If you’ve been reading business magazines or blogs over the past few years, you’ve undoubtably run across authors touting the benefits of embracing the cloud. In my experience talking with business owners, I’ve found that many of them have heard of the cloud, but very few have any idea of how to integrate it into their enterprise and achieve the much publicized cost savings.
The key to achieving success with the cloud is to know which systems will work well in the cloud and which will not. Certain software, such as client/server databases applications that make use of ODBC connections, will slow to the point of being unusable in the cloud. Others, such as email and web-based ERP systems will run beautifully. Let’s examine several cloud-based systems that work well and save money.
Phone Systems
For businesses with less than 20 employees and a reliable internet connection, moving your private branch exchange (PBX) into the cloud can provide tremendous benefits and cost savings. A typical on-site PBX can range from a few thousand dollars on up to the tens of thousands. In addition, most PBX systems still use analog lines for external access, requiring several analog phone numbers or an expensive T1 circuit. Either of these options will cost from a few hundred to a few thousand dollars each month.
In contrast, cloud-based phone systems eliminate the costly capital expenditure of purchasing a PBX and the monthly recurring cost of analog lines or a T1. They work over your business’s broadband internet connection and provide many of the same features as an on-site PBX including extension transfers, auto attendant, direct inward dial numbers, voicemail, hunt groups, call-forwarding, call routing, and many others. The only up-front cost of the system is the phones, which range from $50 for a softphone to $500 for an executive Polycom or Cisco model.
There are a few downsides to cloud-based phone service. For one, if your Internet goes down, your phones are down as well. With most employees having cell phones as a backup, many business can work around this limitation. To avoid call quality problems, your broadband Internet router should be configured to give priority to voice traffic so web surfing and downloads don’t interfere with phone calls. Before making the switch to the cloud, speak with your IT service provider to determine if your Internet connection can handle the volume of call traffic. For businesses with less than 5 extensions, any DSL or cable should do. Once you get above that number, you’ll need to make sure you do your homework.
Even very small businesses can present a professional appearance over the phone and save hundreds or thousands of dollars a month by having their phone system to the cloud. Some vendors include:
Business Software
Over the past few years, the number of cloud offerings in the software as a service (SaaS) model has grown at a staggering rate. With the growth of early entrants such as salesforce.com, the market has exploded with new offerings. 37signals.com has a suite of business productivity apps that help small businesses and departments manage their customers and internal business processes. Google Docs offers a free Office suite that is often a viable substitute for Microsoft Office.
When considering moving to the cloud for business software, the key issues to consider are intellectual property and information portability.
First, intellectual property protection should be considered any time you are shopping for a cloud vendor. If you’re going to place your company’s IP crown jewels on a third party system, make sure they have the reputation and the ability to protect your data. If the company you are considering is local, ask for a tour of their data center. Ask if they are regularly audited and certified by an impartial expert. Find out what physical and logical separation exists between your data and the rest of their equipment and the Internet.
Secondly, make sure that information placed in a data center can be retrieved in the event of disaster, bankruptcy, or a breakdown in the relationship. Sometimes migrating your data into a SaaS system is a one way operation. It may not be easily retrievable. If things turn south, you may find yourself printing out hundreds of pages of data that need to be manually re-entered into another system. Worse, you may not be able to get to your data at all. Make sure you can get regular exports of your data and store them on a local system or encrypted portable hard drive.
Email
In the current state of affairs, email is the number one system to migrate to the cloud. Given the nature of email, (low bandwidth, not real-time, asynchronous) the requirements, (always on, business critical), and the nature of email administration (time consuming, high-skill) it makes perfect sense to move it out of your office and into the cloud.
There are currently two choices for cloud-based email, Google Apps and Hosted Exchange. POP3 is not cloud email since there is no ability to synchronize email between devices. IMAP email can provide some cloud-like functionality, but I do not recommend it because IMAP technology is not well defined or developed.
There are many providers of Hosted Exchange email, which is a Microsoft technology. Google is the only provider of Google Apps. You can get more information and read more about the pros and cons of each in my post Google Apps vs. Hosted Exchange.
When choosing a cloud email solution, you will want to consider how well it will support your mobile users. iPhone and Android users are able to receive near real-time email alerts on Google Apps and Hosted Exchange. Blackberry users will require an additional license or Blackberry Enterprise Server to achieve the same functionality.
Final Thoughts
The cost savings to be realized by migrating to the cloud are achieved by a reduced need for both infrastructure and labor. When doing net present value calculations, you should view it as not just one less server to purchase, but one less system to support. Any cloud system worth its salt will be nearly maintenance-free from an IT perspective. All patches and upgrades should flow transparently from the cloud vendor.
Which brings me to the downside of being in the cloud. There is a complete lack of control and often poor communication when things go wrong. System downtime may be unpredictable and it’s frustrating to have no ability to commit resources to getting things back online. Will the system be down for 10 minutes or 10 hours? The good news is cloud vendors know their reputation hangs in the balance when it comes to downtime and most companies do everything possible to avoid it.
There is no doubt that the cloud is the wave of the future. In the 1990′s, Sun Microsystems said “The Network is the Computer.” Twenty years later, that vision is finally becoming reality. With the recent developments in Google’s ChromeOS, the embrace of the cloud by Microsoft, and the move to high-speed 4G wireless networks, the vision of the always-on network is about to become a reality.