The Cloud is not only coming, it’s here and as much as many businesses still hang on to the familiarity of an on-site server, there is a growing acceptance that – one day, in the not too distant future, on-premise servers will become a thing of the past. It is true to say that even now, it is becoming increasingly difficult to source a reasonably priced server that is fit for purpose for a small to medium sized business.
As with all IT Strategic moves – timing is key. The concept of moving your server functionality to an area you can’t see or own outright can be mind blowing to engage with. This is made an even tougher strategic decision if the software you are using was not at its inception, designed in an environment that lends itself to Cloud hosting.
Take into account the bigger picture
As an example, Sage 50 Accounts Professional, whilst it can be moved to a privately hosted cloud space returns a rather shaky investment if you look at the monthly cost. The Sage 50 suite has proved to be the staple work horse of many an SME since the turn of the century and has served many businesses well. The Sage 50 platform however was not designed to run on a Cloud server and thus it requires a far greater Cloud ‘space’ than other applications that are purely SQL. More ‘space’ means a higher monthly cost which for most businesses is very hard to justify. Whilst Sage as a brand has launched Sage 50C which enables businesses to pay for a subscription that includes access to Sage’s Cloud infrastructure, this is only proving to be satisfactory for those companies that only use the Sage 50 Accounting package in complete isolation.
For those businesses that need to share data with the other applications they use to run their businesses – for example, Sage 50 Manufacturing, CRM or a bespoke development – the outcomes are unsatisfactory, with system crashes and lost data which means downtime and inevitably – lost revenue. These businesses are not insubstantial in number in the UK. If you manufacture, assemble or distribute you will likely be using additional solutions to enhance your use of Sage 50 Accounts. Sage 50C then is likely not for you.
So where do you go from here?
At the point a server is ready to retire to the server heaven in the sky businesses may well be advised to use this juncture as an opportunity to affect the wider IT review.
This Really Happened!
As an example, we could consider a manufacturing business that uses Sage Accounts 50 and Sage Manufacturing. Their server needs replacing, and they have not yet moved to the now mandatory Sage subscription model which returns an additional annual software cost of around £1800. The value of the inclusion of a new accounts software version every year is diminished by the fact that their use of Sage Manufacturing and the necessary compatibility between two the applications.
Installing a successful accounts upgrade is not merely a pain free download done in-house. Their Sage Business Partner would have to come on site each time they upgrade their accounting version and that carries an additional cost. This business is highly unlikely to want to upgrade every year therefore unless there is a ‘killer feature’ included.
This manufacturing business also needs to increase user numbers and is taking on a second site. To increase user numbers with their current software will return an additional cost in licensing and support. The Sage 50 suite is not suitable for multiple sites.
The renewal for their CRM licensing is also imminently due. Whilst there is some level of integration with their Sage suite – the ability to mine sufficient data and report on sales activity is minimal.
The business then starts to identify areas of their processing that an accounting package with an integrated manufacturing solution can never support satisfactorily.
Increasingly, all businesses have to provide a robust audit trail, with automated serial number recording and detailed part numbers to meet their QA requirements. Processes that are not supported by a solution must then be satisfied manually which is time hungry and vulnerable to human error.
Ultimately – this particular company, migrated away from Sage and Salesforce, ditched an on-site server and migrated to NAV on Azure. Their 4 year plan showed that this move to an integrated, single databased, fully SQL, cloud hosted, multi- site and multi- language ERP solution actually returned their investment in full during that period when they took into account the labour savings from removing duplicate entry, resource redeployment to other business areas, not having to replace legacy printers and the vastly increased sales rates and factory floor productivity.
Take a 360 view
In conclusion, in this widest form of IT Strategy review the questions extend from what type of server to what type of server and what type of solution and what is the very best return on investment overall?
One of the most important considerations for any business needing to replace their server has got to be whether or not their current solution is a good ‘fit’ for their business and perhaps more importantly is it a good ‘fit’ for the Cloud. Remaining too long in an IT ‘legacy’ scenario which is supported by too much human intervention will only make a future move to the Cloud, which is increasingly looking inevitable, costlier overall and over time.
One caveat to this must be that even if a move to the Cloud is not right for you, right now – any replacement server businesses purchase now should still be a suitable ‘springboard’ for the eventual move to the Cloud, such as Sever 2016. Eking out the life of your SBS server will only ultimately result in a more complex, painful, stressful move to the Cloud.
Thought For the Day
Managers tend to pick higher-risk options when forced to choose between competing alternatives to complex situations, according to researchers from the University of Guelph and University of Waterloo whose study was published recently in the Journal of Business Ethics. But when they’re not forced to choose, managers tend to reflect more and solve problems with fewer negative consequences, says the study. Source: ScienceDaily
In plain terms, a knee-jerk reactive decision results in less effective action overall when compared to a considered, structured, timely, proactive one.