Cloud cloud cloud, our customers must get sick of hearing us bang on about it! But we keep talking about it because the cloud gives fantastic options to most businesses to do more than ever, for less cost.
But, not all clouds are the same.
Regular readers will know that we favour Microsoft Office 365 cloud for business tools like email, documents and collaboration. That’s because not only is it reliable, secure and inexpensive, its also always up-to-date and can do much more than non-cloud services. Our [wow_colorme]Kambium[/wow_colorme] colleagues love helping businesses explore the latest abilities of Office 365.
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So Office is the easy bit, but what about your business software? What sort of cloud should you use there? Amazon, Azure or a local provider?
This isn’t so easy! Let’s look at what’s involved.
A local server (say an old-fashioned one in your server room in your office) typically doesn’t work terribly hard. Normally the only upgrade it will need over its life is disk space, because typically they don’t use much RAM or CPU. So there is a lot of wasted capacity. Over recent years, using ‘virtualisation’, we’ve squeezed more out of servers, giving them more work to do to consume that extra capacity, generally with great results.
So a lot of businesses have been using their server capacity. But for those that don’t, it makes a lot of sense to share it with others, and that’s essentially what the cloud does. Using the internet, servers get shared across businesses using specific software to keep the data and systems separate amongst the businesses sharing them (known as tenants – the analogy is obvious).
Now, let’s think about forming a cloud business to do that at scale. You buy some servers, divide them amongst some customers and endeavour to maximise your return. That means using all the capacity, and it means operating as efficiently as you can. Clearly, doing that on scale will be less expensive than doing it on a low volume. Pretty soon,’utility pricing’ applies – you can charge just enough to recover the marginal cost of the next unit, and at this point, prices are falling.
Sharing a cloud on scale means you are providing extensive security, because clients demand it. It means maximising up-time, so equipment is kept up-to-date and there are fail-over systems in place. It means there are backup power units, backup internet connections, and other extensive protections. But because it’s being done on scale, the price is extremely competitive. In the case of Microsoft Azure and Amazon AWS, their technology teams are also innovating day in and day out, creating new services, new ideas to share.
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So now we step into interesting territory. There are a wide variety of local providers, ranging in scale and offering.
There’s cheap and cheerful, operating without the scale. They compete by cutting costs wherever they can. Security is minimal, backup systems are reduced, with less failover options for power and internet. The machines are older, sometimes much older than you would expect but they hope they have enough spare capacity to see them through in the event of a problem. They sweat the assets! If you don’t need total reliability, then these are good options. They work well until there is a problem, and that’s when the real costs begin. Just be aware they still have roughly the same software costs as other providers, so if the software licensing seems cheap, there could be a problem.
Finally, there are some fantastic premium local hosters, doing a great job with excellent security and failover. Their point of difference isn’t price, its location and flexibility. We use these when we need a local solution, or to put specialised equipment or connections alongside the cloud service – the flexibility is excellent. Generally you can tell these operators because the price is a little higher, and they are generally affiliated with either Microsoft or Amazon.
Rather than running our own cloud, Kinetics has chosen to remain independent, and work with others. We support hundreds of cloud solutions on Microsoft 365, Azure, Amazon AWS and quality local providers. Our task is simply helping to find the right solution for you and making it work, for you.