If you are reading this then you are probably considering whether your business should be using online services or buying a server? You may just be curious about online services and what they are or if they are right for you.
There certainly is a buzz within the IT industry around cloud services and many willing providers jostling for position.
So this article is designed to help you understand the role that cloud services play and what they can do for you but it also discusses why this isn’t right for many UK firms.
You are all trying to do what’s right for your businesses. We self-employed folk need each other and I give this advice so that you can make an informed decision for yourself. Ultimately you are the boss and you want to get it right. I hope this article helps.
Please comment if you find any of it useful. It’s always nice to get feedback, good or bad.
In my day to day work as an IT consultant, I’m asked ever increasingly about online services such as Hosted Exchange or online applications such as MS Office.
Those of you who are looking to replace old servers may see using hosted solutions as a cheaper solution, they often are not.
This is because you will never own your Exchange server if you use a cloud or online Hosted Exchange provider. Whilst there are some cheap deals to be had, you should be very careful of jumping into bed (metaphorically speaking) with those providers.
Cheap is often anything but cheerful in the long run. As a guide, at time of writing, the average trusted providers out there are charging around £9.00 per month per mailbox. This usually gets you a free copy of Outlook 2010 or 2013 for your PC and 25GB of mailbox storage as well as full functionality of Exchange such as mobile synchronisation shared calendars, contacts and public folders.
I have seen offers as low as £2.00 per month but in contrast they give 500MB limit on mailboxes and offer no free software or shared anything. You will quickly discover this is not enough even for those of you that “don’t get a lot of email” or just starting out. The business model for these providers is sell lots of small cheap accounts. You will usually find that support provided is therefore online ONLY such as email or forum based which is fine if you have lots of time on your hands.
If you are building a successful business then time is money and you need to know you can pick up the phone and get any issues resolved quickly. That support comes at a price so my advice is don’t go for cheapest.
So let’s just do some quick maths.
Assuming you go for online Exchange at £9.00 per user per month and lets have an office with 10 users to keep the sums simple.
£90.00 per month (£9.00 x 10 mailboxes) for five years = £90.00 x 60 months = £5,400.
A Server that can run Exchange is going to cost somewhere close to that figure with Hardware, Software & Setup labour costs, however you would own that kit and the payments stopped long ago even if you bought it on finance.
Add to this that you also have file storage, maybe SharePoint too.
SharePoint pricing currently is £25.00 per user per month and online shared storage of say 1TB is going to cost hundreds per month. You will have to pay for it forever.
Today it is cheaper in the long run to own your server. I suspect this will be the case for a good time to come.
Now we may see hosted service prices come down gradually over time but you will still continue to pay whatever price the provider asks because your business will be fully dependant on these systems.
If you only have 1-5 users then hosted is much more attractive. I believe those early days in business you need to keep your start-up costs as low as possible but read on.
Let’s also consider that if the internet access goes down today and you can’t send any email as a result it is a major hassle. BUT if your files are online you can’t even work on anything while you wait for your internet access to be restored.
You had better be sure to have a bullet proof internet connection.
Let’s look at the Pros for moving to the cloud
1) There is little setup so you may be able to manage this yourself
2) Provision of the service is someone else’s problem (No support costs)
3) Available from anywhere with a good internet connection.
4) Real-time collaboration with colleagues in the field is made simpler
5) Backups usually included.
6) Scalable, as you grow your business you can pay for more storage and/or services
7) No upfront costs but if you need help migrating your data there is often a charge.
8) Budgets – you should know month to month what your IT costs are going to be. No surprises.
Here are the cons.
1) You really do need a good connection to the internet to access services and data. Many areas of the UK are currently unsuitable, especially rural locations. No internet = no services or data. Put the kettle on, send your staff home, put your feet up.
2) Managing it yourself might not be a good thing, shouldn’t you be running your business?
3) Whilst the provisioning of the service is not your problem, what happens when it goes down? Notice I say when not if. Often any outage will be very short term, say a few minutes but when it happens you will realise just how much you have come to rely on your provider. If you haven’t got a person’s name, someone in authority who can sort it for you, you may struggle to get your issue resolved in a timely manner. If you do go hosted, get a name and their supervisors name from the off.
4) Who owns your data? Make sure you keep a local copy of everything or BACKUP to an ENTIRELY DIFFERENT PROVIDER.
5) You might be thinking, “If I stick with a main stream provider I can be sure that it’s all OK.” It is better but banks go bust, countries go bust and large firms are not immune. I’m not trying to be negative or anti-hosting. You must be aware of the risks and take appropriate measures to protect your business. The best way to insure yourself against loss of critical data is to have a copy/backup. Own your data, don’t leave it to chance.
6) You will always have to pay your subscription and the provider has the ability to withhold services for late payments.
7) Data protection – make sure your data is hosted within the EU at the very least. You are responsible for any sensitive data your business holds on clients, suppliers and staff. If you don’t know where your data is, often spread geographically for redundancy, then you could be in breach of data protection laws. This just means you need to ask the question of your provider and while you are at it ask them for the name of their data controller. Every business must have one by law that holds personal information. It’s another name of someone in authority at the provider at the very least. The definition of personal data is “any data from which an individual can be identified” please see the Information Commissioners Office web site for more details if you need help. Their FAQ page is very good with clear information for business owners.
8) Hard to move or change providers. Migrating your data from one provider to another is never an easy process.
Summary – Cloud services can be great for start-ups but they need good internet access. Any business with poor broadband services should avoid moving their data and services out of reach.
Take advice before you commit. Remember you don’t have to use just one or the other. Many businesses use both. The most common I’ve seen is using hosted Phone Systems & Email but keeping data local in your own office as an example.
I hope this article has made you think about hosted/cloud based services. Please let me know your thoughts on the subject. Ask any questions here relating to this and I’ll answer them within 24 hours usually.
Thanks for reading. I wish you every success in your venture.