One of the questions we get most about our cloud-based software is how is our office going to the cloud and what equipment do we need to buy to make the software work? We even had one user ask us if StratusVue would still work if they didn’t have the cloud installed in their office. It makes me chuckle. Technology is moving fast, and the construction industry is historically slow at adopting and understanding new technology, which is why it’s important to explain what every construction company should know about going to the cloud, and how a cloud-based solution can achieve the right blend and balance of investment in hardware.
There is an important distinction between a public cloud vs. a private cloud. If you move to a public cloud hosting solution, your data is stored in the provider’s data center and the provider is responsible for developing, managing and maintaining the pool of computing resources shared between multiple tenants from across the network. Some advantages to a public cloud are there is no investment required to deploy and maintain the IT infrastructure, flexible pricing options, high scalability, and reduced complexity because the cloud vendor is responsible for managing the infrastructure. Some public cloud-based providers are Microsoft Azure, Amazon Web Services (AWS), and Oracle.
A private cloud is when your equipment is located in a data center that is owned or leased by you. Typically, management and infrastructure maintenance are provided with a private cloud service, but the hardware, storage, and network are bought by and dedicated to a single client or company. Some of the advantages to this is being able to employ high levels of security, it can be customizable to suit your needs, and you can integrate your hardware into a hybrid solution between virtual servers and dedicated servers.
The basic definition of a server is a computer designed to process requests and deliver data to another computer over the internet or a local network. The server serves your data storage and applications to all your staff who run your business. And, as with any other type of technology, there is a shelf life and they need to be kept up to date due to advances in technology.
Here is an example of what I mean. Let’s say your company has 25 employees; you have an accounting system, a CRM system, a project management system, and an estimating system along with a few more programs that your company needs to run successfully. In this scenario, you need a primary domain server, along with a backup solution, storage capacity for all of the attachments, routers, and switches to control the servers that are accessible throughout the office, and either a full time IT person or a consultant to manage the patching and repairs.
This example also applies to 50 employees, 150 employees or even 500 employees. But, the larger the company, the higher the cost to keep the hardware working and up to date. In my example of 25 people, there are probably 60 endpoints that need to access your internal network. Endpoints are computers, tablets, printers, and mobile devices —just to name a few, and in order to support that environment, your equipment will need to be rotated and upgraded, on average, every three to five years. When replacing a server, you need to take into account the environment it is being stored and make sure it is safe from events like fire and flooding. It’s also imperative you have a disaster recovery plan in place for worst-case situations. All of these things compound the cost of having your own server.
There is no question that if you run a SaaS company that needs specific types of compliances, having your own dedicated server is the way to go, but if that isn’t a necessity, the costs associated with your own server is much higher than the cost moving to the cloud for primary access to your programs and files.
Before you purchase any computers, printers or mobile devices, the server and configuring the server might cost about $30,000 over four years or $7,500 a year. A dedicated IT person or consultant might be an additional $36,000 a year and then you will pay around $5,000 a year for storage and about $2,500 a year for miscellaneous hardware. You are already in for a minimum of $50,000 a year!
But, how much of that hard cost can be saved by moving your primary infrastructure to a cloud-based environment? By moving to the public cloud, you have no outlay of capital costs. Generally, the cloud is a monthly or annual subscription based on uptime or usage, and it takes the capital expense off your SG&A and moves it to the expense column. As your company grows or shrinks, the servers scale with you on an as-needed basis and the cost can be spread in a more consistent and predictable way. By moving to the cloud you reduce your labor costs because you don’t need a dedicated IT person on your team to manage the servers.
Now, let’s take a look at some of the advantages of moving to the cloud. Software in the cloud typically runs faster because it is not dependent on your internal infrastructure. This allows you to work from home or the job site and increases productivity within your organization. The cloud also brings increased collaboration. As long as your employees can access the internet, they can have access to critical business application. The risk of disaster is mitigated by a move to the cloud because the provider keeps your data tucked safely away in a secure data center. With dual authentication, your data will be kept secure, and with uninterruptible power sources, you have less risk of your platforms going down for any length of time. And, there is a greater competitive advantage it offers because it enables SMB’s the ability to operate like the enterprise companies. The flexibility also allows SMB’s to seize market opportunities faster and offers the ability to respond to customer needs in a timelier manner.
Moving to the cloud is a great way for your organization to get ahead, with some immediate savings and other savings over time. But, before you make any move, consult with your IT team and ask how they can support a move to a more scalable environment. Do your own research and look into the public and private cloud offerings to see how they will best fit in with the future of your company. But with both big and small companies making the move, combined with government and healthcare organization migrating as well, isn’t it time for you to take advantage of all the cloud has to offer?
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