The cloud. Some call it a revolution. Others see it as the next natural step in our gradual embrace of the Internet and all it promised during the dot-com era.
These days, the cloud seems to be everywhere. Commercials from IBM, Microsoft and even GE have all invoked cloud technology and how it will make everything from raising tomatoes to cancer research faster, easier and more effective.
Yet with all the marketing hype and so many ‘cloud-based’ technologies promising miraculous results, many mid-market companies are often puzzled over whether they, too, should try to keep up with the latest trends in technology.
For starters, we are definitely advocates of using new technology. But only to the extent it can give you a measurable competitive advantage, or help you maintain or improve the bottom-line. Now here’s the thing about the cloud — It means different things to different people. In fact, so much has been attributed to the cloud that it’s easy to get confused over how to start taking advantage of it. From subscription-as-a-service applications residing on your own network to the utilization of on-demand virtual servers like ones from Microsoft Azure, there is no shortage of options confronting companies today.
But what if you are a mid-market company running custom software? Is the cloud still a good idea? Better yet, what if your software is a legacy system, and perhaps even behind on maintenance? Would the cloud still be a viable option?
Here are a few reasons why embracing the cloud may be good for your company sooner rather than later:
Embrace the (Hybrid) Cloud
There are plenty of reasons to embrace the cloud, some of which we will soon explain below. But before you go out and immediately order up a whole new cloud solution it helps to better understand what cloud means.
Cloud computing refers to the practice of using the Internet to store, manage and process data rather than utilizing servers and other devices on the individual company’s premise. Instead of buying 100% of the hardware and software a company requires, and hiring and paying for the IT staff needed to maintain the IT system, companies can instead subscribe and/or rent its IT assets as needed, thereby lowering its out-of-pocket costs and total cost of ownership (TCO) over time.
There are degrees to which a mid-market company may wish to embrace the cloud. In the case of a company with custom software solution that runs a significant part of its business, there is no need to throw out the baby with the bathwater. In other words, you can still keep your awesome custom software that gives you a killer competitive advantage while enjoying the benefits of the cloud.
Thanks to cloud-based providers like Microsoft Azure, you truly can get better technology, security and system uptime compared to trying to run the entire system with your own internal staff.
Now, about those 5 reasons why a hybrid cloud solution is good for mid-market companies…
Moving at least some of a company’s IT solution to the cloud can help a company’s workforce become more flexible. A cloud-based solution is perfect for companies with a distributed workforce. Whether it involves remote field workers or a highly decentralized sales force, when you move parts of your solution to the cloud, it makes it makes it easier to input critical information and increase the overall throughput of the system.
Consider a route delivery service for a cleaning supply company. The company that waits until the end of the day to collect and process new orders may take longer to fulfill those orders. One that allows its route drivers to upload information in real-time can fulfill orders faster and even allow for rush orders on items of particular importance to a customer. Take that one step further by automating the order capture and entry process and you lower the chance of incorrect manual data entries. In the end you’ll have fewer product returns and happier customers.
Lower IT Costs
A key selling point of cloud-based technology is a lower IT cost. That comes in the form of savings from not having to buy all of the hardware needed to run your software, or manage systems like Microsoft Exchange in-house. It also comes in the form of not having to physically maintain hardware assets, and keep the same large staff of IT talent.
A company that moves a significant portion of its IT resources to the cloud also tends to experience boost in productivity. Why? Because the IT hardware rarely fails without the proper backup and system mirroring needed to keep the company up and running. In many companies with on-premise IT, when a server fails it often takes longer to fix compared to a cloud-based approach, where system redundancies prevent unnecessary downtime. What’s more, hardware failures with on-premise hardware runs the risk of prolonged work stoppage, data loss and data re-entry.
You hear that term from every technology solution provider under the sun. More often than not the term is either misused or poorly communicated by IT providers. At Clear Measure, we like to say that technology ROI refers to the degree to which a given technology investment will yield greater savings (or revenue) for a company as measured by net profit divided by the investment cost.
A cloud solution for a typical mid-market company running custom software must always be evaluated in terms of how much it will either save or earn the company. The same goes for on-premise IT. When IT goes from large up-front capital investments and related recurring IT salary and routine maintenance expenses to one based on a monthly charge tied to resources used and/or rented, then you can imagine that cost savings potential is hefty. In other words, it doesn’t take a rocket scientist to see how the ROI for cloud-based investments will often outweigh that of on-premise IT investments.
One challenge fast-growth companies face is the ability to scale their operations to meet demand. While there is no way to ensure that can happen for a company dependent upon large capital investments (e.g., manufacturing, logistics, oil & gas), for many others the problem of scale is much easier to solve. It deals more with a company’s ability to gather, process and deliver information. The efficiency of workflows, the elimination of manual data entry, the automation of repetitive tasks — all can be scaled more rapidly with cloud-based technology. By having service level agreements with 99.99% uptime guarantees, you can rest assured that your workforce will have access to key systems not only anytime, but from anywhere there is an Internet connection.
Lastly, in the information-driven world we live in today, innovative companies are figuring out ways to add more revenue-generating activities all while seamlessly adding more customers, employees and new supporting software solutions. The cloud makes that far easier than having to purchase and set up new servers on premise. What used to be a headache and a tedious, time-consuming task is now as easy as going online to order more capacity.