It’s been a while since many businesses started jumping into cloud computing. A few years maybe, which is an eternity in the technology world. So, how’s it going with that? Are you seeing all the benefits and rewards you were promised? In today’s episode, we take a look at a few steps you can take to evaluate your cloud portfolio and assess if it is still working for your business. Should you scale back or use it more? Maybe, there is a happy middle ground that makes sense. So let’s go over some of the factors you need to consider and let’s see if this episode can lead to some decisions on your cloud usage.

I remember from less than a decade ago how everywhere you looked someone was saying that cloud computing was going to change the IT landscape forever, and it did. Many of those same people also said that IT would no longer be needed because this cloud-based self-service model would mean we don’t need specialized, skilled IT professionals. That was proven wrong fairly quickly. What these pundits failed to acknowledge is that software can be complex, especially software that runs your business and that keeps you connected to your customers and clients. Whether you buy software and have to install it on your computer or servers or whether you are using a web browser-based version of the same software, nothing changes in the functionality you need to use. The sales software needs to do the same thing as always. ERP software needs to do the same thing. The process for onboarding complex software doesn’t change if you are using it in the cloud or on-premise. Same goes for training on that software. What about integration with your workflows? All of this process remains firmly in place with the cloud. Maybe it’s a bit easier to get the service. But it’s inherent value is still the same, regardless of how it is deployed.

I will tell you what has changed though. Security. More specifically, awareness and paranoia around the security of your data. More and more properties are being attacked today. In the cloud, a third party company that you have to inherently *trust* is home to your data. Is it in the US? Europe? Asia? What protective measures are in place? What laws apply? What is their incident reporting policy? What if they go out of business? At least with on-premise software and you are in control of the data. If the vendor gets hacked, then so do you and likely everyone else who is their customer. In today’s cybersecurity climate, this is a significant question you need to consider as part of your risk calculation.

If they do go out of business, what happens to *your* business? Do you have a copy of the data in any form that is usable. Even if they do backups, it doesn’t mean you can access them. A good example is Google G Suite, now called Google Workspaces. We have a client who had setup Google for email a while back. One day an employee was let go and managed to delete all their email before leaving the office. They hadn’t done any backups since they figured it was Google, they must have backups, and they do. They just don’t make them available to their customers. It’s for internal use. They do offer a paid backup service, but unless you enable and pay for it in advance, it can’t help you in a pinch. With cloud, you are renting space, applications, data storage, etc. You are not in control. Now, that could be just fine for your business. You have assessed the risk and likelihood and you are comfortable that if they go out of business or your data gets lost or stolen, that you can recover from that because you have a plan. If you can’t and the risk is too high for your taste, it might not be worth the convenience of cloud for that application. The takeaway here is that you need to do your due diligence when it comes to mission-critical applications and data. Ask questions. Have a discussion with IT and your cloud reps. If they can’t give you the warm and fuzzies about your data and uptime and future stability, you might need to consider an alternative approach.

The other talking point we heard a lot about with cloud computing was cost savings. Oh my, your accountants and finance people were going to love all the money you were going to save by going to the cloud. No more extra real estate for all the in-house equipment. No more added A/C and electricity costs. Not to mention the IT employees or consultants needed to set it up and maintain it. What a financial coup. Well, not exactly. This falls into the “it depends” category.

When I was thinking about the points to talk about in this episode, I was going to carry on with a detailed real-life example of costs and breakdowns and comparisons. I realized that this wouldn’t really be helpful. Every situation is different and costs can be so different for all sorts of reasons. The main point I want to get across is that you should do some basic math about your costs to help you determine if you are truly saving over an alternative approach. Cloud has often been touted as a way to save a lot of money. In the long term though, that may not pan out compared to paying once for software. Of course, you have to take all the factors into account, but the goal is to come up with a year 1, year 2, year 3, and so on cost. Does that macro view show that you are spending more or less money than with the equivalent on-premise solution? Keep in mind, you are paying in full every year for cloud, it doesn’t stop. With on-premise, you have other costs, but they may not outweigh the cost of the cloud service. My point here is to do the comparison and make sure you look at the long term, not just the current year and see if it makes sense. The finances are a huge part of assessing your cloud strategy.

One final aspect to consider is your Internet connection. Is your cloud application mission critical? Can you sustain downtime if your Internet connection goes down? What is the threshold before you start losing your mind during an outage? Many areas have access to multiple Internet providers. You should consider getting a second line from a different vendor so that if one of the lines go down, you can still use the other line. It will cost a bit more, but likely less overall than the loss of going down completely for an extended period of time, whatever that may be for your business. You may need a good small business class firewall or router to handle the failover between providers, your IT should be able to help you out with that and it shouldn’t be cost-prohibitive equipment. Also, as 5G becomes more widely available and stable, it might be a good way to provide a backup Internet connection for your office. We’ll keep our ears to the ground and address that as the tech matures.

Finally, in the cases where you haven’t moved to the cloud at all and are still considering your options, everything I talked about today applies. These are all points to consider when deciding on a good cloud provider and seeing if the approach is financially viable. You are in a good position to compare the costs since you have your current costs readily available.

You should review your business’s cloud setup regularly. Annually is probably good enough, time it to be before annual renewals come around so you have time to pivot if necessary. Consider all the factors we just talked about and do some math and see if you are comfortable with what you are spending and see if there is a more cost-effective approach. Hybrid environments where you have some cloud solutions and some on-premise solutions are fairly common and strike a healthy balance with cost, efficiency, and value. I hope this was helpful and that you give this thought experiment a try for your business.