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All this hoo haa about whether your business IT should be “in the cloud” or “on premises” or half way in-between misses the point. It’s about what the benefits are in terms of savings or efficiency gains, not whether your IT equipment is strawberry or chocolate chip flavoured.

When you start a business or you lead a business of any appreciable size your goal is not to go out and invest in IT. IT is a necessary cost to your business that means you have to buy computers and software to equip your people with the tools to do their job. It’s no different to providing a truck driver with a vehicle, a safety vest and a hard hat: all needed to do the job in hand. What’s interesting in this analogy is that the truck – since the business presumably delivers stuff – is a cost to the business but the more efficiently it works (better fuel performance, less servicing etc) then the lower the costs to the business and therefore more profit. Ignoring speed limits for a moment, imagine if you could do more with that truck? If it could go faster, have less down time and maintenance, then any one in the haulage business would bite your hand off for this kind of cost saving and increase in efficiency

So it’s about how the business benefits. It’s not about whether the truck is “in the cloud” or “on the highway”. Does the business owner really care.

And that’s my point. Business leaders care about benefits – lowering costs, or increasing efficiency. And that is what cloud computing gets you.

A great example of this in practise is in a Dennis Howelett’s blog I recently read. (link here – Watch the video!) :

Among other things, he (Peter Campbell, CFO Mimecast) said that his company has been able to grow from 14 people to 250 without requiring an increase in IT headcount. Early on, the company decided that it would customize NetSuite for its own purposes ‘because they can.’ The company also took the decision to employ a person dedicated to running and adapting NetSuite. Key takeaways from the conversation:

  • The company was able to run with one IT person despite massive growth. They now employ three people running NetSuite and continue to expand its capabilities.
  • There were few problems in customizing the system which the company was able to do with minimal help from NetSuite.
  • The operational cost of running NetSuite continues to fall while ROI rises.
  • Providing local assurance for data protection issues has not been a problem.

Do these points amount to transformational benefit of the kind Phil Wainewright would recognize? I think so because the company has managed to effortlessly expand into new territories while maintaining a standardized system.

And that, my friends, is the real benefit. Scale IT but don’t increase your costs.

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