clouds

I’m getting this question a LOT.

“The cloud, J.…what is ‘The cloud?’”

“J., what’s all this about ‘going to the cloud?’”

“And what do you, as a local IT service firm in Fresno know about it?”

Discussions about so-called “cloud technologies” and “cloud-based applications” and just “the cloud” in general are really getting to the point where I think a lot of people are referencing “the cloud” but not understanding how it applies to real life scenarios and what it means, specifically for their businesses.

Before I get into all kinds of specifics, maybe I’d better do my best to clue you in on what “the cloud” is and what “cloud” means.

Simply put, “the cloud” is the Internet. It’s what network administrators refer to as “out there,” meaning, “the network of computers outside your organization” versus the network of computers “in here” or “inside your organization.” The cloud is the Internet.

“Ohhhhhh!” you exclaim. “So what’s the big deal? The Internet has been around for a long time now. Who cares?” A fair enough question, so here’s the big deal. A lot of software providers are moving to only offering their stuff online. And I’m not just talking about purchasing it online, I mean that you can only access it with your web browser (Internet Explorer, Firefox, Opera, etc.). That means no software to install, no software to patch, no software to upgrade or get corrupted, and you can access your software from any computer with an Internet connection.

The argument is that you never have to worry about having the latest version of the software again. It’s always being updated, always the same for every user and always has the same features as the guy next to you, regardless of when you started using the software.

Have you ever been working in your office, and you have an outdated version of say, Microsoft Word, but the other guy across the way has the most up-to-date version? Or maybe you’re the up-to-date one and it’s the other person complaining. What happens when the person with the “latest and greatest” tries to send you a file? You can’t open it. Or it looks funny or it’s formatted weird. What about if they use fonts that you don’t? Same thing. The solution is for everybody to use the same version of the software. Which means upgrading everybody on a regular basis, and we know every company does that, don’t we? Wrong. That’s one of the major benefits of using an Internet based or “Cloud” version of the software, is that everyone is using the same version at all times.

So, how do these guys make money? Well, they get you for a monthly fee for the rest of your life. You end up paying for the software like a utility (kind of like your phone bill, your gas bill, electricity, etc.) instead of making a lump sum purchase every so often. And the software manufacturers have discovered they will make a LOT more money off of you by getting you to subscribe to their software than by purchasing a license and waiting until the last minute to buy a new version.

So how does Microsoft get you? They get you to subscribe to Microsoft Office 365, at anywhere from $6.00 to $40.00 per month per user. They make it very affordable to get into the software, but then they keep you on it for the rest of your life.

Is anyone out there using Microsoft Office 2003 still? Don’t lie to me, because I’ve been to your offices and I know what you’re running. Well, Office 2003 is old now, but it still works great. I’m not saying you shouldn’t have upgraded by now – you should have done that years ago. But 2003 still does what you need it to do. So let’s do the math, assuming 3 users using Office Basic.  Let’s assume you finally upgraded to Office 2010 back in 2010 and you got 8 years out of Office 2003.  Anyone who upgraded to 2007 when it came out is on the verge of an 8 year run, and I see a lot of 2007 licenses out there.

Purchased outright: 3 users x $200.00 per license = $600.00 over 8 years.

Purchasing Office 365: 3 users x $6.00 per user per month = $18.00 per month over 8 years = $1,728.00!!!

No wonder they’re trying to convince everybody to move to “The Cloud!” That’s an additional 188% to their bottom line for the same 3 users! And even you HAD moved to Office 2007 when it was time, you still would have paid 44% more than if you had bought the licenses outright.

You COULD use Google Apps at $5.00 per user per month, but that only saved you $108.00

Benefits? Short term low cash outlay; always up-to-date; lower maintenance cost.

Drawbacks? Higher total cost of ownership for the software itself; many times not available unless you are connected to the Internet; many times minimal tech support (email or online only).

Still, for a LOT of companies, moving to cloud based software is a HUGE benefit. I’ll focus on the benefits on other articles, but for now, let’s just say we should probably get together and discuss how your business works and what technology and software is “out there” to help your business.

Photo Copyright Mark Stevens – License