Category: Internet

The networked business Part 2: The benefits of cloud computing

Part 2 of the Let’s Talk Business Cloud Presentation

This is the second part of the presentation given as part of the City of Sydney’s Let’s Talk Business series of presentations on new business technologies.

Scalability

This scalability, or flexibility, of cloud computing changes the way we buy and use technology. No longer are we locked into major technology investments as leasing services off larger companies means we don’t have the capital costs of investing in computers, servers and all the associated software purchases and support charges.

An architect or designer a few years ago might spend $10,000 per employee every three years kitting them out with the latest workstation capable of running AutoCAD or another high end design program.

While some businesses still need that sort of investment, most can now get away with just a computer running a web browser and the boss can pay the monthly bills on her credit card rather than having to take out a loan against the family home.

The 19th Century Prussian general, Helmuth von Moltke said “no battle plan survives first contact with the enemy” and similarly no business plan survives its first contact with the marketplace. The flexibility of cloud computing means we aren’t locked into expensive technology choices as our business evolves to meet the changing demands of our customers and industries.

Teamwork

Collaboration is another of the big buzz words of today’s economy. The truth is all successful businesses are a collaborative effort and have been since the days of cavemen hunting mammoths.

One of the biggest irritants with PC based systems is how they are designed for one user at a time and how many force you to pay for an unreliable multi user versions.

Think about Microsoft Word, if you’re accessing it on the network you’ll find only one user at a time can read or edit it. This was true of the older desktop accounting packages.

The older, desktop based accounting packages only allow one user. Their multiple user, network packages are expensive and clunky. The cloud based systems like Xero or Saasu, an online service based out of Elizabeth Street here in Sydney come with the teamwork functions built in.

Recently at a workshop in Melbourne, a director of a large services company told me how his board of directors are using Google Docs to work together on agendas and committee documents. Using cloud services are saving him and his colleagues many hours of work and avoiding having big piles of documents dumped on them the weekend before their board meetings.

The team aren’t just your employees, it can also be your customers, suppliers and other business partners. Cloud services allow you to share selected information without compromising your own systems.

Mobile working

By definition your customers and suppliers aren’t in your office. Increasingly your staff and even the boss aren’t there either.

Working on the move has been one of the great weakness of both PC computing and the mainframe era. Cloud computing, made possible by accessible and affordable Internet, means we can now easily access data and applications while we’re on the road.

Remote working has been possible in the past, but it was awkward and difficult. To set up secure connections usually involved setting up a complex and flaky Virtual Private Network that tended to choke at the times you needed it.

In my own IT support business we saw this a number of times where we struggled to set up reliable remote networking connections. For instance the owner of a business in Pyrmont decided to move his home to Orange and telecommute into the office. At the same time his assistant had a baby and wanted to work from home.

The juggling of hardware and server requirements so the client had a secure and reliable service was difficult and expensive. Today the use of online accounting and office packages along with cloud based document sharing services like Dropbox, that business could be paying $100 a month without any upfront capital costs.

Dismantling edifices

Those capital costs are real, a five person Sydney law firm I know ended up spending thirty thousand dollars when their software provider told them they had to upgrade their systems.

Much of a big or small businesses IT budget goes into building impressive technological edifices that add little to the profitability of the business.

Worse, IT is a time consuming beast – in a big business hundreds of people are employed to keep their computers running. In a small business, the proprietor or manager spends a disproportionate amount of time messing with technology.

Cloud services take a lot of that load off businesses.

We should keep in mind though that this is as big a benefit for big businesses as well as small. Last year the Commonwealth Bank of Australia announced they were moving services to the cloud.

The big end of town has woken up to the benefits of cloud computing, while they have a problem in dismantling their massive structures once they do they will be stronger more nimbler competitors as their cloud platforms make it easier for them to respond to market changes.

Barriers are falling

As large businesses are learning, removing big capital costs reduces barriers to testing new ideas. It means getting a new business up and running is cheaper and quicker than ever before.

On the back of Sydney Buses at the moment you’ll see ads for Freelancer.com, stating you can get an iPhone app or website developed from $30. While the reality is you’ll pay quite a bit more than that, the point is well made – with a web browser and a credit card you can outsource large parts of your business.

Most of these outsourcing businesses are run on cloud services. Many of the social media successes like Facebook and Twitter grew by hiring space off cloud computing services such as Amazon.

For established businesses, the cloud is changing the very fundamentals of their operations. One of the biggest growing areas in the outsourcing industry is the legal profession where law firms are giving lower level work to companies in India that can carry out the tasks of junior lawyers or paralegals. The cloud technologies these services use allow the law firms to supervise and bill for the workers as if they were in the same building.

Because you can be up and running in minutes using cloud computing services without the need of installing software on your computer, let alone the time involved in managing and downloading updates, it’s a quick and effective way to grow your business.

This is the second of a series of four posts taken from The Networked Business presentation. Parts One, Three and Four are also online.

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The networked business Part 1: What is cloud computing?

Part 1 of the Let’s Talk Business Cloud Presentation

This is the first part of the presentation given as part of the City of Sydney’s Let’s Talk Business series of events on new business technologies.

The IT industry loves buzzwords and one of the biggest buzzwords at the moment is Cloud Computing.

Another thing the IT industry loves is overselling concepts, think of Y2K or the Dot Com Boom, so in this presentation we’ll look at what cloud computing is, whether it’s being overhyped and what it can realistically do for today’s businesses.

In 2003 Nicholas Carr wrote in the Harvard Business Review that Information Technology no longer matters. In Nick’s view, computers, the Internet and IT are all becoming a utility and we’ll take computers and the Internet for granted just as we in the Western world consider clean running water and electricity today.

That point of view is probably true and the always on nature of the Internet and cloud computing is bringing us closer to the day we’ll assume IT is always there.

In the always on, always connected society each of the nodes we see on this screen could be a customer, a supplier, an employee or even the tax man and this changes the way we do business.

But every innovation has its risks and every revolution its victims. So we’ll look at the risks as well as the opportunities in an economy where cloud computing is changing the fundamentals of our businesses.

What is the cloud?

Before we go on, let’s explain what the cloud is. The analogy of a cloud is quite appropriate, just as a rain cloud is made up of many individual water particles, the Internet is made up of millions of computers talking to each other.

In fact there are so many computers on the Internet that the Internet Protocol version 4 developed in 1980 allowed around 4 billion address and we’ve just run out of those.

The Internet Protocol 6 now being introduced allows 34 undecillion addresses. An undecillion is a trillion, trillion, trillion so 34 undecillion addresses is a big number, although in 1980 4 billion seemed to be a lot and it was unthinkable we’d use them all up in 30 years.

The Internet though was designed to survive the unthinkable. Surviving a nuclear war was the reason for the Internet’s design. The fundamental idea behind the net is redundancy, should one group of computers fail the network adapts and sends the information around the damaged area.

The same principle applies to cloud computing, the tens of thousands of computers in each data centre – the buildings that house the cloud computing companies – are duplicated many times so if one or a hundred fail then others will pick up the work and the person using the service should never notice there has been a problem.

Naturally the data centres themselves are duplicated so the failure of one centre won’t interrupt the service. When you open a document in Google Docs, the data and the program are being run on computers in Oregon, Belgium possibly even here in Sydney.

Interestingly, the computers in these data centres are cheap and basic with most of them having less power than our home or office desktop computers.

The real power lies in combining the capabilities of these modest systems, as a group they are far more powerful than most supercomputers.

For our purposes we can define cloud computing as using someone else’s computers to do the work rather than our own systems.

Cloud computing is nothing new

The idea of cloud computing isn’t new, it goes back to the earliest days of computers.

Until the arrival of the personal computer, academics and businesses had to use mainframe computers where time was allocated to them by the computing department. These were only really feasible for well resourced organisations.

The Personal computer took the data off the servers and onto the desktop. It’s notable that IT departments back then resisted introducing personal computers for almost identical reasons that they are resisting cloud and web based services along with social media tools today.

PCs and later laptops and smartphones had advantages that the old mainframes could never offer and while the old ways of centralised computing didn’t go away, most people and businesses preferred the advantages of the smaller, more flexibile systems.

With the arrival of the Internet, it was possible to link computers in the same way again and take advantage of the economies of scale of what we call client-server systems while retaining the benefits of personal and mobile computing.

This is the first of a series of four posts taken from The Networked Business presentation. Parts two, three and four are also online.

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Should you upgrade to Internet Explorer 9

Every big software update has its traps

Big fat computer updates always worry IT people as the changes can break important business software and leave a lot of irritated staff complaining they can’t do their job because “the computers won’t work.”

Microsoft’s latest version of Internet Explorer – released two weeks ago – has to be treated with a bit of care as IE is a fundamental part of Windows, something which made the spyware outbreaks last decade so problematic, so any change to the inbuilt web browser can ripple through your entire office network.

Internet Explorer 9 itself is a decent improvement over earlier versions with improved loading speeds, a download manager and integrated search, all features which had been lacking against the competing Firefox and Chrome browsers.

Most importantly, IE 9 has a range of security features that makes it a lot safer to use than previous versions. However those safety features are where the problems can lie as legitimate programs may be blocked along with the bad guys.

The immediate problem with IE9 is that many organizations that are still in the dark ages of Internet Explorer 6, having locked themselves into bad technological choices at the beginning of the millennium, and so will struggle with the new versions. If you deal with the websites of these organisations, who are often government departments and financial companies, then you can expect some hiccups in their online communications.

Inside your office, you may find some of your older software doesn’t play nicely with IE9, this is probably the major reason why many businesses have hung back from updating to Windows 7 from Window XP. If you are still using XP then Internet Explorer 9 won’t be an issue for you as it only runs on Windows 7 or Vista.

Microsoft’s not making IE 9 available for Windows XP is probably the strongest sign yet that the software giant is going to make a concerted effort to move users off what is now a decade old operating system.

For businesses, if your systems support it then IE 9 is a good and important update, however it’s best to use an alternative like Firefox, Chrome, Opera or Safari for day to day browsing and reserve the Microsoft tools for the sites that insist upon it.

As with all major upgrades you have to test your systems before rolling out the new program across your network. Install the revised software on one or two key staff members’ computers and get them to test the new programs in a working environment to check that key operations aren’t affected or, if they are, how you can fix or work around them.

Overall, Internet Explorer 9 is a worthwhile update and an important part of Microsoft’s trying to stay relevant in a world where computing revolves around the Internet rather than the desktop.

Whether Microsoft can manage to stay relevant is a topic for another day, but at least IE9 keeps them in the game.

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Running your own coupon campaign

Do-it-yourself coupons may be the better tool for your business

The group buying goldrush continues as now even Facebook are considering starting up their own service, but do businesses need to be using these platforms at all?

Behind the group buying mania is the idea retailers can use these services’ large mailing lists to promote their business while clearing excess stock to bargain conscious shoppers.

Those reasons are valid, but for the privilege of accessing their databases the group selling services charge substantial merchant commissions, representing a 20 to 50% cut from the seller’s income. If the discount is really deep, say 80%, then the site often takes the remainder of the sale leaving the retailer giving the product away.

For access to a mailing list, that’s a pretty big outlay to the merchant who may be operating on thin margins to start with. The cost can even be greater given most of the group buying subscribers are shopping on price and converting them into loyal customers can be a struggle.

It is possible to run your own coupon campaign. Both Google Places and News Limited’s True Local have features in their free local services where you can set up coupon campaigns and publicise offers.

The advantage with these is you capture shoppers in your neighbourhood, the coupon lasts longer than one mail shot and doesn’t require a fat discount to grab the attention of shoppers already jaded by 60% off waxing services and half price exercise classes.

Running your own coupon campaign puts you in control, saves the often fat commissions and when done cleverly can break you out of the damaging deep discounting mentality the group buying sites promote.

You can also put links to these offers on your website, Facebook page and other social media channels, further building those channels and giving you more opportunities to convert one off buyers into loyal customers.

There’s also the advantage that the search engines, particularly Google, love these offers – it’s part of their US roots where clipping coupons is a fundamental part of retail marketing.

You don’t even need to come up with a new offer. If you currently run ‘cheap Tuesdays’, happy hour or other promotions, you can build a coupon campaign around them.

All of this is another reason why you should be taking the local search tools seriously even if you do already have a website.

Group buying sites do have benefits for a retailer such as exposure to a wider, new audience and it’s worth considering them in the right circumstances. Trying a do it yourself local coupon campaign may turn out to be the better option for most businesses.

Paul will be holding a masterclass that looks at local search, adding coupons and how to get a small business fully online in two hours on March 24 at Mosman, NSW. Spaces are still available.

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Group buying sites explained

Are big Internet discounts right for you or your business?

Fancy half price seafood dinners, deeply discounted electrical goods or 80% off personal fitness training? Thousands of people who’ve signed up for group buying websites certainly do and hundreds of businesses are prepared to make big discounts to attract those customers.

What are these services? Are they worthwhile and how do the businesses make money from them? Should customers be wary of advertised big savings and are merchants cutting their throats when they enter the world of deep discounting?

What are group buying websites?

The idea behind group buying sites is that merchants will offer cheap deals to take advantage of bulk sales, clear inventory or as loss leaders to attract new business. The products offered can be anything from a cheap haircut through to discounted whitegoods or a cheap meal.

Customers subscribe to the group buying websites and receive a daily email detailing the deals in their areas. If they like an offer, they can choose to be part of it and if it goes ahead, their credit will be debited and they’ll receive a voucher for the deal.

The group buying websites usually approach businesses to take part. For the privilege of having their businesses featured, the website takes between 20 and 100% of the offer price as commission.

What are the consumer benefits?

Naturally the main attraction for consumers are the cheap deals on offer. Some businesses are offering 80% off their list prices for products, so there can be substantial savings to be made.

There’s also the opportunity to try out products or outlets you wouldn’t normally try for instance you might not usually be interested in Zumba classes, canoe hire or replacing your TV at normal prices but an 50% discount could tweak your attention.

Are there risks for the consumer?

There’s no such thing as a free lunch so there are a number of risks when using a group buying site.

Impulse buying is probably the biggest risk, if you’re a sucker for a deal then these sites will love you. It’s an opportunity to sign up for a lot of things you don’t really need, probably will never have used and maybe can’t even afford, but fact you saved 80% makes you feel good.

There’s also the risk you’re not really getting the full discount. A lot of canny merchants inflate the list price to make the amount off look greater. Many also reduce the size or quality of the discounted product to recover their margins.

A big risk is that you may never get to use your voucher. Either you’ll forget about the voucher you received or the merchant is so overwhelmed by the offer’s response that they can never get around to catering for all their people who took them up.

Finally there’s the spam factor. Many merchants see a group buying offer as an opportunity to build their mailing lists, so you may find yourself being spammed for fitness classes and restaurant offers for a long time after you take up a deal.

Business Benefits

These sites wouldn’t have taken off if there weren’t businesses to advertise on them and hundreds of merchants have taken up the opportunity. So there are clear benefits for the outlets that use these services.

The most obvious one is they get to promote their businesses. All of these sites claim to have subscribers numbering in the hundreds of thousands, so it’s an opportunity to get your products in front of a large audience.

Clearing excess capacity has been one of the main drivers for these sites in the United States where many businesses have found themselves with too much inventory or staff sitting around. These sites are a great way of clearing inventory or smoothing demand cycles.

Business downsides

The first problem is that excess stock. A business can’t afford to be carrying stock that requires big discounts to clear, if these offers become a regular feature then your business is in trouble.

Even if your business isn’t in trouble, these offers risk devaluing your brand. As the major retailers have found, offering frequent discounts trains your customers to expect lower prices.

Offering these bargains may alienate existing clients. Those customers who are prepared to pay full price aren’t only going to be irritated to find they could have got your products cheaper, but may also be unhappy with your business being overwhelmed by cheaper, price conscious clients.

Those price sensitive shoppers aren’t really your customers either; they are loyal to the buying platform and cheap deals, so if your competitors have an offer later on another platform, those customers will go there. There’s a lot of work to be done converting these bargain hunters into repeat clients.

One of the most misunderstood parts of group buying sites is the commission structure, most of the services charge a commission of between 20 and 50% – with some going up to 100% – on the advertised price, so that 50% discount to the customer is actually 60 to 75% off the merchant’s selling price. This can be a massive hit to a business’ profit.

Is group buying for you?

For businesses group buying sites can be a good idea if they are used as a part of a well thought out marketing strategy or to clear occasional excess stock. But they shouldn’t be seen as a quick way to attract new customers.

Customers are the big winners from group buying sites, as it’s the opportunity to pick up some great deals. But users have to use a bit of judgement instead of just jumping for the best looking deals.

It’s an old saying, but if anything looks to be too good to be true then it probably is. In the Internet age, that saying is probably truer than ever. Group buying sites can be good for both businesses and customers, but watch the wallet.

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Backing up your online calendars and contacts

It’s important to have a backup of your web data

Online mail services like Hotmail, Gmail and Yahoo! Mail are great for the small business owner and anyone who is often on the road. Having a central website containing all your emails, contacts and appointments makes life a lot easier when you don’t spend your time sitting in an office.

There is a downside though, if your account get hijacked or inadvertently closed down then all of those contacts, appointments and emails may be lost. So it’s a good idea to have some backup in case disaster happens.

Hotmail

The best solution for Hotmail users is to use the synchronisation tools included in Windows Live Mail. Download Windows Live Mail from the Microsoft website, install the program then Sign In to your Hotmail Account using the button in the top right hand corner of the screen then click the Sync menu and select everything. This will save a copy of all your Hotmail details onto your computer.

Yahoo! Mail

If you’re a Yahoo! user, you can backup your contacts by clicking on the Tools button that appears in the top centre of the contact screen above your contact list and select either export or synch. Synch will synchronise your data with devices like iPhones and computers although this varies on what equipment you use, while export will save a file to your computer which you can then import into whichever program you use. If in doubt choose the Comma Separated Value (.CSV) option as most programs can read that.

For your Yahoo! calendar, click Options on the right hand side of the screen and select Synch, the following page will take you through the steps of synchronising your calendar with various programs. That page will also explain how you can subscribe to a calendar from a different account which will then let you save.

Gmail

In Gmail you can export your contacts by opening the Contacts page, clicking on the More Actions button on the centre top of the screen then selecting Export. You’ll then get options for Google, Microsoft and Apple contact lists. If stuck, choose the Google option.

For Gmail calendars, at the bottom of My Calendars on the left hand side of the page click Settings. Under the Calendars setting tab, click the Export button which should appear under your list of calendars. This will then download a backup of your calendars.

A nifty tool for Gmail users is Backupify, a free service if your data weighs in at less than 2Gb, this can automate backing up your Google and Facebook settings.

Mobile phone applications

If you have a mobile phone, you’ll find the software that came with it may have a function to synchronise your emails, contacts and calendar. It’s a good idea to set this up if you have the opportunity.

Data is the most important thing on your computer and things do go wrong with technology so it’s essential you back it up on a regular basis.

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The web’s cheeky scammers

If you want to see some of the web’s more cuddly sharks, register an Internet domain

Yesterday I received a note claiming to be a renewal letter for an Internet domain, the part of a web address that appears after the ‘www’ or behind the “@” in emails. The kind offer was a mere four times the price that I’ll be charged by my current domain registrar when the time to renew the address arrives.

This little scam, which almost every Internet domain owner has encounterd, is one of the quaint but profitable rorts that make the online world so interesting. Just as the web has opened up massive opportunities to new businesses, it’s also given birth to a new generation of cyber-swindlers and con men.

Part of the problem is the cult of free we’ve allowed to develop on the Internet, by giving away goods we’ve trained our customers not to pay for stuff they find on the web. Where we can get customers to hand over their credit cards, many businesses find thin margins as shoppers are buying on price.

The domain registration business is good example, it’s a tough game being a domain registrar, the margins are tight and, being a transactional business, they offer a fairly generic service. Many tend to offer add ons, such as web hosting and design, to pad out the margins and for many registrars their domain registration service is a loss leader for more profitable products.

As a consequence for domain holders it’s worthwhile shopping around as the prices vary dramatically, particularly if you choose not to take up the registrar’s offer to host your site or desigy your pages.

Sadly you don’t always get what you pay for and before changing registrars I always make quality check on the Whirlpool website where I look in their Web Hosting forum to see what people have to say about the registrar’s service.

One thing that often pops up is why the heck are local registrars so expensive? With the bigger Australian registrars a .com domain costs between $20 and $75 a year while the US providers are delivering the same for almost half the price. The .com.au domains are nearly double the price for the .com equivalent.

I can understand it the .com.au being a bit more expensive given the charges imposed by AuDA, the Australian Domain Authority, but the discrepancy seems a bit on the high side.

Every business should have their own Internet domain registered, partly to improve website search engine ranking but more importantly to protect their trading name, so all of this is relevant to almost every proprietor or entrepreneur.

When you do register a domain, note who you’ve registered with and when the domain expires as even the legit registrars have a habit of invoicing very early for renewals.

The domain registration business can be likened to a shark tank, fortunately for the business owners who are forced to swim in it, the sharks are the relatively harmless gummy types compared to some of the others like hackers and fraudsters prowling the net.

With a bit of knowledge and attitude you can keep these predators from nibbling your toes.

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