Head for the Cloud
Last month Salesforce held its 14th annual Dreamforce event in San Francisco. It has become the largest software conference in the U.S. and is the second largest tech conference after CES. Launched in 2003 with just 1,000 people at the Westin St. Francis hotel, Dreamforce has grown to over 170,000 attendees. Its growth reflects the meteoric rise of cloud software in every market—and shows no signs of abating.
If you haven’t yet invested in the Cloud, there are plenty of reasons to consider making the move.
Here are five reasons, with an emphasis from my vantage point on cloud-billing services:
1. Cheaper to deploy and operate
From a cost perspective, the Cloud offers a competitive advantage.
On-premises solutions require a large up-front capital investment to purchase and deploy— often in the eight-digit price range. On top of that, both annual maintenance and hardware maintenance plus the required can tack on millions. Since on-prem hardware is sized for peak processing and growth, companies can end up with (and pay for) lots of idle capacity. Not to mention the costs of replacing the servers every five years or so when they reach obsolescence.
With a cloud-based service costs are based on a pay-as-you-go and grow model, allowing you to pay only for the capacity you use and anticipate using. Up-front costs are typically limited to configuring and connecting the solution to your environment. As such, the total cost of ownership of a cloud service is often markedly lower than on-premises.
2. Speed and agility for competitive advantage
On-premises billing solutions frequently come with extra baggage. Deployment can take years. But if you’re experiencing market disruption, you don’t have that kind of time. In fact, MGI Research forecasts that go-to-market speeds will increase substantially by 2020.
Unfortunately, things don’t get much better once an on-premises system is deployed. Once in place, changes like adding capacity, installing version upgrades, and making patches are all time-consuming processes. Contrast that with cloud-based solutions, where deployment timelines are often measured in weeks, scaling is transparent, and patches occur in the background.
With many big-box solutions, even simple changes can become complex, requiring long lead times and intervention from IT resources. In contrast, cloud billing software like ours is user-configurable through easy-to-use interfaces to support instant changes.
In the digital age, profits are skyrocketing through the sales of recurring services, which are replacing one and done solutions. These services can be easily bundled, repackaged or repriced. When playing the services game, you’ll need the agility to get to market quickly with new offerings that differentiate you from your competitors. This added agility can mean the difference between getting to market first and getting beat to the punch with disruptive new services.
3. Unlimited scalability
By its nature, a cloud-based, multi-tenant SaaS solution is highly scalable. You use and pay for the capacity you need with the vendor managing performance across the environment. Scaling up and down is transparent, and the balancing act moves to the vendor who shares their capacity for the benefit of all its customers. Your business offloads the responsibility and risk while meeting peak processing and growth requirements.
With an on-premises solution, you initially purchase and configure hardware capacity to meet peak processing needs, while adding enough spare capacity to support short-term growth. As you grow, you’ll need to purchase more hardware. It’s a constant balancing act, weighing the additional capital and operating costs associated with scaling hardware against the business risk of running short on capacity.
4. High availability
According to a recent IDC analyst report, the mean cost of downtime is roughly $1.7 million USD per hour, with some outages approaching $10 million USD. In a 24/7 services-oriented environment, billing becomes a hub of business activity. You can’t afford for your system to be down for any length of time. But what happens if there is a power outage at your data center? Will your on-premises billing solution go down? What if a disk drive or controller fails? How do you maintain recovery point and recovery time objectives that make those failures transparent to your customers?
Planning for contingencies requires a huge time investment, let alone implementing and maintaining the plan. In a cloud-based solution, your vendor has all that covered. Multi-site failover and recovery are standard features that offer near-zero time to restoration and zero data loss. This isn’t something you pay extra for—it’s baked into the price already.
5. Enabling strategic focus
Unless you’re a billing company, billing is not the sweet spot for your business. Yet, many companies tie up critical IT resources in billing (and other areas) that could be better used elsewhere to grow the business. The Cloud frees up those resources.
The Cloud is particularly attractive to those seeking billing solutions for rapid product deployment. Enterprises of all sizes and verticals are leveraging the Cloud to increase efficiency and ROI.
For all these reasons and more, the rush to the Cloud is on. Whether you are looking at updating your billing or other backend solution, there’s no better time to consider the Cloud!
Next up I’ll take a look at how cloud technology can pay off in spades – leading to happy customers and corporate nirvana: predictive recurring revenue.
By Tom Dibble, President & CEO, Aria Systems