On Dec. 11, The Mercer Regional Chamber of Commerce Technology Committee will be hosting an Economic Development Series event with Stephen Deming of Microsoft as the Keynote Speaker. Steve's topic of discussion will be: The Pros and Cons of Moving Your Business into the Cloud.
I've written an article providing some background on Cloud Computing Services, and what factors you should consider when deciding if outsourcing business-critical applications software to "the Cloud" is right for your company.
I've focused on two examples of Cloud Computing that I'm familiar with because they're SyncraTec offerings: Microsoft Dynamics CRM Online and Hosted Exchange Services. My objective is to provide food for thought in advance of our upcoming event featuring an outstanding keynote speaker: "Technology Evangelist" Stephen Deming, which is to be followed by a panel discussion, and audience questions and answers. Be sure to look for an invite to this upcoming chamber event, Friday, Dec. 11th, 8:00 a.m. at the Trenton Country Club.
As a computer consultant, I am often reminded of how quickly the technological landscape changes. When I was getting my MBA at Rider in the late '90's, it was suggested to me that computer systems “will configure themselves”, and there would thus be no need for business applications software consultants to implement systems. Flash-forward ten years; I'm sitting in a marketing networking group on a Thursday evening, and I'm challenged to respond to how I will adapt when Microsoft Windows finally becomes obsolete.
So, here I am right now, composing a blog post on TypePad. That would be a cloud computing service. I pay an annual subscription fee, and I can access software through an internet connection, that enables me to maintain a web blog. It has formatting capabilities, editing, categorization; it allows for feedback to be posted to my blog, I can integrate it with my company's web site, my facebook account, Twitter. You name it. It's a just one great worldwide web application.
Does it matter how I access TypePad? I don't think it matters that much. I'm using Internet Explorer 8 web browser running on a Windows 7 laptop, connected to a Windows Small Business Server 2008 network, with Verizon FiOS internet access; but I think I could just as easily compose blog posts with a Motorola Droid wireless device running the Google Android operating system, and connected with Verizon's broadband wireless.
A couple of common theme's here: by definition, to run cloud computing services, you need to be able to connect to the internet. And, let's face it; a reliable high-speed connection is the only way to go. But even the case of how you accomplish that reliable high-speed connection is “up in the air.” I’m blown away by Clear and 4G wireless networks offering up to 1 gigabit-per-second bandwidth. What’s next? We started with dial-up (remember 56 kpbs modems?). Move ahead to DSL and you’re blazing along even faster on you old copper telephone lines at 256 Kpbs – 1.5 Mbps. Compare this to dedicated T1 lines with 1.544 Mbps (at $275 to $1,200 per month). Cable modems give you 6 Mbps download and 1 Mbps upload. Verizon FiOS comes along and you’ve got 15 Mbps down / 5 Mbps up on a fiber optic line, if you can put up with their horrendous customer service. Now, back to the wireless. Again, you’ve got dramatically improving technology. 3G wireless broadband connections from cell towers to mobile device cellular modems (iPhones, SmartPhones, PDAs, Blackberrys) get you online with 14.0 Mbps down / 5.8 Mbps up. This mobile wireless data service is pricey for the average user, adding $30/month to your cell phone bill on top of your calling plan. And its $45 extra for per month if you’re classified as a business user (more on that later). We’ll have 4G soon in Philadelphia with 100 Mbps when you’re cruising down the highway, and up to 1Gbps if you’re stationary. I know, I don’t know what I’d do with all that bandwidth anyway. But there’s an insatiable desire for bandwidth, accessibility, and applications.
Consider the hypothetical scenario, you have son that plays 10 year-old intramural baseball, and there’s no limit on the number of walks (or runs that can be walked-in)…and you have to be there because, after all, you’re a supportive parent. But you know that the Yankees and Phillies are playing a World Series game that night, and you know that you can connect on your iPhone and get a live video feed. Well, you might just keep that thing on to check the score every couple of innings, if you know what I mean.
So, we’ve touched on applications, and got some background on connection speeds. Applications are really the driving force behind Cloud Computing Services. Applications are the reason why we want to connect. Look at the Apple App Store: where you can download thousands of iPhone applications. But our focus in this article will not be on Xbox Live, iTunes, Amazon, eBay, or even LinkedIn, Facebook, Twitter, MySpace, YouTube, or one of my personal favorites – Flickr.
I’d like to address applications that you can use to run your business. Let’s say accounting systems or enterprise software, customer relationship management systems, document sharing (collaboration), and good old-fashioned e-mail.
Consider Salesforce.com, a company that sells CRM systems on a per user per month basis. In contrast to Salesforce.com, whose business has always been in the cloud, Microsoft Dynamics CRM has been available for a long time as an on-premise application, and more recently is available online. Microsoft Dynamics CRM Online will allow you to customize your online experience to a certain extent, but as you may find with cloud services, there is a limit to customizing and integrating because your software is typically running on shared servers, and your custom code or integration and its associated complexity introduces risk and cost to the process. So here we see one of the limitations of cloud computing. Think of the service as an offering that is shared with many other companies’ systems, running on the same servers.
But, before getting into the limitations, and the potential workarounds, let’s take a look at what cloud computing services can do for a small business that needs a CRM system. CRM systems enable you to build and maintain a database of leads, prospects, accounts, contacts, and opportunities that will allow you to develop strong customer relationships. It’s a concept where each touch with a lead, prospect, or customer is recorded in a system that is accessible to your users, so that any person picking up the phone to talk to someone at this account will know the history, and be able to communicate effectively and confidently. The system allows for pre-arranged nurture marketing campaigns that will systematically reach out to customers on a periodic basis to keep your business top-of-mind. The system handles all things customer-centric, including customer service, but can also be customized to address line-of-business applications that require a similar framework consisting of web-based access, a shared/centralized relational database, ability to create new database entities, customizable data entry screens, user-friend querying, advanced reporting and business intelligence capabilities, integrated security, and powerful workflow for automating routine business processes.
If you think about the “framework” described above, which of these functions cannot be provided over the web these days? You’ve got an internet connection, you’ve got a PC with a Web browser, you sign up for a service, and you’ve got CRM! In this regard, CRM is a good example of what’s capable of being delivered via cloud services. It’s not a simple application, but the sophistication of the software masks the complexity inherent in the multitude of relationships between the various entities from Leads and associated Activities such as Phone Calls, E-mails, Notes, Addresses; to Accounts, Contacts, and Opportunities.
So what’s the big advantage of cloud computing? First and foremost, you can get started literally in a matter of minutes. In many cases, you can get a trial version also. The up-front investment is minimal. You don’t need the network infrastructure with servers, software, and security to deploy the system. So, as I like to say, you can get connected with enterprise-class information technology on a small-business budget. The Microsoft Dynamics CRM system also integrates with your Outlook, which allows you to track e-mails into the CRM system, and easily promote Contacts from Outlook to CRM. The outlook integration is accomplished with a light piece of integration software that enables your Outlook to communicate with your CRM Online account. You will thus have two “clients” to choose from: your Internet Explorer Web Browser (“web client”), or your Microsoft Office Outlook (“Outlook client”).
What are the disadvantages of cloud computing with CRM? Major considerations to be considered before going with any cloud computing or cloud business application software solution are the security, privacy, and mobility of your business data. Who owns the data? How easy will it be to get your data back in house when you want it / need it back? How easy would it be to move your data to another system? How often is the data backed-up? If you mess up the data yourself, can you restore from the latest backup? Who has access to look at your data? How in depth can you customize the software? How reliable is their network infrastructure? How reliable is your internet connection? Understanding the answers to these questions is imperative to protecting you business operations.
Let’s take a look at a few of the “disadvantage” questions and considerations. Customization is one that comes up quite a bit. The online version of the system can be customized to a certain extent, beyond which you need to consider several alternatives: bring it in-house (on-premise) or allow the system to be “hosted” by a partner. Thus, we have a truly outsourced cloud-based system in a shared computing environment (public cloud), then we have the option of a partner hosting our system on more of a dedicated server that would allow more extensive customizations (hybrid cloud); or we can deploy the software on our own servers which we can then make accessible over the internet ourselves (private cloud).
Another disadvantage cited is privacy. With online computing systems, you’re entrusting, say, your customer or accounting data to a data center where you’re obviously not in control. It’s a matter of trust, and reading the fine print of the contractual agreement and your host’s privacy policy with regard to how your data is protected. I would also say to check that the hosting site is a tier 4 data center.
There’s also a lot of talk about data lock-in. This is a real-world concern as well for on-premise systems from the point of view that it is often not easy to migrate data from Act! or Goldmine to Microsoft Dynamics CRM or Salesforce.com, and back again, whether you’re on-premise or in the cloud. There’s no silver bullet here, but take a good long look at the data migration (import/export) tools that are provided with the system. And again look at the contractual data policies to make sure you can get your data back in a form that’s going to be useful, without suffering constraining fees.
Data security also includes Service Level Agreements, meaning how reliable is the data center, its applications, and its data. Look for a 99.9% or better scheduled up time. That doesn’t mean they can’t say “we’re going to take the system down this coming Friday night from 10:00 p.m. to 2: 00 a.m. Saturday morning for maintenance.” Keep in mind, one of the benefits of the online system is that you’re getting the latest version of the software, with all security patches and program updates maintained for you. But a guarantee of 99.99999% uptime means your system will be down less than five minutes per year, which is obviously even better.
Data backups are something you need to be aware and careful with. You need to not assume that the data backups are there for you when you need them. For example, if you read in the agreement that the system is backed up nightly, that’s great. But…I always say that backups are not the most important thing, restores are. Let’s say you’re getting confident with the system and importing Accounts through a supported batch process. You find that one of your uploads has a minor error. So, you’ll perform a deletion routine, except you forget to apply the filter first, and you blow away all your Accounts data. Arrgh. You then say, okay, it’s a good job they have a backup that I can use from last night. Let’s give them a call at the data center and ask them to restore my system from the latest backup. If this is when you realize that their backups are for their system crashes / restores, and not your accidental data deletions, then your “Arrgh moment” becomes a whole lot more painful. If you do batch updates of your data, you need to be very careful, and you really should have your own backup plan. Usually, online business applications will have a “web service” that you can connect to, which will allow you to pull the data from your online system to an in-house data store. If you don’t have this kind of in-house backup, and a means to put the data back to its original state, then you need to limit any kind of batch updates to the data.
Another use for the web service to pull the data down to your own data stores, is to allow for on-premise data warehousing for business intelligence, custom reporting, and some level of system integration.
So, we’ve covered several pros and cons of an online CRM system. The question will come down to: is it right for your company? Do you need a sophisticated CRM system? Do you have the resources to deploy a network (with servers, software, licensing, security and other concerns like firewalls, SSL certificates, user authentication, updates, and patches); and do you have the resources to implement and maintain a CRM system with a backend database server, exchange server integration, etc. And I can’t emphasize enough that I’m certainly not saying that it’s out of the realm for lots and lots of small and medium-sized businesses to maintain a highly capable in-house networked computing system. But, if you’re just getting started, and you don’t have a network yet, but you want to kick-off a company with sales, marketing, and customer service mojo; then you can jump into an online solution with minimal up-front investment, and pretty good assurance that you’re getting a fully capable system.
A second example of online business software systems challenging on-premise solutions is in the world of e-mail. There has long been webmail, which would be one of the original cloud computing services. But webmail has its limitations. Webmail is typically provided by companies like Yahoo, AOL, Comcast, and Verizon. And if you’re using an internet service provider, and decide to switch provides, you can’t take your e-mail address with you. I see a lot of AOL users that want to stay with AOL forever because they can’t bear to give up their current e-mail address.
But webmail with Yahoo and Google domain names doesn’t help your corporate brand either. For small and medium sized businesses to look more professional, they’ll want to have email@theircompanydomainname.com type e-mail addresses (domain-name e-mail). Also, there’s more you can do with a corporate class e-mail account beyond looking the part. First off, there’s control over your employee’s e-mail accounts. If your employees are all using their personal Verizon webmail, or Yahoo!, or gmail, you can imagine that all their business e-mail and business contacts are intermingled. If those employees leave your company, chances are you’re going to lose some valuable contact information or e-mail history when they take their e-mail account with them.
Consider then, the potential of an enterprise-class e-mail server solution provided by a hosted service provider. Included with this service will typically be an e-mail client, namely Microsoft Office Outlook 2007. A quick configuration with you domain name registrar (he who hosts your web site) will allow for creation of “domain name e-mail,” as described above, which can be directed to the hosted Exchange service provider. You’ll also install an add-in program that provides the necessary integration to get real-time e-mail from the cloud-based servers. In addition, all of your contacts can usually be migrated into Exchange, along with your e-mail history (if needed) and calendar items. Authorized users can be given permission to view each others’ calendars which makes it very easy to plan meetings and schedule appointments. What may end up being the most important factor is that you have control over your users’ mailboxes (including e-mail, contacts, and calendars).
Moreover, the Outlook client in tandem with the Exchange server is guaranteed to make your employees more productive. Just the inbox search feature itself will save you time every day looking for e-mails sent or received. The system also integrates with other products so that e-mails, contacts, reminders, etc. can all integrate with your CRM system, for example, or your label printer, or your WebEx program. The program integrates with Word for mail merge. You can easily categorize your contacts, and look at different lists of contacts in different views. You can have customized e-mail signatures for e-mails you send to different types of clients. And you can even download your old AOL e-mails into your new Outlook program, so that you can slowly transition your way to your new e-mail address.
Also, with an Exchange Server, you can get mobile access to Outlook such that, no matter which device you log onto, you’re always going to get the latest, singular, version of your e-mails, contacts, calendars, task / reminders with no duplicate records, no duplication of processing (clean-up), and you won’t experience the “fragmentation-effect” of having some of your e-mail and contacts here, and some of your e-mail and contacts there. It’s another example of enterprise class information technology on a small business budget. Because you can get started on a hosted Exchange e-mail / calendaring solution for as little as $15 per user per month, and with a minimum of one user. (I forgot to mention above, with some CRM systems, you’re likely to encounter a five user minimum.)
So, we’ve looked at a couple of systems that can easily be implemented in a hosted, or cloud-based environment. Other systems are also becoming available in the cloud, systems which may have been held in-house for many years: cardex inventory systems, Quick Books, Microsoft Dynamics GP (the former Great Plains), GoogleApps, all things Salesforce and NetSuite, PeopleSoft, and SAP. Business applications, social networking, e-mail, calendars, photos, medical information systems…you name it.
The start-up cost is typically lower. My back-of-the-envelope calculation for the software / licensing costs of a Microsoft Dynamics CRM system for five users for three years is almost identical (excluding the accompanying platform server hardware and software). The CRM Online system costs about $44/user/month; for a three-year total of less than $8,000 for five users. Meanwhile, purchasing the CRM server software licensing with Software Assurance along with five CRM client access licenses is about the same total amount over three years. After three years, you would own the CRM software, and just be paying maintenance fees in year four and beyond. Of course, you’ll be maintaining your own network infrastructure and data as well.
I believe hosted / online / cloud computing services give small and medium-sized businesses another viable choice to getting their business off the ground quickly, with powerful systems used by their sometimes much larger competitors. There’s a lot to consider when entrusting your business data with an online service provider, but I think the case can be made that your data is actually more secure at robust data centers with high-reliability and high-speed data access. You’ll want to weigh the pros and cons carefully. You’ll want to see how the software integrates with the systems you already have in place, or systems that you want to put in place. And again, look for free trials of some of these systems to get a first-hand look at what’s available for the price per user per month; and weigh that against building out your own infrastructure.
Also, don’t forget that deploying in-house systems doesn’t mean you won’t be able to access your data over the Web. SyncraTec has deployed Exchange, SharePoint, CRM, and the Microsoft Dynamics SL Business Portal in a private cloud that enables us to access our systems / data from practically any Web browser where we can get a decent internet connection.
So, I can respond to the question of how I will adapt “when Microsoft Windows becomes obsolete” by saying that: it’s not what operating system the application is deployed upon that’s the most important thing. I can still access my CRM mobile via my company’s private cloud on a Google Android mobile operating system. Outlook is still the best e-mail client. I do have to access CRM Online with an Internet Explorer browser on Windows machine, but that’s probably not going to always be the case. Most Mac machines can run Windows these days anyway. iTunes runs on Windows. It’s only a matter of time before web-based software is browser-independent. Look at Web sites – they have to be browser-independent; and they’re the most ubiquitous cloud-based computer service ever! So, I believe it’s what the business application software / system can do for you, how well it integrates with your other systems, how much it costs you, how reliable it is, and how safe your data is that will drive your decision to run with a cloud-based (public, hybrid, or private) computer service or application, not what operating system it runs on.
Our job at SyncraTec is to help you find the system that makes the most sense; explaining the benefits, the costs, the risks, and the opportunities. Our goal is always to become a long-term, trusted information technology advisor for small-and-medium sized businesses, providing guidance on selecting the most appropriate solutions, and assisting with implementation consulting services. And maybe someday I’ll advise you how you can implement wizard-driven cloud-based computer systems that are intelligent enough to configure themselves!
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