Should a Small Business Transfer Their I.T. Services on-line?
This section outlines some of the factors that you need to consider when contemplating such a venture as moving your I.T. to more on-line services. These include:
- Business Growth
- Hardware
- Internet Broadband Use
- Software
- Your Information
- Service,Support and Monitoring.
Business Growth
For some businesses this may well be somewhat academic,as their use of I.T. has grown with their consumer use of technology. For example,most people have an on-line email account such as Hotmail. Sharing photos on-line or using Facebook is now second nature. Indeed,you may be at the moment using exactly these services to conduct your business!
However,business growth requires better I.T. services to maintain a professional image. How do your deal with more than one user in your business on-line,and how do you install new business specific applications on-line? What happens when you want an email and website address that reflects your business name? Many of these on-line service providers only cater for part of the I.T. jigsaw puzzle,leaving you still to figure out the missing pieces. Such pieces as:internet service provision,hardware,migration of your data and general I.T. support.
Hardware
Another important point is that the cost of hardware is coming down,and it keeps coming down. Replacing the PC for many of you is a trip down to the local PC store. You will still need to have a PC / laptop whether you have Cloud Computing or not –and then you have to factor in that additional monthly fee for said on-line service.
So. From a hardware perspective will you be able to do without with what you currently have;if you move over to on-line computing services? Is it going to save you any money or is it going to allow you to do things that you could not do before?
Internet / Broadband Use
You already spend a significant amount of money on internet and telephony. In many cases you may be spending more on this than the rest of your I.T. put together! With on-line services,your use of the internet is rapidly set to increase. Check your existing broadband tariff to make sure that it caters for the increased demand with hosted services.
Saving your files on-line means “UP” –loading (not down-loading) your files to an on-line file server. The upload speed is still very poor for most consumer broadband packages. To improve this you can consider upgrading your internet tariff ,however for a tripling of your monthly subscription cost and significantly increased download speed,you still have vastly inferior upload speeds. Internet Service Providers can provide additional solutions such as SDSL lines,or leased lines to overcome upload issues. Typically an installation can cost from £1k to £10k per year.
Broadband only has high speed in one direction. Saving 2GB (half a DVD) of information on-line on a 256kb/s (standard broadband upload speed) connection means waiting around 20 hours to achieve. What happens if you have video? audio or large picture files? The author has met customers who have 300GB of information on discs. One colleague gave up up-loading his photo collection after waiting 3 days only to discover the process was only 30% complete.
Think carefully about what type of information you want to share and with who. If most of it is for your colleagues in the office where your PC is,then a shared computer or networked file share is more than sufficient. If you are on the road once in a while and rarely need access to your information,then an on-line file share may be overcooking a simple issue. There solutions out there that allow you to access remotely your PC or server such as “GotomyPC” or “FTP” (File Transfer Protocol) when on the road. Conversely,if you have a lot of information that you want to share with a lot of people outside your organisation such as suppliers,customers or business partners then an on-line file share,such as huddle.net,may be highly appropriate.
Software
Many of you already use accounting software or stock keeping software –perhaps you have documents in a legacy format for a word processor that you never bothered to upgrade. Shifting your I.T. services to an on-line provider may mean migrating your data into the new application. The enormity of this task can be a) severely under-estimated and b) the cost of which may wipe out any potential cost savings of the move to another solution. Can you do without migrating and use the new application straight away? Does the new on-line software accept your legacy file format? Does the service provider provide a data migration service? Does the on-line service at least integrate with your existing application?
Hosting legacy applications that were on your old PC may not be such a fundamental roadblock. You can now easily host on your new machine an “image” of your old machine on your new computer so you can still run old programs or access archived data. This feature is called “Virtualization” and common tools include VMWare.
Using software via the internet presents its own problems. For example,most broadband packages share the internet connection with about 20 other users (what is known as the contention ratio) So. Guess when most consumers wants to use the internet? That’s right – lunch time and in the evenings. This means that if you want to use an on-line service to edit your word document then you may find that the application slows down very quickly or stops altogether. Having your word processor on your PC / laptop avoids this issue as you don’t need to go on-line.
In addition,business broadband packages offer better contention ratios,improved service availability and up-load speeds compared to comsumer broadband packages.
Your Information
Your information is arguably the most important aspect of the debate. There are several key considerations at stake:
- How much data will you be storing and how much will it cost? Don’t forget that your email takes up storage in addition to your documents). I did a quick survey of three vendors and found that if you want to back-up 10GB of data on-line you are looking around £50 per year,which is about the same price as an external hard disk that has back-up software already installed. Depending on how you treat your hard disk and what brand you buy,you can easily make it last two to three years – meaning it becomes a much cheaper option. Having two disks and swapping them with another colleague on a weekly basis means that your colleague and you are covered should one of the disks go missing or disks fail.
- Where will your data be stored? Is it going to be in a highly secure environment? Is it within the E.U? This is certainly important if you hold employee records,customer data or personal data of any sort. You will be in breach of the data protection act should personal data be found outside the E.U. (see http://www.ico.gov.uk/what_we_cover/data_protection.aspx for more information) Most data centres copy and segment the data across the globe to improve redundancy and availability. However each country has its own laws on data protection – so your data may be subject to different laws . In addition,your data will probably shared on the same service as other competitor’s information. Do you want your data physically on the same machine? If not,having dedicated servers are very expensive in on-line hosted environments. For example,to have a dedicated server to your business in a datacenter costs from around £3000 per year.
- Who has control of your data? Asking someone else to manage your data,as in an on-line storage / back-up scenario means someone else has control in addition to you. What happens if you decide that the provider is not cost effective and you want to remove your data to another site? Can you be sure that the data will be deleted? Check the terms and conditions to see under what scenarios the service providers would lock your account. Finally what are the vetting procedures for the technical staff? What management procedures are in place to ensure that information isn’t “leaked”?
Services,Support and monitoring
Some providers only provide an on-line backup service (e.g. Mozy.com),others provide provide file storage,collaboration and web conferencing (e.g. Huddle.net) Yet others include in addition email and instant messaging (e.g. Lotuslive.com). So there are a few more questions:
- Do these services mean you can do new and necessary things that you couldn’t do before or do they save money from elsewhere?
- What Cloud Computing services do you actually want?
- Do you require services to integrate with each other? e.g. Email with a Customer Relationship management service.
- Do you want one service provider for all your chosen services or do you want to spread the management of them across several providers – reducing risk but increasing administration and cost?
- What is your budget?
There are many different types of support offered by on-line providers. A key criteria is to determine how critical access to your information / email / service is to your ongoing business operations. These include a variety of service levels and can be the most expensive:
- Discussion forums to post issues that other users or service support monitor and reply to.
- Email support during work hours with no fixed leadtime for response
- Pay As You Go premium rate telephone support for technical issues
- 24 hour telephone support with a fix time ranging from 48 hours to 4 hours
- Account management and escalation.
A more fundamental question is:Should you outsource your critical applications and information to another service provider? Will they have the support necessary and contractual obligation to keep your business going? If something goes wrong,who will you go to resolve the issue? Bear in mind that with an on-line service,you now have additional dependencies to cater for in case something goes wrong:
- The infrastructure company (e.g. BT or Virgin Media)
- The Internet Service provider (e.g. Plusnet or BE Broadband)
- The on-line service company (e.g. Lotuslive.com or Huddle.net)
Summary
Consider:
- What you will be saving in hardware and software costs if you move on-line
- Whether your internet connection can cope with the demand required
- What data and applications you actually need on-line
- How critical and sensitive your data is
- How much mobility you and your colleagues actually have now and where they work.
- Whether you want to outsource your critical applications and data to a service provider –and forsake some of the control and security you have currently.
Given these considerations,moving your I.T. to Cloud Computing services may provide you with a more complex,perhaps more risky and costly endeavour. So what are the alternatives to Cloud Computing?
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