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Digital Business insights: Cloud?
THERE is a lot of hype about the 'cloud'. If you believed it, you would think that everybody was rushing to adopt cloud solutions, when there is little evidence to support that proposition at all.
Our research over the last few years shows that movement into the cloud by small businesses and not-for-profits in Australia is very slow, often painful and problematic.
Cloud isn’t a problem for the larger organisations In Australia with CIOs and IT departments, who can pay for reliable high speed broadband, VPNs, systems integrator support and disaster recovery when things go wrong.
Which they do.
But for the nearly 2 million non-employing and small to medium sized businesses in this country … beware and take care.
Cloud is a fog.
Some services delivered over the internet are undeniably successful – most of the time. Especially the free ones.
Web based email is the stand out cloud success at 26 percent. But even webmail is still mostly used as a supplement to traditional MS Outlook or Outlook Express.
The wise and the thoughtful are taking a 'belt and braces' approach. Which is a good idea.
The best plan for any of us is to mitigate risk in a business, not to add to it.
It is the same with cloud storage at 13 percent. It is proving very useful for mobile workers to capture and transfer data back to home base. And that is how most people are using it.
There is slow but steady adoption of cloud based accounting software, especially by new businesses – 3 percent using Xero. But this core business decision is often first promoted and then supported by a business accountant.
Salesforce is very successful at the top end of town, but most smaller organisations can’t afford it. It’s not the cost of the package it is the cost involved in customising Salesforce if you want it to suit the way you run your business.
And on top of all that is the fact that we don’t yet have reliable, affordable high speed broadband in this country, and there is a good chance we won’t have for many years.
That impacts all businesses that try to use cloud solutions and the following story illustrates some of the risks involved.
“We are a small wholesaler (about 10,000 parts). We tried a cloud solution for a few months but had to abandon it. It was way too slow. Previously, we could take a 20 line phone order in less than a minute (about 60 screen refreshes). With cloud, those refreshes took a couple of seconds each and so added two minutes of 'pause' to a one minute order! Both our clients and our phone operators were frustrated. The death knell came when a minor storm left us without internet for four hours! Our clients are normally very loyal – but if you can’t fill their order for more than 10 minutes, they will ring your competitors! That exercise severely damaged our business.” -- Small wholesaler.
There are many other stories like this, but you can see that until cloud solutions and their customers can rely on a platform that is fast, robust and affordable, problems will occur.
The NBN would have provided that platform in time. Now we don’t know what is going to happen.
In the meantime, if speed isn’t a mission critical issue for you, then many managed services solutions may be useful, as long as internet access is maintained.
Because, speed is one issue, but reliable connectivity is another.
“I understand your frustration” – NO TELSTRA YOU DO NOT – neither do you even care! Have you EVER tried to run an SMB without any internet access or landline, do you get that prospects who call or want a remote demo WILL GO AWAY we lose business as a direct result – I can't even count the lost opportunities that disappear, or reputation damage because people suddenly think we have shut up shop as the phone does not answer. The lost productivity because we cannot access our cloud based tools and systems. I CAN NAME LOTS More. NO TELSTRA YOU DO NOT UNDERSTAND!” -- Unhappy customer on Whirlpool.
Every business needs a reliable and firm foundation to operate from, with backup options for when things go wrong. In a digital economy reliable connection is critical for most business categories and their operations.
Privacy isn’t important to everybody, but for those who are concerned about privacy, protection of intellectual property and data security, Edward Snowden’s ongoing revelations about the NSA hoovering up any data they can get their hands on, clearly shows that storing your data on an American cloud storage platform is probably not a wise thing to do.
That won’t bother all business owners, but it will bother some.
And even worse, the Patriot Act means that even if data is stored in Australia but managed by an American company, then the NSA can still access the data if they decide they want to. And the American company in Australia will not be allowed to inform you that anything has happened.
Probably won’t happen, but could happen, and yet another thing to consider carefully especially if you manage private and personal data for customers.
If that is a real issue for you, then local Australian storage using Australian, not American companies for storage, hosting and software solutions is the only way to go.
And even if privacy and data security isn’t an issue for you, supporting the Australian ICT industry is still a good thing to do, because even though movement into the cloud is slow, it is also steady.
We will increasingly rely on services delivered across the internet on a subscription model and the closer to home the services are managed, the more reliable they are likely to be.
Something goes wrong. Who are you going to call?
Somebody just down the road? Or somebody that makes it just about impossible for you to find a contact telephone number in the first place … connecting you with a person that barely speaks your language, and is outside of your time zone?
It is only when something goes wrong, that you realise how alone you really are. And how little leverage you have with a big multinational.
"You are caller 228 in the queue, please hold.”
It is better to be an important customer to a local supplier than one of millions.
So the more we can build and support local hosting, storage and managed services tailored to our distinctly Australian digital economy needs … the better it will be for our businesses, our ICT industry, our regions, our industries and our future.
- John Sheridan, April 2014.
John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping businesses and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.
