Wired City

Wired City

Why Businesses Have Their Head in the Clouds

A recently released global survey of CIOs by Gartner Inc. estimated that nearly 40 percent of enterprise organizations expect to stop providing devices to their employees by 2016—it’s part of the BYOD (Bring Your Own Device) movement, and “the cloud” is the front-runner in that movement.

il_fullxfull.263914926The cloud boasts three major benefits: it’s often more economical, reliable and accessible than any hardware or software money can buy. It’s also been around for longer than we realize—if you use Gmail or Yahoo Mail, you’re using the cloud. Facebook or YouTube, the cloud. Dropbox—well, you get the picture.

“The cloud can be much more economical, especially for smaller businesses and startups. The monthly or yearly subscription fees for cloud services can be significantly less expensive and less of a management/maintenance hassle,” said James A. Martin, an SEO copywriter and technology journalist of 20 years, “You don’t have to purchase software licenses or dedicated hardware like email servers, and you don’t need people either on call or on staff to manage all that for you.”

If you take a look at your accounting department, chances are you’re paying for servers, backup servers, licensing fees and people who maintain it all. Often, businesses find themselves paying manufacturers to fix any glitches, but with the cloud, you only pay for the right to use the software. Some businesses prefer to find a cloud-computing vendor instead of researching, purchasing, installing and maintaining their own equipment. It can also lower a business’s actual computing costs, compared with traditional hardware/software; this is especially true for small businesses and startups.

Hans Peter Bech, CEO and founder of International TBK Consult, thinks it’s advantageous because the data is available instantly all over the world, and when his company opens up a new office, it’s up and running in a day.

“We are a fast-growing company and prefer to invest in our front-office activities rather than the back-office IT infrastructure,” said Mr. Bech. “We pay as we go. No up-front investments are required.”

However, Jeff Pagano, CEO and founder of Iconic Consulting and client services manager at Power Consulting Group, says that while the cloud’s competitive low rates are attractive and are becoming increasingly so in lower and lower monthly payments, the fact that you don’t actually own anything turns some people off.

“It’s like leasing a car versus buying a car,” he said. “There’s no return on the investment; you will pay forever. There is no last payment. We refer to this as moving IT from capital expense to operational expense. That works for many businesses, but I know owners who are looking at the OpEx column grow and grow and grow, and they’re getting a little sick of it.”