Cloud Computing: Life Giving Rain or a Fog Over Your Business

Erin-Todd Hansen is conducting a 3-part training series to help you and your business understand working with cloud technology vendors. In this guest blog post, he gives you a sneak peak into the important of budgeting, negotiating and managing your vendor relationships. All sessions of this series are open and can be taken individually. 

During the dot-com bubble of the late 1990’s, there were so many fly-by-night web startups it was like cars speeding down the freeway hoping they would hit a business plan; it was dangerous and tenuous for anyone investing or doing business with them. However, if you found a winner, it could yield great profits.  After a period of exuberant growth, we began to understand what web businesses could offer and learned the ins and outs of doing business with them. 

In my roles leading technology procurement and now business enablement for Healthwise, I see cloud computing entering a phase of exciting growth. Many businesses are now jumping into the market to offer services or solutions that traditionally could only be managed with on-prem software or with someone you met face-to-face. The challenge we have now is that cloud computing for the small to mid-sized business is a bit like the wild west. It’s new and the rules are unwritten. Anyone can stand up a business and yet the potential for reduced costs, efficiency and collaboration is huge. 

Let’s frame this topic with two assumptions based on data:

First, cloud computing is growing fast and will become more pervasive:

Worldwide cloud computing is growing by more than 20% annually ($160B in 2016). 

- The Synergy Research Group

Technology tends to first cater to large businesses and then, as markets saturate, technology vendors shift to focus down market on the needs of mid-to-small sized businesses. 

Second, most businesses, especially small to medium sized ones, aren’t always adept at acquiring the best technology vendors. If you don’t have specialists in technology procurement, the odds are you are at higher risk for partnering with someone who may end up causing you to lose time, money or affect your relationship with customers. Here’s what two experts in the field say,

  • 42% of technology procurement are ad-hoc decisions

  • 48% of managers just acquire tech themselves because it is faster

  • 49% of organizations say they struggle to control and contain costs

  • Cloud adoption models and subscription-based purchasing agreements are complex and vary

  • Sourcing, licensing and technology management is often siloed

- Softchoice

  • 32% of IT departments are poorly equipped to handle the growing workloads in the cloud, compared to 27% in 2015

  • The biggest challenge for the cloud market today is a lack of resources and expertise

- RightScale

Don’t get me wrong, the benefits of cloud computing have been widely touted. For the average Boise Chamber of Commerce business, there are four key advantages to consider:

  1. Reduction of Costs

  • Significant savings come from the ability of Cloud-hosted servers to scale computing power

  • Minimize IT requirements and physical storage thereby saving money

  1. Improve Efficiency

  • Users can access their files anytime, anywhere, using any device

  • Software upgrades, space considerations and power requirements are all taken care of

  1. Ease of Collaboration

  • Shared access to one master document or tool means a team can create, edit, get alerts on changes, get to the finished product faster 

  1. Reduces Risk

  • A typical business that 1) has information on a server with 2) access to the web is not going to match Microsoft or Amazon for their security infrastructures.  The appeal of established cloud vendors is that they decrease the potential for hackers, viruses, and other cyber-security issues, plus they manage the backup data off-site.

But not every cloud vendor is “established” and there are consequences if you don’t do this right. Mistakes can be costly. 

Critical cloud vendors might control access to your servers, critical data, your security or phone systems, your online portal, accounting, business reports, email, spreadsheets and documents, market research, expense reports, and more. Consider what it would mean for your business if just one of those went down. Yet the industry is so new with so many entrants you simply can’t judge a business by its website. 

For example, just because everything is in English doesn’t mean the people behind the website are based here. India, China, Israel, and Europe all have burgeoning tech industries that want to cater to North America, but they don’t have the same laws that we do. 

How do you assess if a cloud business is a concern or might have security holes for those critical systems? If you run into a problem today with one of your cloud vendors, do you have a way to call every single one of them? It’s not uncommon for them to only provide email contact information. When a serious problem occurs, is email an acceptable way to reach them? And if you’re okay with using their online help system to troubleshoot a problem, have you been to their site to determine how friendly or not it is? Some are great and some are horrible. You might be surprised which are horrible.

In a 3-part Boise Chamber of Commerce training series, we will dive into the risks and practical things you can do to optimize working with cloud technology vendors. It’s not rocket science, but as the data above shows, a lot of businesses are spending more time and money than necessary. We will cover things like building a technology roadmap to guide your purchasing decisions, maintaining critical vendor scorecard to help with renewal discussions or terminations, and more. In addition, we’ll share a vetted list of cloud vendors suited for the small to medium sized business. 

Register for the series: