Is there climate change afoot? One could easily argue that the business climate has already changed. Many businesses have found themselves stuck in the doldrums where nothing moves at all. Others experience volatility, where they are not sure which way the breezes will blow tomorrow. How many managers long for the old days, not that many years ago, when growth was robust, the path ahead was crystal clear, and there were no storms brewing on the horizon?
The best remedy for this new, new climate may not be to run away from developing clouds, but toward them. The IT cloud can be the solution you need to fend off those other clouds of doubt, worry and ill-weather. What the information technology cloud can do is let you ride with the wind and tack as needed to meet your business goals. Technically, what cloud services do is let you move from an ownership model of investing, maintaining and upgrading to a rental model of pay-as-you-go.
Ownership has its advantages. It puts you in control. Your business capital is right down the hall where you can see it. Nobody can take it away from you because it’s yours. You can do with it what you wish. There is depreciation to help the bottom line and once it is paid off, you own it without further payments... or so you think.
The problem with the ownership model for technology is that today’s servers and PBX systems aren’t like steam engines, lathes, CNC machining centers or mainframe computers. You don’t buy a monster machine for your company and expect it will still be going strong long after you retire. The half-life of anything powered by electronic chips or dependent on the vagaries of the World Wide Web is almost shorter than the time you need to get it fully productive.
Your capital investment is also the start of your costs, not the end. Even if breakdowns are infrequent, there is a steady stream of upgrades, modifications and security features to be installed and tested. That means ongoing costs for both software and personnel. None of this stuff runs perfectly for long with your back turned. There is always the need to deal with something that has dropped offline or needs a soft reset. It is nature of anything microprocessor based to get lost in its nearly incalculable software paths. It’s rare that you need to shutdown a box to stop the smoke from pouring out. It’s a given that you’ll need to unplug it and plug it back in to “magically” fix whatever is hung up.
There’s no denying the inherent nature of technology. The real question is whether it makes more sense for you to take ownership of these issues or pawn them off on someone else. A decade or two ago, the answer was clearly to do as much in-house as possible. Today? Launching those monkeys off your back and into the cloud is looking better and better.
I haven’t dropped the word “outsourcing” yet, but this is the time to embrace it. In simplest terms, you hire someone else to do things that are more cost effective for them to handle than for you to do yourself. On a macro scale, there can be major societal upheaval caused by suddenly shifting 100,000 jobs from here to there. On a micro scale, business by business, the evolution from doing everything in-house to buying services from other companies specialized in that service can increase your agility to compete in a world where the view of tomorrow is murky. Outsourcing technology to the cloud is going to be big in 2012, perhaps enveloping.
What can you transfer to the cloud? Technology tools are prime candidates. You use these tools to perform your business, they aren’t the core of your business. Does it make any difference to the nature of what you are doing whether you own that rack of servers, rent the same boxes from a colocation center or pay by the hour to use virtualized servers in the cloud? Not if they all do exactly the same function.
Technology services in the cloud now include virtual servers that can be expanded or contracted instantly, pools of disk storage, high bandwidth Internet connections, network security, development platforms, enterprise software packages, and telephone communications. That’s right, you no longer need a telephone system in your office. You still need the phones, of course, but the switching system and the outside trunk lines to the public telephone network can be provided by the cloud. That includes contact and call centers as well.
There must be a good reason for all the fervor surrounding cloud based services. Is it simply the fashionable new thing for business or are we experiencing a fundamental shift in how we will run businesses for the foreseeable future? If this is the new mode of operation to be competitive, how long do you want to wait before checking it out? It’s likely well worth your while to at least compare cloud options to what you are doing now. Then decide whether a small cloud, large cloud or no cloud at all makes the most sense for your business.