Why companies consider hosting their servers and software applications in the cloud.

Often an event or circumstance causes a company to consider hosting a server or their software in the cloud. They may be faced with an aging server, outdated software, security breach, backup failure, need for multi-location access or a start-up operation.

The decision to move to the cloud or house your servers internally, has to be made based on the unique needs and priorities of your company. Just because it’s a good decision for one company, doesn’t mean it makes sense for another.

Deployment in the cloud comes in a number of forms.

  • SaaS (Software as a Service) typically means you are renting software access over the web. The provider is usually responsible for performing upgrades, but often there are still tasks that need to be managed by the client.
  • Hosting complete servers from providers like Microsoft Azure, Amazon Web Services or Rackspace provides a full virtual server that is accessed remotely.   Although some of the management of the server is taken care of by the provider, you still need in-house or outsourced IT expertise to help with provisioning the server, maintaining the operating system, installing software and upgrading software.
  • Hosting applications with an experienced vendor. Working with a vendor who is also an expert in managing your applications (Sage 100, Sage BusinessWorks, etc.) can have advantages when it comes time to install, upgrade or troubleshoot issues.

Hosting Factors to Consider:

Cost

There are many vendors claiming that it is less expensive for a business to move to the cloud. That can be the case, but not always. It’s similar to car dealerships making the statement that leasing is always less expense than owning a car.   In order to really know, you have to run the numbers and consider the advantages and disadvantage of each option. Just like a car lease, the length of time you plan to keep your equipment is a big factor in determining which is the better value.

Number of users is often a main factor in price as it also tends to dictate resource requirements. There tends to be a sweet spot in range of users were hosting offers the best value. Once you grow to a certain size, then often you’ll find making the investment for in-house equipment is more affordable in the long run.

Folks within this industry believe moving everything to the cloud should be cheaper, due to economies of scale achieved by large cloud providers. In theory that makes sense and that is the direction we are heading, but that is not currently the case in most circumstances.   When pricing servers in the cloud, businesses are often surprised at the cost.

Companies often find that even after moving a large portion of their applications and servers to the cloud, they still need a file server in-house as not everything is transferred to the cloud. Because of this, you may still face costs associated with management and security of an internal server.

If cost isn’t always an advantage of moving to the cloud, what are the major advantages?

Peace of Mind

For many business owners, IT is complex with many risks and the thought of transferring that complexity to someone else is really appealing. Most cloud providers have very high levels of expertise and staff to manage things on their end. From security, redundancy, maintenance and backups, they usually have the expertise to put excellent systems in place which can provide peace of mind. With that said, not all cloud providers are equal and you need to perform due diligence when looking at your options.

Peace of mind can mean different things to different business owners. Some find comfort, knowing all their critical data is at their facility and managed locally by internal or outsourced IT.

Ease of Expansion

One big advantage of the cloud is how quickly you can provision a new server, expand capacity of an existing server and add users. If you have a major expansion within your business and need to quickly increase the capacity within your IT system, it can often be addressed within a few hours with cloud services. If your servers are in-house, this may be costly and take a number of weeks or months to put in place.

Multi-Location and Remote Access

Remote access and multi-location access are innate strengths of cloud offerings. If you’re starting a business today with a work force spread out over multiple locations, the cloud offers huge advantages.   While this can be achieved in-house using technology such as Remote Desktop Services (RDP), it is an investment and requires in-house or out-sourced IT to setup and maintain.

Integration between Programs

If you are in a mixed environment where some of your applications are in the cloud and some are on premise, integration between applications can be a challenge. The same is true if you host multiple applications in the cloud with different service providers. You’ll find it easier to integrate applications if everything is hosted on the same cloud server or if all applications are integrated in-house.

Speed

If you’re using old servers and infrastructure on premise, then you’re likely to see improved performance moving to the cloud. But this still depends on the provider, the specs of the server you are hosting and the speed of your Internet provider.

Connectivity

Once you start moving servers or key applications to the cloud, the importance of fast reliable and redundant internet connectivity is critical.   Hosting providers typically have very high reliability on their end with uptimes normally exceeding 99% availability.  But that high degree of reliability doesn’t mean much unless you can count on your local internet service provider.

The acceptance of cloud is certainly accelerating with the potential benefits. For most companies, a comprehensive analysis should be performed to determine the best course of action based on their individual circumstances and priorities.