Ok, so we’ve considered a couple of categories in deciding whether to put programs and data in the cloud. We looked at the financial considerations, and the subscription vs the purchase methodologies. We considered the functional differences in how those options work, examining the parameters of cloud features, internet reliability, and remote work. One last look here to consider is simply what I’ll call the “Fruitful” question; that is, just how can a cloud solution affect your productivity as a firm. If the move, which can cost a fair amount to setup, doesn’t help you either reduce costs or produce more, it just doesn’t make sense. So, let’s consider those options.
1. As we discussed in the first blog, the most obvious comparison here is the direct costs vs the subscription costs. Inevitably, there is a fall line where, apart from other costs, purchasing becomes cheaper than a subscription, which never ends. It’s usually about three years or so on average but varies. So, if you pay say $100/mo. for a Widget App with subscription or could buy it for $3,600, your fall line if at 3 years. And if you don’t need to upgrade or the like beyond that, you save money after that with the purchase plan. However, it just “ain’t that simple” upon closer inspection.
2. Depending on what you are running on premise, you almost always have ongoing warranty and/or support costs. These are usually small compared to a subscription, but they do push out the break even point in terms of costs. That can mean that your 3-year fall line becomes 4 years, for example, but it depends on those costs.
3. The real wild card is the labor to maintain and handle problems or emergencies. If you’re don’t have any problems at all for three years, you may want to head to the casino, because you are one lucky dog! Most people do, and those costs can be exorbitant in case of some emergencies. You also must perform your own upgrades, backups, and the like, all of which cost money. The subscription plan takes these risks out of the equation and many folks really like that.
Bottom line: Put a spreadsheet together with reasonable numbers for each case and see where the chips fall.
But we also should consider the productivity side of this:
1. The effects on productivity are also not easy to quantify due to variety in some key parameters. First issue would be the speed of your connection. If your ISP connection is slow, and this particularly applies for those working from remote locations, you can simply lose productivity in wait time, not unlike a doctor’s office. If you have large files or an application that generates lots of changes on your screen, you may do some computer twiddling. The effect here isn’t always so much the time to the company, but frustration for the user. You can go from happy to crappy in no time if your speed is poor.
2. A primary area of productivity is simply allowing your IT folks to work on other core issues rather than keeping up your system, since the cloud folks will handle it. This is why Microsoft Exchange gained so much favor in the cloud, as it was a beast to maintain. Handing the maintenance back to Microsoft was a huge relief for many IT folks and often allowed companies to get along with one less employee. The IT folks could work more on strategy and helping their fellow employees than keeping the beast running.
3. Finally, consider the type of application you use. In general, graphics and design apps take a lot more resources to use than word processing or email clients, for example. That means that you either must purchase a lot more processing power in the cloud, which can add up, or keep those apps on premise for to keep costs down and users happy. The simpler the app, the better it runs in the cloud for similar costs.
Bottom Line: Productivity is as much about what your employees spend time doing as how much they produce.
So, To Cloud or Not to Cloud? Is a question to which more and more people are answering in the affirmative. And I’m certain that in 5 to 10 years it will nearly all be done there. But for now, there are parameters that warrant some apps more than others. I would simply urge you to reach a point where you can clearly answer the question as to how it makes your business better. That can mean lesser costs,
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Thanks much and remember to live life “Cloud and Proud!!”