In the last blog, we defined the cloud and talked about what it was and wasn’t, various types of the cloud and so on. In this blog, let’s build on that and talk about the kinds of metrics and considerations you should make when considering whether or not to go into the cloud.

If this all seems like a lot but you also want to figure this out, please CONTACT US and we’ll be happy to meet with you, chat over what you want to do in your business and help you figure out the optimal blend for your business. There are definitely a lot of factors but we are experienced in walking our clients through this process and are happy to work with you as well.

I believe public cloud offerings provide some great opportunities but I also believe that most of them are not as mature as many businesses need. I have found that a business can usually tolerate a lot of things but data loss or corruption tends to be a sacred cow, causing the most substantial and potentially terminal damage possible. I believe that public cloud offerings induce a substantial amount of risk into your business that, often, you cannot mitigate in the same kinds of ways you can when you own your data. When you can mitigate the data issues, it usually increases the cost such that on-premise is actually cheaper. I believe there are some use cases where public cloud offerings make sense but, in most cases, I tend to find that on-premise solutions meet the balance of business needs better.

First, let’s start with some base considerations when looking at cloud vs on-premise solutions. (I know there are a lot but I want to make sure this isn’t just skimming over the issue.):

Cloud

• Updates – Often, cloud environments can update more rapidly and stay current. This can be great because you get the latest features but it can also be a problem because, often, you end up being the beta tester to try out new features that may or may not work and you, usually, don’t have the option to stay on an older version.
• Costs – Costs tend to be ongoing. This can be nice in that you don’t tend to have as much up-front cost but it can also be a problem in that you, often, can’t just back down your service and reduce or eliminate your costs without fully terminating service.
• Internet – Your Internet usage will increase. As such, you will, often, need to get a faster Internet connection, a redundant Internet connection and, possibly, a higher-end firewall to accommodate all of this.
• Security – With more of your traffic going over the Internet, security is an even greater concern. You need to budget for some increased costs around security and you will want a professional to evaluate and engineer solid security solutions to make sure that your communication to the cloud is as secure as possible.
• Risk – You are trusting someone else, to varying degrees, to house and protect your data. Carefully read the contracts and be sure you know what they are and are not saying before you sign anything.
• Data Ownership – Most cloud providers will declare that you own your data but there is a very sticky point that comes up when you actually want a copy of your data. Some things, like DropBox, are easy as you just download your files while other systems, like Salesforce, are much more complex. Know that, if you use a cloud system, getting usable data from them to migrate to a different solution may be difficult to impossible.
• Control – Data that is in the cloud largely relies on the cloud provider to secure it, back it up and manage it. Other than your contract, you have little to no say over how they handle your data and you usually have no way to verify that they are actually doing, on the back-end, what they said they would do.

On-Premise

• Updates – While cloud offerings tend to have ongoing costs, with on-premise solutions, you can, often, delay upgrades. Sometimes, this is not advisable but, other times, when business is slow, you are really busy or you are a bit cash strapped, you can delay upgrades and control when you incur certain expenses.
• Costs – On-Premise solutions typically have more significant up-front costs. While these can be leased, you will need to be involved in the up-front and ongoing decisions about when to upgrade, how much to upgrade and so on. A qualified professional should be able to guide you through this process and help connect the decisions to business metrics that are meaningful to you.
• Internet – If you have a lot of remote users, your Internet usage will increase. If most of your users are local to your solution, an on-premise solution will have little to no impact on your Internet service.
• Security – Especially if you have remote users connecting into your system, you will need to ensure that you have a secure path for them to connect in through that does not unnecessarily expose your system to outside risks.
• Risk – Whether you are doing all of the work yourself or contracting someone like JNR Networks, you are more involved in the risk decisions.
• Data Ownership – Because the solution is on your equipment, data ownership is never really a major concern. If you want to migrate from one solution to another, having your data on-premise provides the optimal opportunity to access and migrate that data.
• Control – Whether you use a professional to design and support your systems or you do it yourself, you will be in control of all decisions about how much or how little to do with your system. A qualified professional will walk you through those decisions but you will be able to make decisions about various risks, being educated of the costs and rewards of each decision.

Second, let’s talk about some more specific examples and how we apply the above considerations to them.

We have found that, when looking at cloud options, it helps to look at different kinds of data that we may or may not have. We group those into three categories:

• Static Data (ie. Websites)
• Dynamic Data (ie. Files, Line of Business such as QuickBooks or CRM, E-Mail)
• Real-Time Streams (ie. VoIP, Video Conferencing)

The reason we categorize our data is because there are varying business needs, risks and tolerances that come with varying types of data. Let’s look at a few examples:

• Website – Usually, this is focused on external users that are accessing and consuming content on your website. (This blurs a little bit into Dynamic Data if you have an online store on your website.) Websites typically need to be optimized for external users, don’t need precise security controls like you might with files or accounting software, are relatively static in their nature and don’t usually house highly sensitive data. Typically, having to revert to a copy of your website that is a month old would be inconvenient but would not cause serious business issues. Similarly, if your website became unavailable, it would be inconvenient but would not inherently shut your business down. Even if you completely lost your entire website, you could rebuild it without it being catastrophic to your business.
• QuickBooks – We would consider this Dynamic data. Usually, QuickBooks (or any other accounting package) is going to be used by 1 or a few internal people with the potential that a remote accountant or CPA might need access as well. Most accounting packages, QuickBooks included, do not work well across lower speed connections such as an Internet connection. Additionally, the data is usually considered highly sensitive and the data is constantly changing and being updated. Typically, losing a week of work in your accounting package would represent a significant cost and interruption to your business. Having your accounting system unavailable poses a real risk of stopping your ability to take and process orders, pay vendors and collect payments from clients. A complete loss of your accounting data might not shut your business down but the cost would be significant.
• VoIP Phone System – Most modern phone systems, whether hosted in the cloud or on-premise utilize VoIP technology. These systems tend to need moderate-speed connections but those connections need to be high quality, with minimal to no interruptions. Most phone systems do need to store voice mail and, possibly, some call recordings with varying levels of sensitivity depending upon what your business is doing. Typically, losing historical voice mails or recordings would be inconvenient but would not represent a significant loss. Having your VoIP system unavailable or the service degraded for a prolonged period of time will have varying effects on your business based on how reliant you are on your phones. Depending on various causes, completely losing your VoIP system could cause you to be down for anywhere from a few days to a few months, including the possibility of having to get new phone numbers for your business.

In general, as you move from private cloud to hybrid cloud to public cloud, you lose control over the deeper elements of your systems and have less ability to do things such as guaranteeing performance, verifying your backups, and building redundancy that meets your business needs. This is not always bad but it is a reality that, as you hand off the responsibility to run the systems that support your business, you tend to lose more control over various decisions about how those systems are managed and secured.

With the website example above, in most cases, it makes sense to host your website with a public cloud provider such as GoDaddy. While not always the case, with GoDaddy, the cost to host your website is substantially lower than the cost to host it on-premise, both up-front and long-term. When you couple this low cost with the low business risk if your website was lost, usually, hosting your website with a public cloud provider makes sense. An alternative is to use a hosting provider, like us, to host your website where we employ some more security and redundancy protocols than a budget hosting provider does. This gives you a little more control and security while not drastically increasing cost or risk to your network by hosting a website inside of your own office. One thing of note, however, is that none of the “unlimited” options out there are truly unlimited. At some point, you will be cut off or throttled. Also know, with something such as a website, the low-end packages are packed onto servers with a lot of additional “unlimited” websites so you are subject to performance ups and downs as other websites spike and drop in their usage. The higher-end packages (this is true with most public cloud offerings) tend to give you more features but also tend to give you better performance.

With the QuickBooks example, we would need to consider a number of factors to figure out the right solution for you. There are solutions out there where you can host your QuickBooks software on someone else’s environment but there are some risks there. Some of those environments do not allow you to make your own backups of your data (you have to trust them to host and backup your data) and some environments end up putting you in a higher-end version of the software than you want. With QuickBooks, for example, when you go to a hosted platform, you are usually on their Enterprise version. If you ever want to bring your QuickBooks data back on-premise, there is no clean way to downgrade your data to a lower end version of QuickBooks so you end up having to run the Enterprise version on-premise. Another consideration is performance as QuickBooks does not run well across low speed connections so you have to remote into a server or desktop that someone else is hosting and run QuickBooks there. The result of this is that the performance is slow and you end up doing a lot of clicking and waiting.

With the VoIP phone system, in many ways, using a public cloud solution would be a great idea as it minimizes up-front cost and you, often, get a lot of new and innovative features. The issue, however, is that VoIP phone systems are very sensitive to blips in your Internet connection and, because the Internet runs over a public network, there is no way to guarantee quality calls. (Even though some of the hosted VoIP providers promise it…if you read the contract, they really say it’s a best effort attempt.) If you want the whiz-bang features and don’t care if some of your calls are just really choppy and you occasionally get disconnected, a hosted VoIP solution might be a great idea. However, if you want solid call quality and are willing to compromise a little bit on some of the latest and greatest features, an on-premise phone system typically tends to be favored.

I hope that this has given you some framework for evaluating cloud solutions, that we have cut through some of the hype and that you better understand a lot of the pros and cons at play. If you would like to connect with us to talk further about your business needs, please click HERE and we will be happy to meet with you.