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.