Are you using some form of cloud computing in your company?
If not, you probably will be not too far into the future so you need to be learning about it.
Here is why. A recent survey by Duke University and CFO Magazine tells you all you need to know. They surveyed 481 CFO’s in the US, and here is what they were told:
- About half already use some form of cloud computing in their company.
- 83% said they expect their company to rely on cloud-based computing services within 3-5 years.
Cloud computing is here and it is here to stay.
Business executives like the cloud computing concept of “pay as you go”. Outsourcing is certainly nothing new and the cloud gives companies additional outsourcing opportunities as they strive to keep costs in line.
I have to say I like it too. For example, a CIO in a small company struggles to have the critical mass of infrastructure and systems technical expertise to manage a data center, support a network and all the systems of the company. Even when they do, there is constantly a risk if a key employee goes out sick or leaves your company.
Why not outsource your data center? This becomes more and more compelling when you look at the full cost of keeping everything “in-house”.
Consider the following:
- People cost with specific technical expertise – It is hard to maintain critical mass of all the technical expertise you need in a small company and it can be more expensive.
- Systems that depreciate and become obsolete – Let someone else make a home for your systems who can better staff and provide the controlled and secure environment you need for them.
- Equipment that depreciate and can break – Might be nice to let someone else worry about this who has the critical mass to support it effectively.
- Space – Space has a cost just like anything else, , , maybe all that space can be better utilized
- Utility cost to manage the heat created in a data center – Your data center is one of the biggest users of energy in your company. Outsourcing your data center can have a big impact on monthly utility expenses.
- Redundancy required to insure 99% up-time – It’s expensive to have redundant systems and people to create an environment that stays up 99% of the time.
- Security can be enhanced – Outsourcing your systems, software, or data to a cloud service can enhance your security by taking advantage of a company who is able to afford a more robust security environment.
In the old days you wouldn’t have thought much about outsourcing your software, much less the data center. But in today’s environment, companies who can create a critical mass and are focused on specific services for other companies can be a big plus for all of us.
Cloud computing allows us to focus on the expertise we really want and need in our company and rely on a 3rd party for the expertise we would rather have somewhere else anyway.
Managed appropriately, cloud computing can offer your company a more cost effective technology environment, more secure, and with higher reliability. Still, , , any environment must be managed, , , otherwise it can turn into a disaster.
Here is a final thought for you. Google and Amazon use cloud computing quite heavily, , , why do you think they do? The answer is pretty obvious, , , it is more cost effective to use outside services of companies who make it their mission to provide such services. That’s the 3rd party company’s core competency, , , Google and Amazon don’t want to be the experts in this area. It is less expensive and more reliable to use outside experts, , , for some things, , , not everything.
Who said you do not have to worry about any of the above listed points in the article with cloud? You still do but from a different perspective and not much cheaper.
You are exactly right and appreciate you reinforcing this point. You can outsource almost anything if you choose to, but you still have to manage the process and deliverable of the outsourced service. In some cases you may find it minimally less expensive, , , potentially even more expensive to use an outside company.
The key is to do what makes sense for your company in the most cost effective manner. For many, outsourced services will work great, albeit as long as it is managed per imad’s point. For others, it will be more cost effective to keep most of IT services in-house.
You should look at the overall cost and responsiveness for any service you provide. In some cases, it will be more cost effective to do it yourself. However, if you find an outsourced service is more cost effective and you are comfortable you can still deliver the service effectively, responsively and predictably, then I would take a good hard look at using it, , , especially in an area where you might have difficulty in maintaining a critical mass of resources.
The bottom line is that every company is different and has different sets of issues. No single approach will work for every company so be sure to look closely at your company’s unique set of circumstances.
One last point, , , Ford Motor Company hired new CIO’s in different decades. In the 80’s the new CIO farmed out over 70% of IT. In the 90’s, another CIO came in and he decided to bring in over 70% of those services, , , i.e., Ford employees instead of using 3rd party companies and contractors. Both had the same reasons and justification, , , they felt they could be more cost effective.
imad, , , thanks again for your comment, , , good points.
Another advantage of Cloud computing is that you can be “up and running” very quickly. When planning out your technologies and ROI, consider Microsoft’s offerings – there are solutions to meet your needs and the flexibility to have public, private or hybrid Cloud environments. This link will give you more details: http://smb.ms/Outreach92XFuX
Microsoft SMB Outreach Team