It’s a very common question – ‘Why should I get rid of my server?’ And one I generally counter with ‘Why would you keep it?’

My goal as an IT person is to make IT simple – it should just work. But more than this, it should be cost effective and deliver return on investment. Cloud services delivers all of this and I would be doing my clients a disservice if I did not advise them.

Servers have been the life blood of IT, from big mainframes in the 1960s and 1970s to the emergence of the office server in the late 1990s. So you might be wondering why I am gung-ho about moving not only my business but also my clients into cloud-based environments. For an IT provider you would think that would be cutting off my nose to spite my face!

Rewind to the late eighties and early nineties and only large companies had computer networks with servers. I remember working in an engineering firm in 1994 which had about 120 staff. We all worked on desktop computers and saved everything to floppy disks (if you don’t remember, they stored a massive 1.44MB, back in the day). That was because there was no file server or network.

Then a worldwide game changer arrived: email. At that time, only large businesses had their own email servers for which they were handing over very large chunks of change for the privilege. Most businesses at this stage were using POP. This stands for post office protocol for email. The mail was collected by the internet service provider (ISP) and held for collection. It was then downloaded to the desktop computer via a mail client. The email was now in one place and unless that desktop was backed up, it could be lost if the hard drive failed.

In NZ, 97% of our businesses are deemed to be small businesses (less than 20 staff[1]). Things became a bit easier in 2003 when Microsoft brought in the Small Business Server 2003. This software stack gave small businesses all the power of having an on-premises exchange and file server without the massive licencing costs. With those benefits, there came the responsibilities of maintenance, power and the backup of essential business data.

Fast forward to now and the trend is moving back, similar to where IT was at the engineering firm. I still work with a desktop computer but unlike 1994, I now have email. Also I don’t save to floppy disk and I work from another three devices which can access the same data.

All this happens without an in-house server – my desktop, iPad, Microsoft Surface Pro 3, and iPhone all connect and collaborate with the same business data through cloud services.

Why I’m moving to the cloud

Being in IT and having technicians at my disposal, you would think that it would be just as easy for me to keep the servers that I have. But there are still costs and risks associated with this system which is why my business is steadily transitioning to the cloud.

I am moving away from an in-house server and I’m encouraging clients to do the same where possible. The three key points I put forward to clients for consideration are: simplicity, cost, and business continuity.

  • Simplicity – no more management of servers. With cloud services, the management associated with hardware, power protection, software updates and backups are all handled for you. I am in IT and I agree this should be easy, but we still have to stop from time to time to maintain our own systems.
  • Cost – there is no server hardware to replace. As your smaller servers can cost upwards of $10,000 to replace every three to four years. I’m sure most small businesses will agree that this is a nice capital expense to not have to worry about any more. There are also the costs of running the server hardware: power, cooling, warranty extensions is also upgraded. I have seen software licensing exceed the price of the hardware. Also, over the lifetime of the hardware, the acquisition cost is only about 30%; the other 70% of costs are in ongoing management and general running of the hardware.
  • Business continuity – you can access your data from anywhere at any time. Your server not sitting in your office. So you don’t have to think about how to access your business data if you can’t get into your office, or the server is gone because the building has burnt down. As long as you have an internet connection you have access to your information. An added benefit is that my insurance costs have reduced because my business is less reliant on my physical premises.

With the right cloud services and software, I have found an added bonus in ease of access to data and collaboration. No more VPN to servers or remote desktops. My favourite bit is the ability to have many people working on the same document at the same time. I love being able to work by the pool on my iPad writing documents in Word (with my business development manager Roland tweaking them as I go). For me that is mobility at its best!

Preparing to make the change

So what should you be doing in order to get to the point where you can scrap your server? Here is a checklist of things that you can do to get you and your business started. Your aim is to make it easier for your data to be transferred to a cloud environment.

  • Have a good clear-out of your email. This means removing all attachments that are over 20MB and getting rid of your deleted items and junk mail. (Check first that your staff don’t use their deleted items box as archive storage – there will be tears when they forget and delete it!) The bigger the email box, the longer it will take to move it to the cloud (adding extra costs along the way). The longest move we have done is one client who had a user with a 17GB email box – it took four days to move the data to the cloud.
  • Review what your email looks like – what is typically received and sent? If you are receiving lots of large files is there a better way to do this than email?
  • Review your list of email boxes – archive all the old staff or unused mail boxes and have a look at any distribution lists and group mail boxes.
  • Sort out your large file shares – these often have thousands of documents. This is going to probably take the most time to sort out. A good way to deal with it is to set up a separate new (clean) file system and then as you access a file save it in the new system. Anything you have not touched for six months can probably go on the list to be archived. Before you do this, look at the structure and permissions of your file shares. Who has access to what, and why? Are there duplicates of files? Some file shares (even in small businesses) are large, complex and messy. This is simply because of their somewhat organic nature – people think differently and file things in places which are logical to them but not to others.

When you set up the new (clean) system this is a good way of having a tidy up.

  • Review your software that is used in-house. In our experience, the software that usually throws a spanner in the works consists of accounting packages and specialist databases. Your IT provider can help you decide if these can move to the cloud or help find a cloud service that can already do what you want. If you are running Office 2007 or earlier, I strongly recommend an upgrade especially if you are in a Microsoft environment. The latest version of Office has much tighter integration with their cloud services.
  • Get a good solid internet connection, if you don’t already have one (and no, ADSL is not in that category). Make the most of ultrafast broadband (UFB) if you can get it. Speed becomes super important when you are going cloud – you don’t want your internet connection slowing you down. You may want to consider alternatives, such as a secondary connection in case your main connection goes offline. Remember that once you work from the cloud, no internet means no access to data. Keep this in mind if you have mobile data (sim card or hotspot) on laptops etc so you will still be able to work as normal.

In my experience most small to medium businesses should be able to go cloud-based with little or no fuss. And the cost savings associated with it are worth it. For example, a five person business can have their email and files cloud-based via Microsoft from $30.60 per month ($6.10[2] per person per month).

Dealing with FUD

Now in saying all of this, there are probably some things that are going to stop a company from moving to a cloud environment. The first and biggest is FUD, (fear, uncertainty and doubt). It is largely unwarranted, and any concerns you may have can be dealt with. Here are some typical FUD-like questions:

Q: The best one … What if the internet cable between NZ and Australia is broken, how will I get my data?

A: The cable is actually two cables.[3] One goes to Australia, the other goes to Hawaii and then on to the US. The chances of both cables getting severed are minimal. If they both did then everyone in NZ would be in the same boat – no one would be getting email from outside of New Zealand and we would be back to fax machines. For data and files, fortunately we also have NZ-based, well-established and reputable hosting providers. So if using international cloud services is of concern for this reason, then host locally.

Q: I could get hacked like those celebrities did!

A: This was big news in 2014. These celebrities trusted their personal information to cloud providers, such as Apple. In some instances the accounts of the celebrity had their password reset because of poor security questions (e.g. “What was the name of your first pet?”) The explosion in social media means that information such as this is easily obtained and voilà – password reset, access gained.

The way around this is to have good security policies. Part of this is complex passwords which should be changed regularly.

Q: Who owns and controls my data?

A: Ownership and control are separate issues. Read the terms and conditions. Any good cloud provider will have them and you would be an idiot if you did not read them. Yes they do have control of your data and the onus in on the provider to ensure it is backed up and in multiple locations. Again, know who you are dealing with and do your homework. I should point out that we have not had a cloud provider fail in NZ yet, so there has been no test case on how this would be dealt with.

Note there are some software services that do “own” your data, so understanding the terms and conditions is very important. Mostly these services are free services without a service level guarantee but we have come across some paid services that are very ambiguous about ownership.

Don’t forget, there is a toe in the water approach which we often start businesses off with. We will move their email into the cloud and leave files on a small server. If you don’t want to fully dive in this is a good way to get comfortable.

Taking ‘smarter not harder’ to a new level

The cloud is allowing us to work smarter not harder. So often this phrase is bandied about but particularly for smaller businesses this is now very doable. You can access services on a monthly subscription that, if you had to purchase the software, would cost you thousands of dollars annually – such as business intelligence. It is giving small business access to services which previously could have been out of reach.

When you do make that transition to the cloud you can expect to save on your IT costs. I strongly recommend that you invest any savings back into your data and the experience your clients are receiving from you. Then you can take working smarter not harder to a new level!

This article was written by Delia Gill, MD of IT Engine, and originally appeared in the print issue of NZ Business Magazine, February 2015. Image from Werber Fabrik.

[1] From the Small Business Sector Report 2014 – Source: Ministry of Business, Innovation & Employment.

[2] Pricing from Microsoft New Zealand, December 2014, for an Office 365 Business Essentials plan. Microsoft updates their pricing and plans regularly.

[3] Source: Southern Cross Cable Network – http://bit.ly/scc_overview

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