Pondering a Move to the Cloud? 5 Things to Consider
I regularly get asked the question: “Should we move to the cloud?” Invariably, my answer is always an unfailing “Maybe” much to the enquirer’s chagrin. Problem is, it’s just too broad a question. It’s a little like asking “Should I buy a car?”. Couldn’t tell you without knowing where you need to go, how often you need to go there, how quickly do you need to be there, how much is in your budget, and so on and so on and so on… There is simply no one-size-fits-all answer to either of those questions. But I can narrow it down a little by suggesting the following 5 major considerations.
Disclaimer: I am not anti-cloud nor am I pro-cloud. I’m pro-solution that works for your particularly unique situation be it cloud, on-premise or somewhere in between. We use several cloud-based services ourselves and in most cases, I couldn’t be happier with the results. I just believe that all situations are unique and should be considered as such. Full disclosure: I make more margin on cloud deals than the on-premise equivalent but if on-premise is the right choice FOR YOU, I’m going there every time.
1. What’s the goal?
What problem are you trying to solve? Will it simplify your life (or your client’s lives)? Will it represent a competitive breakthrough or make you more agile? Will it help you avoid a cash crunch? You need to be able to solve a real problem, otherwise it’s a lateral move – same stuff, different pile. Surprisingly, this fundamental question is often overlooked and when I ask why are you contemplating the move, the answer is commonly “Isn’t that where it’s all going?” You need a darn good reason and you need a plan otherwise it is a very expensive exercise with no real perceived benefit.
2. Counting the costs – CapEx vs. OpEx
Money isn’t everything – it’s the ONLY thing. It’s worth it to know, dear reader, that most cloud services when amortized over a multi-year stretch are costlier than their on-premise counterpart. Not always – like everything else, each situation is unique so I am generalizing a bit. But most are surprised when I say that: “What??? I was told it was waaay cheaper!”, is the usual response. But seriously, think about it. Someone else has to buy all that gear instead of you. And yes, they get some savings buying in bulk and hosting across a large subscriber base, but still, you get to avoid dropping piles of cash. Did you really think that wouldn’t have a premium attached? No, like really???
So – if you have cash, it may be cheaper for you to go with an on-premise solution. This is otherwise known as an Capital Expense aka CapEx. However, if you are a startup or you just made a big investment on the shop floor and have no money in the bank, it can be far more practical to go with a cloud-based model and finance it through a monthly Operational Expense or OpEx.
Whatever way you go – CapEx or OpEx – there are tax implications so check with your friendly neighbourhood bean counter as part of your due diligence.
3. Internet Bandwidth
Here’s a cost most cloud services purveyors like to keep quiet. Read this carefully because this is the absolute #1 reason for a crappy cloud experience: IF YOU HAVE SLOW OR LOUSY INTERNET SERVICES, YOU WILL HATE OPERATING FROM THE CLOUD. Nothing is a bigger buzzkill than that which used to be fast being now painfully slow.
Think about it this way: on-premise, you have a big fat data pipeline that you share with no one else. So when you click on that ginormous spreadsheet or drawing or presentation, you get it almost instantly. But when all your resources are on the cloud, you have a much smaller pipeline than the internal one you are used to using and you often have to share it with others. It’s like the difference between a water main and a garden hose.
So while calculating costs you should also be looking to NOT have a noticeable degradation in performance or you will have a user revolt on your hands. You will need to factor in the requirement of a very robust connection to the internet – on the order of 100Mb in each direction – or it will almost certainly it will end in heartbreak. Many service providers don’t like to talk about that because it is a very real (and often very high) expense to have a lightning fast connection to the web and that can be a significant barrier to entry. Over 5 years, a bump of a couple hundred bucks a month for internet can represent more than $10k in additional expense. Buyer beware…
No. and in most cases, you wouldn’t want to anyway because you will end up biting off way more than you can chew. The “trend” these days is a hybrid cloud. Some services in the cloud, some service on-prem. Which ones where…? Tough to say; remember, every situation is unique but in most cases, email and disaster recovery/business continuity are great places to start. Reason being, is they are two of the older and more established forms of cloud-based computing so they are tried and true and really quite reliable.
And it should be noted that there are other email providers besides Office 365. I have nothing against Office 365 but there are some features that may not be attractive to you that add significant cost. However, that is a topic for another conversation so lets just leave it at email hosting makes great sense both from a money perspective and ease of use.
Other great cloud-based services might include CRM, database services, application development and a veritable cornucopia of new services that pop up pretty much daily.
5. What if I hate it?
What if, indeed. Chances are you won’t, unless of course you get hooked up with the wrong provider. Just make sure there is an easy out in the contract especially for non-performance (be careful about long term contracts with harsh penalties for early cancellation). Your provider of choice should make it easy to onboard AND off-board their services. Be sure to ask questions like what it takes to get out of the contract if it doesn’t work for me now or in the future. Also, be sure to ask about increases. Are they written into the contract (preferable) or could you get hit with an increase whenever it strikes someone’s fancy? Ask to see ample contracts and ask for references. If you can’t get a look at either or there are contractual holes you can drive a truck through, be concerned. It should be noted that most contracts are written to protect the provider but in all fairness, the provider should be protected against folks who change their minds more often than most people change their socks – onboarding is expensive after all – but it also shouldn’t be overly punitive if a situation changes.
Need help determining if/how/when to move to the cloud? Your first step should be to call on a professional who can give you the answers you may not know how to find.