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Top 5 Things SMBs Don’t Get About Cloud

The term “SMB” covers a wide range of entities, all with varying business models, products, and associated needs. When thinking about cloud as part of their overall business strategies, many SMBs fall into two general categories: Those who get cloud, and those who don’t.

What do we mean when we say “get” cloud? Most companies at this point are well aware of cloud, if they haven’t already begun using it. By “getting” cloud we mean understanding the benefits not only of the platform, but the way it can be delivered.

Logicworks’ CEO Ken Ziegler has gone on record defining cloud as inherently off internal balance sheets. This presents a range of related services and benefits that many SMBs don’t realize they could be tapping into with a managed cloud approach. Some businesses understand the model and are happy to cede responsibilities and management to an outsourced cloud provider. Other companies believe that their platform, app, or product is so unique that letting a cloud provider run their infrastructure is a slippery slope to ruining the business. This latter group, however, is missing out. But what, exactly, do many SMBs not realize they are missing out on? Here’s our top five:

1. Managed Service – Sort of obvious, but understanding the value having an outsourced cloud is really where a mindshift must occur. There are many benefits related to have a manged service provider run your infrastructure. At the business level, the most compelling reason is the shift away from a capital expenditure model to a reduced operational expenditure model. However, many businesses continue to prefer, whether through stubbornness or lack of knowledge, to push an “in-house” agenda. This increasingly becomes a burden as a business grows and IT becomes an expenditure anchor rather than a lean, revenue-generating unit of the business.

2. Experienced IT Bench – The reality is, contrary to what most businesses internally like to feel, that almost no app, product or website is unique. There can be a mixing of functions or usages that is novel, or even a new platform to deliver services through. But if its being run on technologies that exist, an MSP’s technical bench has probably seen it before. And that, by the way is a good thing. They can bring to bear years of accumulated experience to every new client engagement, helping to proactively manage growth, while also knowing enough to adapt and learn if an app is truly based in new technology.

3. 24/7/365 – Staffing 24/7 requires three eight-hour shifts a day. This means a business needs to have three to five additional employees to manage an infrastructure 24/7, and that’s not including any illness or vacation considerations. Realistically to achieve the most optimal results, a company is probably looking at hiring around seven or eight full-time employees to achieve the level of reliance and consistency it needs. And this is only at the level of one department. Is the in-house staff going to do it all — software, hardware, structured wiring, data center maintenance, and everything else? Or does each of these requirements get its own dedicated staff? An MSP staffs continuously on all fronts – from the data center to server maintenance, to software support, database support, etc. So what’s more cost-effective?

4. Scalability and Cost – There are lots of ill-planned costs associated with IT.  The cost to scale is often an unaddressed question for businesses dealing with the cloud. Is it linear? Is it exponential? There are also other costs that a managed service provider (MSP) helps regulate. Is your average business going to go out an buy a $100K monitoring system for their infrastructure? Probably not. Working with an MSP can ensure that your infrastructure has a best-in-class monitoring suite focused on it 24/7. MSPs have the economies of scale to purchase enterprise grade equipment and pass along access and savings to their customers as a service. Enterprising monitoring, storage, architecture, multiple Tier 1 Internet providers at every stage.

5. Unbundling of Liability – In the event of downtime or breach, who is ultimately liable? This is an important question, especially in circumstances that have had some impact on a business. If a business is going it themselves and a breach occurs,  the how and why almost don’t matter from a liability perspective.Everything that went wrong is on that business. If that same business were using an MSP, and a breach occurred at the infrastructure level (or any layer which the MSP would be managing), that’s on them. Depending on the business level agreement, there is a range of remuneration that can occur. However, considering the level of technical expertise that a seasoned MSP brings to each client relationship, the likelihood of such a failure or breach occurring is far less that if a business were planning to do everything in-house.

Read more about outsourced technical expertise here.

Read more about the business rational for cloud here.

Read more about cloud benefits here.

Thoughts on this or any piece on the blog? Let us know @CloudGathering on Twitter.

By Jake Gardner

Posted on January 28, 2013 in Cloud Computing Industry, Cloud Perspectives, Private Cloud

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