The big buzzword – and success - of 2010 has been Cloud Computing: data storage and services delivered entirely online. You can run your office email (using Exchange), teleconferencing (using LiveMeeting) and a host of other applications entirely online.
The benefits are not just the fact that you can access your data from anywhere. The biggest factor for small businesses is financial predictability. Cloud services are available for a flat per-seat or per-use monthly fee, which makes planning out costs a doddle. And because a third-party provider will take care of all the hardware, maintenance and security, there’s no upfront investment in computer equipment.
All of which begs one rather important question: why on earth would any company bother installing their own server?
Chris Timm, MD of Microsoft Small Business Specialist Partners, TGC Computer Services in Basingstoke says that the ‘cloud or server’ discussion needs to be re-evaluated; in fact, businesses shouldn’t look at it as an ‘either-or’ choice at all.
Why go beyond peer-to-peer?
He begins with a salutary lesson for companies without any sort of server architecture: “An investment in enterprise IT makes sense for companies from as little as three employees today; whereas it was previously often economical to stick with just PCs on a ‘peer to peer’ network until you grew to ten people or more. Now, the costs are sufficiently low that the benefits of server systems make sense much earlier”. With a server:
· All your information is in one place, so it’s easier to search for files and data.
· Backups can be automated.
· Security can be centralised.
· IT support becomes easier and cheaper, because each PC can be kept consistent, and centrally maintained.
Benefits of an in-house server
Those are fine arguments for enterprise technology in small companies; but cloud services offer most of these benefits, too. So why invest in an in-house server?
Timm says; “Well, first of all, there are plenty of bespoke applications which are simply not available in the cloud, and never will be.” Everyone from restaurants to recruitment consultants to estate agents use professional services software which is not available online.
Then there are the many businesses (for example creative media) whose Internet bandwidth requirements will simply be too high to constantly be sending data like HD video up into the cloud. Similarly, companies using massive datasets (for example sales lead lists) will neither want to send those large files into the cloud, nor to add an extra external provider into their security chain.
Then, there are the many (often free) services in the cloud which are simply unscalable. Timm says “Many companies have found to their cost that a great free service is available online, and then their company grows to a degree to which the online service simply can’t scale. They’re back to where they were at the outset: needing an economical service, but this time facing a much larger job to port over existing data to a new service provider. That’s why so many companies take advantage of cloud services for well-resourced services like email; but then still use high-quality, off-the-shelf servers for bespoke applications and local services like user authentication and file sharing.”
Indeed, Aurora, the upcoming latest version of Microsoft’s workhorse Small Business Server is designed to be used in exactly this way; handling local data storage and software requirements efficiently, whilst syncing perfectly with cloud services.
The economics of server maintenance
This, says Timm, will be the ideal solution for the coming year or two. “I absolutely believe in cloud services, and I have no doubt that online delivery is here to stay. But a mixed approach will mean any business can have all its bases covered.”
Does this mean doubling the cost? Of course not.
“Cloud services and a server are entirely compatible, and designed to work together in an economically viable way. For example, we often now set up systems whereby office-based users check their email through Exchange on the local server, whilst sales guys on the road connect via the cloud. In all cases, the software automatically syncs up everyone’s experience in the background. Also, buyers should remember that servers and cloud services both extend the lifespan of existing desktop PCs. By moving functions off the desktop, you’ll lighten the load on your PCs; so there may be more life in that creaking old tower system yet.”
But what about those nagging maintenance costs? How can an in-house server match the flat-rate management fees of cloud services? Says Timm, “Traditionally, small companies have paid the price when things go wrong. The traditional ‘break/fix’ model of IT support used to mean that it was in the interests of a support company to charge hefty call-out fees to solve business-critical emergencies – and, being paid by the hour, to take their time doing it! Instead, we, and many other forward-thinking support companies, offer a Managed Services approach. We solve problems for a fixed monthly fee, so it’s now in our interests to solve problems quickly, and even more valuably, to prevent them from occurring in the first place through a proactive attitude to IT management. We therefore monitor hard disks and the network to spot problems before they happen – we’ll know remotely when a hard drive is about to fail, or when disk space is running low. We’ll know when a backup has failed, and why, and how to fix it. The Managed Services approach means in-house servers can operate on exactly the same flat-rate, predictable model with no nasty surprises as the cloud model.”
Microsoft recognises that cloud computing is an essential component of the modern workplace; but they are an addition to the IT toolkit, not a complete replacement. For the majority of companies, the in-house server has plenty of life left in it. Timm adds, “With virtualisation (running many operating systems on one server to maximise service, efficiency and green credentials) and effective IT management, the humble server can offer similar economic performance to cloud services, and a hybrid of the two will ensure that the business always has the best IT for each job.”
I would like to comment saying that in my experience none of my employers business was fully compatible with cloud services (unless we are talking just of e-mail and telephony). So I agree with Timm when he says that there are plenty of applications that simply do not exist in the cloud because of their specificity. General services have nonetheless a bright future in front of them, and data sharing is one of them, even if is it is so hard to foresee the evolution of a technology (such as the cloud) that is so bound to the human (unpredictable) behavior.
Definitively a nice post.
Whilst I agree with Timm that many professional services applications are not available "stand alone" as cloud services. He ignores completely the growing numbers of "hosted desktop" providers who aggregate all the clients software and then publish it back within a recognisable windows desktop environment.
The customers get the same predictable cost and scalability - but have the advantage of all their applications and data in the same place. Just as they would get with a server in their own office but without any investment in server technology that still has to be replaced at end of life and maintained throughout its operation.
Good article and we at Technology Management agree that a mixed enviroment of cloud and on premise can work for losts of companies and its a good way to start your migration to the cloud. But hosted desktops are getting popular and allows the hosted providers the abillity to be a lot more flexible than Microsoft and their Office 365 offering. We can take 3rd party applications and move them to the Cloud as part of a hosted desktop with a full rich Windows desktop with the Windows 7 Aero desktop. There is not a solution that is right for everyone so we continue to offer full on premise, mixed enviroment or complete cloud solution. Make sure you get whats right for your organisation.
Timm is correct I am an IT manager and it cannot be a one stop shop in the cloud. I split the services to in-house and cloud. Exchange and CRM is the only services I plan to keep in the cloud. Anything data heavy will stay in house. I would not say the cloud is that much cheaper with backs added to the cost. But you do get enterprise power like 99% up time and your server is on a much better platform.