Business Gets a Bit Cloudy for the SMB

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 As published in the Goering Center newsletter:

By Louie Hollmeyer
Director of Marketing, Advanced Technology Consulting
June 2014

According to IDC’s recent MarketScape* assessment, 69.7 percent of midsized organizations use the Cloud or have plans to implement within the next 12 months. And, 34 percent of small organizations (<100 employees) are also doing so or plan to do the same.

Cloud technologies are providing significant benefits, including cost efficiency and scalability, to companies of all sizes—not just enterprises. The Infrastructure as a Service (IaaS) Cloud model aligns quite well with today’s on demand, pay-as-you-go mindset. No longer do businesses have to buy excess capacity. Buy what you need now and add more later when you need it.

Key factors driving Cloud/IaaS adoption include:

  • Commitment to growth – businesses need an IT infrastructure that provides flexibility and scale for innovation, while supporting competition with larger organizations.
  • Lower initial investment/higher rate of return – midsized businesses are experiencing a higher rate of return by outsourcing their needs to the Cloud, but the true value of the Cloud isn’t cost savings, but rather increased scale, function, and availability.
  • No more server upgrades/data center (DC) expansion – if you’ve ever approved budgets for hardware upgrades, this is pretty straight forward, and you no longer have to over buy and attempt to anticipate future needs.
  • Capex to opex – leveraging appliances and software in the Cloud on an as-needed basis eases cash flow.
  • Strengthened business continuity (BC) – diminish the chances for service interruptions, outages, and downtime by outsourcing to companies with a main focus on IT.
  • Disaster recovery readiness – an extension of BC, Cloud DCs have layers of redundancy and recovery capabilities above and beyond on-premise DCs.
  • Improved security – is it worth the resources to continually manage this constantly moving target, with increasing importance everyday?
  • Refocused/prioritized IT staff – shift IT resources to mission-critical activities closer to the prospect and customer interactions; improve the customer experience.

Efficiency and simplicity are key here, eliminating the need to invest in infrastructure provides agility and allows midsize businesses to focus on core competencies, not IT infrastructure.

Communications Infrastructure

The backbone of any Cloud or IaaS strategy lies within your communications infrastructure—voice and data networks. It’s critically important to equip a business for this environment with the proper networks.

According to a recent IBM Institute for Business Value study, IT Infrastructure Matters, “less than ten percent of organizations say their existing IT infrastructure is fully prepared to address the proliferation of mobile devices, social media, big data and Cloud computing.” The good news is bandwidth, which is critical to Cloud plays, has become more reliable, cost effective, and available.

Migration Starts with Cloud Telephony

For most small to midsized businesses, Cloud migration will start, or has started, with telephony. Migrating voice to the Cloud tends to be a practical starting point for midsized businesses. In many cases these businesses are replacing an aging PBX infrastructure. The hosted VoIP solution is the strongest play and heir apparent to an old premised-based analog system.

In fact, midsized businesses have been the primary market for emerging Cloud telephony services. Cloud telephony is an economical way to get the benefits—productivity features and functionalities—of progressive applications such as Unified Communications (UC). This model is often referred to as Unified Communication as a Service or UCaaS.

Cloud Migration Requires Collaboration at C-Level

As Cloud computing begins, spearheaded by hosted VoIP, decisions are increasingly moving into the C-Suite. This was formerly considered the IT department’s responsibility, however, business decision makers are viewing Cloud as vital to the business, not just a support player (i.e. your Cloud strategy should be tied to your growth strategy).

While many organizations are adopting the Cloud and moving to IaaS, it doesn’t necessarily mean they have a Cloud strategy. IDC defines an optimized Cloud strategy as 1) a broadly implemented Cloud-first approach that is proactively managed, and 2) clearly drives business innovation while improving IT operational efficiency.

If you’re making a move to the Cloud or have already started down this path, a strong collaborative is needed between executives and technology solutions experts. As technology evolves, converges, becomes more complex and convoluted, businesses continually require solutions expertise. This expertise will help you identify the right partners and minimize the risk of burning time and resources on non-core elements of your business.

*IDC MarketScape: Worldwide Datacenter Hardware Support Services 2013 Vendor Assessment

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