There is a lot of chatter about the movement of software applications to the cloud so I wanted to weigh in with my thoughts on the topic. First off, what is the cloud? In its most basic form, a client is using the cloud when they have their software hosted by another party off-site. For a very boring but much more official definition, check out this link: http://tinyurl.com/ygdppnh.
There are several factors driving the push to the cloud but the some of the most important seem to be:
• Down Economy – Pushing capital outlay and IT management costs to the Cloud provider
• Peace of Mind – Clients can focus on their business because experts are maintaining the network
• Location Independence – Ability to work from any location with Internet access
• Upgrade-Proof – No more life cycle issues with hardware & software
• Flexibility – Reduced user counts results in immediate reduced IT costs and also allow for fast expansion
Research groups are coming out with some striking numbers related to the proliferation of the cloud. Gartner’s research indicates that 1/5th of all businesses will own NO IT assets whatsoever in 2012. A survey by The Sand Hill Group found that 70% of IT Manager respondents currently spend less than 3% of their IT budgets in the cloud, while by 2013, 80% expect to spend between 7% to 30%.
Thinsolutions has had a Cloud offering since 2000, so we’ve obviously believed in the benefits of the Cloud long before the general marketplace did. Seeing the market catch up to us is exciting but has also caused some concern as behemoth players like Google, Microsoft and others are entering the space with varied offerings. Once Microsoft made the strategic decision to deliver its software via the web, everyone knew that the cloud model had won because Microsoft is probably the last company that wanted to move in that direction.
I have two major thoughts about the cloud as it relates to the Small-Medium Business segment. For one, although the cloud is often sold as a cost savings mechanism, it rarely is for the small business customer. I think some savings can be realized by using a specific apps like salesforce.com instead of customizing and managing your own CRM package, but for the typical client who wants to save money by pushing their infrastructure, administration and support to the cloud, there is minimal savings. In fact most of the savings is associated wtih management no longer having to hold meetings to discuss whether or not they are using the right backup solution, security, etc. Combine these soft costs with the savings that go along with a more highly available, secure and disaster proof solution and there is still plenty of reason to move to the cloud route.
My other observation on this topic is that there will always be a place for local Cloud players like Thinsolutions vs global Cloud players like Microsoft. I’ve heard a lot of IT analysts say that in the very near future clients won’t care where a server sits or what brand it is, they will just care that it’s providing adequate services at a reasonable cost. Although there is some real truth to this theory, I still believe that clients appreciate a local “neck to wring” when they inevitably have issues or want customizations to their Cloud. And therein lies the key:, companies like Thinsolutions can and do provide customized cloud solutions with responsive and flexible service offerings. We already have examples of clients who have tried the cloud route for example with Google Mail. A particular client needed some custom integration of Google’s Mail to Outlook. It took 21 days to get a response about the issue. Although the behemoth cloud players will likely improve this level of service over time, the reality is they can never be organized to be as flexible and responsive as a local company like Thinsolutions is to its clients.