Denver Cloud Computing
Cloud computing is becoming a big buzz word in the last year. Buzz words come and go but will cloud computing be here for the future?
NOYNIM believes that cloud computing is not ideal for most Denver small-mid sized companies. In most cases cloud computing was created to introduce recurring revenue for IT corporations. For the longest time IT companies relied heavily on new sales to generate revenue; yes there is a lot of recurring revenue made on maintenance agreements but new sales is the ultimate revenue generated. Recently, we saw a shift in IT where companies are keeping equipment and software for longer periods of time. Look at windows XP, this operating system (OS) was released in 2001 and is still the most widely used operating systems in the world. That means for at least 10 years companies didn’t have to upgrade. Now companies are finally moving to windows 7 but its going to be another few years until windows 7 becomes the predominant operating system.
Now you can see it is more lucrative to sell a customer a subscription based product then purchase it outright. Yes the initial cost is greater but it’s much cheaper over the life of the product.
NOYNIM is here to serve the Denver based businesses knows that cloud computing is not needed for 99% of the small-mid sized businesses in the Denver metro area.
To prove this we have an example using actual figures (we are not going to use actual company names).
XYZ Inc will sell you a server (quad core xeon, 8GB memory, LTO backup, SBS 2010, Symantec Backup Exec, etc) with a five year bumper to bumper hardware warranty for $5,500
XMW Inc will rent you cloud computing for the same server for around $800/month. That’s $9,600/yr which is obviously a lot more than purchasing the server outright.
Some other things to consider when going to the cloud are:
- More money
o Solutions that are based on a lease model always cost you more in the long run
- Additional bandwidth requirements
o When you go to the cloud forget the high bandwidth you had with your LAN
o The lowest T1 around Denver is $350/month, we recommend a lot more than a T1 if you are using a cloud based server. With an internal server you can always get by with less bandwidth at the edge.
- Lack Privacy
o Many internal applications lack security and once you put that in the cloud you are going over the internet which poses a big security risk
o One can argue the use of VPN, but you still need to trust that the other side (XMW Inc) is properly configuring the VPN and separating your traffic from the other customers’ data.
- Lack of ownership
o You no longer own the hardware
o Look at the wikileak situation that was hosted on Dandazon’s (made up company J) cloud and how they shut down the service.
§ If you don’t abide by the cloud companies rules they will shut you down
- No flexibility
o If you wanted to bring the data internal or move to another provider it would be costly and take a lot of time
At NOYNIM we like to setup solutions that are completely owned by the customer. We don’t bind customers into long term contracts or pitch solutions that ultimately cost our customers more. With an in-house server solution customers always win. They have cheaper solutions and remain flexible. Think about this solution which happens all the time. You have an IT organization servicing all your IT needs and over time you lose their trust and want to leave them. With a cloud solution it becomes that much more difficult because nothing belongs to you. On top of finding a new IT company you have to migrate everything off which is very expensive. Some major changes that will need to be done are: DNS record changes since IPs change, VPN configuration, local settings into the cloud server, data migration and much more.
The best solution is to stick to a solid Denver IT outsourcing organization such as NOYNIM. Please give us a call at 720.524.8616 and we can provide you more information and case studies. It’s wise to get all the information up front before it costs you 10 times more down the line. We will be happy to conference in your favorite cloud provider to show them they are charging you more.