guarantee, you get the best of all worlds. Properly done, there need be no upfront capital investment, no minimum revenue or seat requirements, full sales and marketing support when you need it and 24x7 application support. This would allow companies to funnel their resources into actually growing their business, be able to accommodate growth or assimilate acquisitions more easily and cost effectively, make IT a competitive differentiator, have IT as a strategy rather than a must-have, and have solid auditing and compliance as standard as well as protecting your data in case of disaster.

The benefits of Cloud to SMEs is creating predictable costs for scaling the business - it's smooth and in line with actual growth rather stepwise and lumpy. It means that new applications can be added more easily and cost effectively whenever they are required, and you can leverage the economies of scale in the Cloud to make resources like storage and computing power not only scalable but a fixed cost per unit consumed. If you are a company into buying other companies, the Cloud is the fastest and easiest way to merge businesses allowing a 'cut and paste' model to acquisitions rather than having to mount vast projects for assimilation.

Often the Cloud's in-built adherence to ultra high standards of data protection and security will mean higher standards of audit, governance and compliance for SMEs allowing them to become more credible against larger enterprises in bids or working with Local or Central Government. 

Making IT strategic is a real benefit to SMEs who usually either try to back fit IT into their businesses or have to grow the way their IT lets them. By using the Cloud, IT gets in-built maintenance, a truly outsourced IT department, best in class infrastructure, true mobility and flexibility for the workforce to help cut down on costly premises, decreased power consumption, more sustainability and creates value in IT rather than just cost. 

But all this really only comes to be a big benefit if there is just one vendor involved, one neck to choke. If you can get to that 'Nirvana' then not only will the Cloud unlock real cost improvements and efficiencies but it will finally become an enabler to helping companies optimise business processes and help your company grow.

Does such a vendor exist today? Well, contact me and I will let you know as there are some exciting moves in this market that will have a great impact for the future.

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