The Truth About Cloud Services

Frank Butler, CEO and President, Syncronet

Is your business leveraging the cloud in the most efficient and least costly way possible that delivers simultaneous value to your clients and your company? For a moment, let’s dismiss the details of what those services might be and focus more along the lines of the business drivers that guide IT infrastructure decisions.

Cost

Most folks would be surprised to learn that the bulk of the available cloud services today do not represent much of a savings in cost. In fact, many are more expensive and in some cases much more expensive. Especially after you start to add up intangibles such as greater need for internet bandwidth and additional overhead required to manage diverse systems. You need to do your homework and amortize your expenses over the long term to find the real cost. After all, you do intend to be in business long term, right? Sometimes business-grade services are less expensive but most times, they’re not.
Usually the “savings” is in upfront costs but that only represents an advantage if you are looking to move expenses from a capital expenditure to an operational one.
Some like to spend cash when they have it, some don’t. That’s a judgment call only you can make and it is solely dependent upon your own unique situation, no one else’s. One size does NOT fit all and you need to follow the money to decide for yourself if this truly represents a value proposition to you.

Performance/Usability

No one likes to put in a solution that affects production performance or is harder to use – for you OR the customers. Bad for production, bad for costs, bad for risk tolerance, and bad for morale. If you are moving an existing service to the cloud, you’d better be very clear about why you are doing it because if it is slower or harder to use for you and/or your customers, you will have a revolt on your hands. Often times, cloud services offerings are scaled back in their customizability and that could hurt if you aren’t expecting it. Therefore, the lesson here is if it doesn’t provide a better experience for the customer or it doesn’t make your company leaner and meaner, there had better be a HUGE value proposition elsewhere and you’d better be able to define it.

Risk

This is a big one. If privacy laws that prevent sensitive data from leaving our borders affect your company, internationally hosted cloud services are a non-starter, the end. Also at risk: your data. Is the cloud services provider going to be around tomorrow? What if they actually start to suck or they go belly up – how easy is it to migrate your data to a new provider or back in-house? And is it being backed up AND replicated regularly and if so, how often – enough to satisfy your needs? What happens if you need to restore something from a couple of hours/days/weeks/months ago? What’s that look like? Or what if your internet pipe is slow or unreliable? If for whatever reason you cannot be provided with reliable, fault tolerant internet services, you could be placing your ability to service your clients’ needs in serious jeopardy.
And how often does the cloud services provider upgrade their hardware and software? If your company creates processes around a specific feature set that becomes unavailable in the next iteration of the provider’s software, you could be in trouble and yes, I have seen this one play out and it’s not pretty. Or if they are somewhat lax in their hardware upgrades or they over-subscribe their services, things may slow down and you will have zero ability to affect that. There are plenty of risks in ANY move. Again, do your homework to determine your own risks and then apply your tolerance to those risks prior to any decisions around cloud services.