Is ‘cloud envy’ clouding your business judgment?

Software vendors love it when you move to the cloud – its easy money for them, but it may not be so great for your business. Before moving to the cloud Elliot Cooper says owner managers must weigh up risk vs reward by asking the following four questions. 

There is a lot of publicity about accounting and other software moving into ‘the cloud’. This is held out to be the latest and greatest thing; the future if you like. 
It may surprise you to learn that the cloud does not suit every business. Avoid business pain and disruption by digging down into these four issues:

1. Cloud tortoise or cloud hare. 
Some businesses are amazed to find that even with a fast Internet connection, the slow speed of their cloud service means it takes forever to get things done. They have fibre Internet connections, yet using certain software in the cloud is painfully slow. This problem is a result of the physical location of the cloud software provider’s datacentre. In one case the datacentre was in the US, so the New Zealand connection was having to deal with a very high level of latency. To avoid frustration, choose a cloud service provider that strategically locates its datacentres to maximise cloud service speed for customers. (Sydney is a good choice because it’s the end point of the Southern Cross cable. Generally speaking I find New Zealand connections have even lower latency to a Sydney-based server than to servers located in New Zealand.) 
Of course, a cloud service can’t run any faster than your Internet connection. 

2. Which flavour of cloud best suits you. 
I’m a believer in the cloud, but it needs to be your flavour of cloud. Cloud comes in many forms - not just an SaaS model of software license. It can be that you rent rack space for your own servers; or you have virtual servers that are managed by a hosted service provider. These are both forms of cloud. All require an Internet connection and can be accessed from anywhere that you have Internet access. 
You can also adopt hybrid systems. This is where parts of your systems are moved to the cloud to add additional functionality, or to replace existing systems. Electronic Data Interchange can connect cloud components of the system to on-premises applications. 

3. Software roadmap. 
Functionality is king, whether on-premise or in the cloud. If you don’t get productivity improvements from your software then you’ll not have made the most of your investment. 
It’s OK to be an early adopter of cloud software that may not currently meet most or all of your requirements if you can see the roadmap going where you need it to be in a reasonable timeframe.

4. The timing of your move. 
A management plan to move your systems to the cloud is important. That plan needs to have a timeline that works within your business requirements for both software functionality and business disruption. The cloud plan may mean steps to virtualise your servers and have them looked after by a hosted service provider. Perhaps your server is coming up for replacement. Perhaps, as we saw in Christchurch, you need the security of having access to your data available in the event of a natural disaster. 
It’s important the cloud works for you, and not just for the software vendor. It is your business and it should be your solution.

Elliot Cooper is CEO, co-founder and executive director of listed company Enprise Group (NZAX: ENS). He’s a chartered accountant who has worked on many capital raises, as well as multiple trade sales totalling more than $50 million. 

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