Regional SMBs Still Asking Questions about Cloud Migration
Depending on where you live may determine how willing you are to embrace migrating to the cloud. That’s what our organization, IDS Systems (IDS), serving clients nationwide has discovered. Small and medium sized businesses in major Canadian business hyper-centers such as Toronto, Vancouver, Calgary and Montreal are more likely to adopt Office 365 than those in smaller urban centres, including Ottawa, London or Victoria. The smaller cities, it would seem, are a bit more skeptical when it comes to implementing Microsoft’s Office 365 cloud services.
Why are some SMBs questioning cloud solutions? As with most purchases or technical adoptions that fail to happen, the main barrier is a lack of understanding or appreciation of the value of the cloud solutions. SMBs are not only confused as to how they can best leverage cloud tools like Office 365, their business may not be suitable for the cloud. Traditional IT departments may have difficulty realizing the value of the Office 365 environment as they are not configured to support cloud offerings.
But many, especially those with a highly mobile workforce are realizing that now is the time to transition to cloud-based solutions. Overall, most companies are exploring the cloud, have strategies in the formative stage, and are beginning to realize that ‘we really can leverage cloud resources.’
There are two major motivations for organizations to transition to Microsoft’s productivity cloud solutions: the potential for cost savings through the online licensing update offered by Office 365, and the ability to provide a mobile workforce access to a company’s applications and data. Organizations should all realize cost savings in the cloud but it is those strategically seeking to use software more efficiently that are the best Office 365/cloud candidates.
For cloud solutions to be effective, it is critical that an SMB either already possess or invest in a robust Internet connection. Without it, the solution is not feasible. On the other hand, when using cloud applications, companies don’t have to worry about having the most up-to-date technology on all staff workstations, bringing longer life to workstations and reducing hardware costs.
Moving to the cloud involves a debate over whether it is advantageous for an SMB to purchase licensed software or adopt a virtual solution and pay for services on a subscription basis. So what’s the big deal? Many organizations realize that the costs to use cloud-based services and traditional licenses are not significantly different over the term of the license. This line of thinking assumes that transitioning to the cloud is purely a financially-motivated decision. If you are trying to work more intelligently and with greater mobility, a cloud-based infrastructure is more suitable to your operation and the hosted application expense can be easily justified.
A standard version of Microsoft Office is roughly $350. Given this figure, an Office 365 user (at $8 per-month) would accrue costs of about $288 after three years. Office 365 also requires increased use of the Internet and additional connectivity expenses. When these factors are all considered, the costs of traditional licensing compared to that of the cloud model are very similar. For a larger organization, the overhead is not as bad, but for a smaller organization to transition from a basic connection to a more robust Internet connection can represent a significant expenditure.
However, on-premise software requires the not insignificant cost of an onsite IT manager or contracted IT services to maintain the integrity of the locally installed software and to ensure that all updates are applied as necessary. This makes the cloud a simpler platform to operate, providing ubiquitous service and a built-in disaster recovery plan with all data backed up regularly “in the cloud.” Cloud services are also able to scale, up or down, which can make it easier to ramp up for short-term projects.
Companies in smaller business centres like the National Capital Region are more cautious when choosing a cloud solution compared to those in larger cities such as Toronto and Vancouver – which, presumably are less challenged in terms of networking capability and also more mobile. In Ottawa, our clients ask us many questions before they decide to transition to the cloud. But once they make it the decision to do so, they are 100% committed.
Some of the questions SMBs ask include, “How will this impact our network?” and “How do we conduct business?” as well as “What will happen with our backups and security?” When these queries are answered, fears are allayed and SMBs typically become more comfortable with a migration to the cloud.
Another barrier to adopting the cloud technology is simply sunk costs. SMBs have already invested in technology… so why abandon it and move to the cloud? There is a season for migration which typically does not immediately follow a prior major investment. In many cases, the customer needs to be already transitioning to virtualization. For example, if a SharePoint investment is about to be made, the existing application delivery model may not be as effective or could be more costly or more complex.
SMBs facing major IT upgrades in a year or two are in the best position to migrate to Office 365. Start your long-term planning now, including investigating your Internet connectivity/speed options.
SMBs in Toronto and other large cities differ regarding their desire to implement Office 365. They need to operate efficiently and effectively and want to be on the leading edge of technology, resulting in an ‘I need it now’ attitude. As a result, decisions are made more quickly. There is less consideration for the downstream ripple effects and the belief is that if cloud access causes a problem on the network, it will get fixed. Whereas in Ottawa and other similar areas, the attitude is ‘I want to make sure that all the problems are solved before I make the jump.’
The Office 365 landscape is still in the ‘early adopter’ stage, with many businesses waiting to evaluate the experiences of current users. The market is moving relatively slowly, but that’s common in our industry. With new software models, our tendency is to watch and wait. But once a certain threshold is reached, the floodgates open and organizations will be adopting the cloud solutions with far less apprehension.
In the meantime, we’re developing our skills in Office 365 adoption, which are conducted most often for professional/commercial users such as property managers, labour markets and service providers. We are developing a methodology to help clients considering a cloud solution to plan their migration and have appointed a senior staff member as our Director of Cloud Systems Integration.
The key is for clients to better understand their network and other IT issues and for agreement across the organization on the best solution for the organization. We’re anticipating a significant increase in the use of Office 365 and cloud solutions in general. In this regard, we’re preparing for the coming wave to ensure that decision-making is well informed and appropriate.
About the Author
Randy Peckham serves as President and Chief Technology Architect of Ottawa-based IDS Systems.
Founded in 1995, IDS provides IT strategy and installation services to businesses and government across Ontario and other parts of Canada, with a focus on the development of cloud solutions based on products such as Office 365.