Tag: cloud computing

Using free services

What traps are there when using free online services

The lure of free is attractive – free web hosting, free software or the free lunch always grabs our attention.

Deep down though we know there’s really no such thing as a free lunch and the same is true with all the other free deals, there’s always a cost of some sort.

Often the definition of free can be a problem; there’s the social media model of free that harvests your personal data, the Silicon Valley version that hopes a big company will buy the service, the earnest work of volunteers and the freemium marketing model.

Most computer users have used the freemium model, this is where the business gives away a basic free version in the hope of encouraging enough customers to the paid premium version that has support and additional features. Common examples are AVG Free Antivirus, Google Apps and Mailchimp’s Forever Free plan.

All of the freemium services come with a catch, AVG’s free software is only licensed for home use ­– so no using the free version on your office computer – while Google Apps only supports ten unpaid users and if you have more than 2,000 people on your mailing list then Mailchimp is no longer free.

Developing a free product to raise your profile is a common way for entrepreneurs to enter markets and establish a reputation. This is particularly common in the software and web design industries where coders and designers offer free applications or templates to build their portfolios.

These products developed by entrepreneurial designers and programmers are often great, but as there is the risk the developer will lose interest as their business evolves. The WordPress Guy, Tony Constantino, warns “when a free theme stops being supported in 6months you will get left behind”

By far the most lucrative free model to date has been the advertising supported business. This is nothing new as commercial radio and television stations have had this model for nearly a century, but Google have taken this online with their advertising platform that funds their search tools and many other free services.

A variation on the advertising supported model is the data mining carried out by social media sites like Facebook and LinkedIn. This isn’t as transparent and may be a problem for business users who don’t want to share their client details with an internet service.

Increasingly the free services are based around the Silicon Valley model of a deep pocketed venture capital company funding a business with the aim of building the customer base through offering freebies services with the aim of selling to a trade buyer.

The danger with the Silicon Valley VC model is its instability as most companies shut down without finding a buyer. Even when they do find someone to buy the venture the service often doesn’t last as we saw when the once popular free hosting service Geocities was shut down by Yahoo! in 2009.

Despite the traps free can be good for your business but you should understand the terms, conditions and hidden costs that come with the products. Often you’ll find paying for a product delivers a much more functional and better service that requires less of your time.

One service that might help businesses choose the right free or trial online services is Cheapstart, that compares the various services available for entrepreneurs starting out.

Why small businesses aren’t using cloud computing

The IT industry needs to understand cloud services and small business

As part of their push into online applications, telecommunications company Optus yesterday released their Digital Ready report examining Australian small business’ use of cloud computing services.

One of the notable results is that only four percent of small business proprietors claim to use cloud computing services and 59% are unsure of what exactly cloud computing is.

Those results are surprisingly poor and indicate businesses don’t see the benefit or value in cloud computing services. There seems to be a number of factors driving this.

Misunderstanding cloud computing

That over 90% of small business owners claim not to be using cloud computing indicates many simply don’t know what these services are. If asked most would admit to using Facebook, web mail or some other online or social media platform that runs on cloud computing.

That’s an education issue and if anything is a criticism of those of us – including myself – who are trying to explain the concept. We can do better as an industry.

Security

Many businesses, big and small, misunderstand technology security risks and have an inflated view of how secure their own desktop, networks and servers are. In many ways the security of cloud services is better than most small business IT systems.

Where the security argument falls down is in the hyperbole of many IT security vendors – every month we hear breathless reports, repeated by gullible technology journalists, of how smartphones, social media or Apple Macs are going to be struck down by a new wave of viruses and each time the “threat” quietly fades away into obscurity.

As long as hysterical fear stories about the security of smartphones and cloud services circulate in the media, it’s understandable that small business owners will be wary of trusting technologies they don’t fully understand.

Sunk costs

Many established businesses have sunk costs in existing software and hardware. For proprietors or managers to justify moving a new service, whether it’s on the cloud or not, there has to be a clear financial benefit in doing so.

Terms of Service risk

Cloud services – whether free or paid – come with a set of terms and conditions. Online Payment, social media and other cloud computing services have shown themselves to be quick in shutting down business accounts without warning, any due process or an accesible way to resolve disputes.

Quite rightly, many business owners are wary of risking key processes or data to services that might cut them off without notice and who often lack a customer service culture.

The reluctant advisors

Business IT consultants struggle with cloud services. Cloud services are a threat to those used to making money from selling servers, software and desktop computers.

For the more far sighted consultants, the thin margins offered by cloud services mean they have to rely on fees for service. If something goes wrong, the client’s first call will be to the trusted advisor and not to the service providers’ helpdesks.

This is a headache too far for many consultants as they know they’ll probably not get paid for the time spent sifting the truth in a blizzard of vendor finger pointing. It’s far less risk and more profitable to recommend a server and desktop solution.

Is cloud computing important?

For businesses, the economics of cloud computing is changing industry dynamics. With lower capital costs, it makes enterprises more flexible and responsive to changing markets.

Cloud services are critical to businesses – for established companies they’ll find themselves losing out if they don’t at least consider the advantages and choose the right online tools.

The onus right now though is on cloud computing vendors to tell their stories better and demonstrate why they can be trusted with key business processes and valuable data.

The agents of change

It’s tempting to think social media and other web tools are driving change, but much deeper things are changing.

It’s understandable technologists see technology as driving change. Often it’s true – technologies do build or destroy businesses, alter economies and collapse empires.

Sometimes though there’s more to change than a new technology changing the economy and while it’s tempting to credit innovations like the web, social media and cloud computing with many of the changes we’re seeing in the world, we have to consider some other factors at work.

The end of the 40 year credit boom

In the 1960s, the United States started creating credit to pay for the Vietnam war; they never stopped and after the 2001 recession and terrorist attacks the money supply was kept particularly loose.

The worldwide credit boom allowed all of us –Greek hairdressers, Irish home borrowers, Australian electronics salesmen, US bankers and pretty well everyone else in the Western world – to live beyond our means.

In 2008, the start of the Great Recession saw the end of that period and now the economy is deleveraging. Consumers are reluctant to borrow and businesses struggle to find funds to borrow even if they want to.

Any business plans built on the idea of almost unlimited spending growth are doomed. The era of massive consumer spending growth driven by easy credit is over and the days of expecting a plasma TV in every room are gone.

The aging population

An even bigger challenge is that our societies are getting older, the assumption we have an endless supply of cheap labour is being challenged as a global race for talent develops.

The lazy assumption that economic growth can be driven by building houses and infrastructure to meet increased demands will be found wanting as the Western world’s populations fail to grow at the rates required to power the construction industries.

Our societies are maturing and increased economic growth and wealth is going to have to come from clever use of our resources.

Innovations in computers and the Internet – along with other technologies like biotech, clean energy and materials engineering – will help us meet those challenges but they are tools to cope with our transforming societies, not the agents of change themselves.

Had  tools like social media come along in the 1970s or 80s they probably would have been massive drivers for change, just like the motor car and television were earlier in the 20th Century. In the early 21st Century they have been overtaken by history.

Smart businesses, along with clever governments and communities, will use tools like social media, local search and cloud computing with the demographic and economic changes, but we shouldn’t think for a minute the underlying challenges will be business as usual.

Cloud computing and Small Business September Digital Day

How can online tools help grow your business?

As part of the NSW state government’s Small Business September Digital Day for Startups and Growth Businesses, we’ll be looking at exactly what cloud computing is and how it can help businesses.

Some of the services we discuss in the presentation are listed in the Netsmart’s web post on the 5 essential cloud computing tools for business. Although there’s many more we’ll mention that can help organisations of all sizes.

Given the time constraints and the event’s focus is on the specific social media and cloud computing tools available to small business, much of the background information to the Online Tools to Turbocharge Your Business session is available in the previous series of posts about cloud computing previously done for the 2011 City of Sydney Let’s Talk Business series.

Detailed information from that presentation can be found on the following pages;

The networked business Part 1: What is cloud computing?
The networked business Part 2: The benefits of cloud computing
The networked business Part 3: Managing risk in the cloud
The networked business Part 4: The business case for cloud computing

All of the tools discussed in the Small Business September presentations are available in our ebook, Online Business Essentials which is available for all subscribers to our newsletter.

If you’d like to see the presentations themselves, both The Networked Business and Online Tools to Turbocharge your Business are available through the Slideshare service.

Seats are still available for both of the Digital Day presentations at the Telstra Experience Centre, Level 4, 300 George Street, Sydney. The Start Up session begins at 8.00am and the presentations for growth businesses begins at 1.00pm.

Come along if you’d like to learn how social media and cloud computing can help your business improve productivity while building an online brand.

The quiet revolution

Productivity gains of the 1990s were based on accessible computer technology, are we about to see a cloud computing revolution in our workplaces?

Earlier this weekPricewaterhouseCoopers released their Productivity Scorecard, which showed Australia’s business efficiency isn’t improving as fast at it once was and the country’s relative performance is steadily slipping down international tables.

One of the notable things in the PwC report is the massive growth of productivity in the 1990s, a point emphasised by the accompanying paper on business productivity in a presentation by economist Saul Eslake last month to the Reserve Bank of Australia.

Economists attribute most of this late 20th Century growth to deregulation and privatisation by governments in the 1980s and 90s but the driving force was really computerisation that allowed most businesses to do much more with less.

Immediately noticeable for an Australian walking into a British, European or Japanese office during the early 1990s was the lack of desktop computers.

Australian businesses adopted technology a lot quicker than their counterparts outside of North America and this alone was probably responsible for the country’s relatively good productivity growth in that decade.

The arrival of computers – followed by desktop printers and Internet access – suddenly gave small businesses access the means to do jobs that even the biggest corporations had struggled to do previously and drove a rapid reorganisation of most offices.

Everybody from secretaries to architects and graphic designers to lawyers – even economists – suddenly found they had the tools at their fingertips to do work they could have only dreamed of prior to 1990. This drove massive productivity gains in businesses of all sizes.

From 2000 onwards, things became tougher as the easy gains had been made and the incremental improvements in technology, such as smartphones, cloud computing and web publishing didn’t have the same substantive effect the early PCs delivered with spreadsheets, word processing and desktop publishing.

The real challenge we now face in business – and government – is to start harnessing cloud computing driven online services that promise to deliver similar productivity gains to what we saw twenty years ago.

We have the tools; online office apps, Customer Relation Management services (CRM) and sharing platforms all deliver major improvements in the way we work within our businesses and with external partners like contractors, suppliers and event clients.

One of the most powerful aspects of cloud computing services is reduced capital cost meaning reduced barriers to entry into markets we previously may have thought were safe.

This easy access into established sectors is one of reasons the retail industry’s giants are now struggling as online competitors can setup cheaply and quickly while offering better prices and service.

Retail is only one of the more obvious sectors being changed by these technologies and as the decade continues we’re going to close to every industry be radically changed by low cost computers accessing the Internet.

As business owners and managers we need to look at our own processes and systems with an eye on how we can improve workflows and customer service within our organisations.

Those of us who manage to get these new technologies are going to reap the benefit of the next productivity wave, those who don’t are going to go the way that many uncompetitive and slow to respond industries did in the 1980s.

Online tools to turbocharge your business

Flying Solo’s Independents Day looked at how the web can help business productivity.

Flying Solo’s 2011 Independents Day conference featured our Online Tools to Turbocharge your Business.

We looked at some of the most popular cloud computing, social media, productivity and collaboration tools that can help a business make more money and grow faster.

Most importantly, it shows how business owners can free up some of their most valuable asset – their time.

Some of the tools we discussed include the popular social media platforms like Facebook, LinkedIn and how they can be used for customer service and market intelligence on top of being marketing services.

We also looked at how collaborative and cloud computing services can help small businesses work together and improve the ways consultants can work with big business clients. In many ways, collaborative tools like Google Apps, Zoho and Dropbox help build team and deliver projects more effectively.

The Online Tools to Turbocharge Your Business presentation itself is available on Slideshare and if you subscribe to our newsletter, you’ll receive a free copy of the accompanying Online Business Essentials e-book.

Online Tools to Turbocharge your Business

The Networked Business

The first of the City Of Sydney’s Let’s Talk Business looked at how business can use the cloud

The first of the City Of Sydney’s Let’s Talk Business workshops looked at how business can use cloud computing services to help improve the marketing, operations and profitability.

My presentation, Business In The Cloud covered the definition of cloud computing, the benefits for business, the risks and the case for getting on the cloud.

The text of the presentation, shown here has been broken into four segments each addressing the individual points.

What is the cloud?

The opening section looked at what cloud computing is, the underlying definitions and how it works. We discussed how the underlying concepts of cloud computing are nothing new and how the concepts of shared resources across a reliable and robust network are part of the very reason for the Internet itself.

The benefits of cloud computing

Having defined cloud computing we look at the benefits of these services, focusing on the flexibility online software delivers and how businesses can use these tools to quickly seize opportunities in our fast changing society.

Risky business

Every new technology has its risks and cloud computing is no different. In our third presentation we look at some of the online traps and how to manage them.

The business case for cloud computing

Concluding the presentation is a summary of the business case, balancing the benefits and the risks and concluding with how businesses might use cloud services.

Further information

Illustrating how businesses can use online tools, we have a list of some of popular business cloud services that can help your organisation use the web to be more flexible and innovative.

The presentation was part of the Let’s Talk Business series of workshops run by the City of Sydney and held at the Customs House. There’s three more events in the 2011 series covering the new consumer, mobile internet and business leadership.

If you’ve been along to the Lets Talk Business events, or have some ideas on how business can use cloud services, we’d love to hear your comments.

Other peoples’ platforms

The risks in the privately owned web range from obscure terms of service to arbitrary payment problems. This is why you need to control as much of your business’ online presence as possible.

“We have successfully established an online business, but we have run into problems with Ebay (indefinite suspension – unfairly I might add)” wrote Ralph*, an old client.

“We are pretty desperate, as this is now our sole business and we are now without an income.”

The Privately Owned Web

Ralph’s problem is typical of thousands of businesses that rely on one Internet service. Some months back we looked at “Nipplegate”, the story of a Sydney jeweller who had her Facebook page closed down because of her anatomically correct dolls.

All of these services are privately owned with their own terms and conditions along with their own corporate objectives. If you choose to use their product, you have to follow their rules – just like a shopping mall management can order you off their premises because they don’t like the colour of your socks.

The most glaring example of this is Wikileaks where Amazon, Paypal, Mastercard and Visa all threw the whistleblower site off their services for allegedly breaching their terms of services in various obscure ways.

The Terms of Service Trap

A business’ Terms of Service usually feature clauses wide enough to catch even the most honest and diligent business, this is by design as it gives management the excuse to throw anyone who makes their lives difficult, which is exactly what has happened with Wikileaks.

While Ralph’s problem is nothing like the scale of Julian Assange’s, all of these stories illustrate the dangers of relying on one service for your livelihood. Should that service change the way it operates, then any business that relies on that could be broke in hours, as many businesses that rely on Google search results have found.

Most of the Internet is not a public space, almost all of it is privately run along similar lines to that shopping mall or a walled estate.

Ralph and Julian Assange have shown us the limitations and risks of the privately operated web. As citizens and business owners we have to understand these corporations’ objectives are not always the same as ours and make judgements on how we live with the risk of finding ourselves in breach of a Term of Service in our business or personal lives.

We’re still in relatively early days of the net and all of us are still learning. One lesson is clear though, we can’t allow our livelihoods to be held hostage by a small number of big technology companies. Make sure you have alternatives to your online channels.

*Ralph is not his real name

Why cloud computing isn’t just about savings

Looking for massive cost savings should not the sole reason for choosing a new product.

“Billions of IT savings in the Clouds” trumpeted the Australian Financial Review last week in a front page article on cloud computing that claimed moving services online could “slash technology costs by up to 80 percent”.

If nothing else, those lines lead any IT industry veteran to rise a wry eyebrow; a business that adopts a new platform, technology or vendor solely on the claim of massive cost savings is in for a world of pain, disappointment and heartbreak.

There’s no doubt that cloud computing and software as a service are the IT industry’s growth areas and there are many benefits for the businesses that adopt these technologies. Reduced costs is one of the attractions, but it isn’t the only factor a businesses should consider.

Other aspects are the flexibility of not locking yourself into specific hardware and technology platforms, reduced capital and labour commitments along with improved security, reliability and data protection.

This last point is probably the killer reason why you shouldn’t be looking for 80 percent cost savings with any product. As we discussed a while back, to go onto the cloud you have to trust your supplier has the utmost competence and integrity. A provider who offers nothing but slashed costs will struggle to provide peace of mind.

It’s likely in a few years time only the biggest of the biggest companies will have inhouse IT staff and servers as most business IT operations will run over the internet and through web browsers. Most businesses will think having IT staff on the payroll is as unusual as employing a full time plumber or electrician in the office.

Although we probably won’t get to bank those savings — as we’ve found with the roll out of IT services in the last 20 years, new industries will develop that will soak up the labour and create new cost centres. While today’s services may be 80% percent cheaper, just as today’s computers and mobile phone are 80% cheaper than those of 20 years ago, we’ll be using other services and the price of those will soak up a lot of those savings.

A bigger concern is for the cloud and software as a service industries themselves. If online services are identified as merely a cost cutting product, then these markets are going to be rapidly commoditised with a race to the bottom not dissimilar to what we’ve seen in the PC industry. Which will perversely mean security and reliability conscious businesses will keep their IT in house rather than risk it to a cheap charlie data service.

History’s shown that selling and buying cheap in technology is a mug’s game. So don’t get seduced by claims of ridiculous savings with any technology; be it cloud computing, telecoms services or any other line item. All too often that cheap price or massive saving hides some nasty traps.

Because of the compelling benefits cloud computing is the way businesses will go over the next few years but those who choose a platform simply because it appears 80% cheaper probably won’t be around to tell us about it.