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What is Cloud Computing and how does it affect my IT budget?

Imagine (if you can) a place without a stable distributed phone system. Every office, city, and home had their own phone system with a local switchboard. To call your kids for dinner upstairs you dialed “2”. Occasionally this system broke down and you had to hire someone to fix it for you. If you were in an office, you had a full-time resource that was just in charge of “making the phones work”.

Today we use a shared infrastructure to host our own phone communications and each office doesn’t have a “phone guy”. We pay for the phone infrastructure as a service and don’t worry about it.

Cloud computing is the use of shared IT resources and technology as a service. Instead of having a server to make sure your office emails are sent, another server to house your accounting system, and that dusty old desktop (do not unplug that machine!) that houses the timecard system, you could instead pay a cloud vendor to handle these needs. Since you pay based on how many servers you require and how much you use them, when you need a new server for a project you just pay more a month for the increased usage.
But wait – shouldn’t this be more expensive?

Types of Traditional IT Costs

Information systems have upfront and ongoing costs. Upfront costs include buying new servers and software licenses, getting them installed, vendor setup fees, etc. Once everything is setup you then have two types of ongoing costs:

  • Maintenance: costs for upgrades and performing preventative actions
  • Support: unexpected issues that you have to fix

If you think of a single desktop computer for one of your employees the upfront costs are the computer and their license for Microsoft Office and ongoing costs include keeping their computer up to date with service packs and fixing it after they spill coffee on it.

To handle these costs you either outsource them or hire in-house staff. This staff buys and installs servers, keeps them up to date, and fixes any issues. This has some disadvantages:

  • IT people are expensive and hard to scale as your business grows
  • Since they rarely setup brand-new servers they are not experts
  • Since they do support more frequently and as higher priority tasks they become great at support
  • If they get busy they favor support over maintenance (until an out of date server cause a support ticket)

What the Cloud Changes

If you move your resources into the cloud this dynamic changes dramatically. Your local IT staff leaves the best practices to the experts who worry about security and patches fulltime. They still help with the setup of servers but focus more on the configuration and not the “build” piece as the cloud vendor can provide off-the-shelf configurations. This frees up your local IT staff to focus on support specific to your business.

There are some other specific advantages of the cloud infrastructure as well:

  • Pay as you grow: Instead of paying in large 25K server purchases you pay as your needs increase slowly
  • Geographic independence: Instead of one datacenter where you hope nothing happens you have increased fault tolerance and performance of multiple locations of your resources
  • Easier deployment: Cloud vendors provide services that allow you to easily upgrade your services and rollback if there are issues

To summarize, cloud computing means:

  • Less ongoing maintenance costs
  • More predictable costs as you grow
  • Less time spent on maintenance means ongoing surprise support costs are reduced
  • Your local IT can focus in on issues related with your core business
  • Some things are possible that never were before for small businesses

Interested in learning more about moving some of your services into the cloud? We can get you there. Contact SOLTECH for more information on advantages of the cloud and estimated savings.

(photo credit: Perspecsys Photos)

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