Isn’t it strange that most businesses in the UK still treat Information Technology as a capital investment?
A capital investment for an asset that really has no balance sheet value, falls out of date or becomes progressively less useful to us in such a short space of time (as technology moves on and leaves us behind).
So why do builder’s merchants in the UK routinely replace their infrastructure and business software?
Rarely is it because they “got it wrong” but typically because as time progresses the system they bought (hardware and software) become less fit for purpose for one of the following reasons:
- The system is not scalable
- The operating systems/hardware becomes slow and unsupportable
- The business software no longer fits their business requirements
So therefore hundreds of merchants will spend inordinate sums of money safe in the knowledge that they will have to do it all again in 5 or 10 years’ time. This rate of change is typically more rapid in the recently established merchant as they (tend to) grow and evolve at an exponential rate and therefore suffer the inconvenience of upgrade or replacement on a regular basis.
However, when our “junior merchant” grows up they will swap regularity or upgrade for more complex and more expensive upgrades accompanied by the internal cost of an IT Manager or two.
So, given the choice, if you could step off this hamster wheel and replace all that inconvenience, business disruption and cost for a firm monthly cost for each user, which covers all their IT requirements, would you do it? To put it in perspective, this is what you do with your telephones and your mobile telephones, so why not with your other critical business systems?
The term “Cloud” (the catchy new name for hosting and Software as a Service) has only been missed by those with their heads, ironically, in the clouds. The growth of this sector is immense and we are routinely asked about our cloud hosting capabilities.
So what has spurred this recent, rapid interest?
Well, it’s not technology, as hosting is certainly not new, so it is all down to cost and competition driving down the running costs of hosting centres and communications. The realisation soon hits the end-user that buying systems and software outright is no longer the cheap option and hiring excessive internal IT resources is just another admin expense.
However, there are other issues addressed here and the top amongst them is security and business continuity.
You could spend substantial additional money in investing in servers and infrastructure designed to give you a very high level of redundancy, failover and disaster recovery (all devaluing over time and requiring maintenance and upgrade) or just choose a hosting centre that does this as standard (and far more).
You could probably set up your on-premise server in its own server room with air conditioning and a locked door. Ours is in a nuclear bunker with state of the art backup power, super-fast internet links and fire precaution systems – I could go on but the reality is that the average merchant will not make the investment in infrastructure that a cloud hosting centre will, and has to.
The flexibility it provides is attractive for the merchant as well. In a fully hosted environment we can switch on additional users (trading software, email and office products) very rapidly and equally we can switch them off. This means that the system can flex as your business does and you will never be lumbered with excessive software licences and support costs. It is just far easier than the traditional approach of having to buy additional hardware, licences and most importantly your installation costs are significantly less.
In conclusion, as you approach the replacement or upgrade of your current infrastructure or business software look once more at a fully hosted Cloud set up and do the sums. When you do, add in the cost of inconvenience, business downtime and potential labour costs if you decide to step on the hamster wheel again and see if you draw the same conclusions as we do.
For the reasons listed above, Software as a Service (SaaS) and Infrastructure as a Service (IaaS) is a cost-effective, flexible and reliable solution for your business. Next time you find yourself looking at your software options, make sure you consider all possible routes for your business.
