Written by Stuart James, Channel Development Manager, Timico – an independent managed service provider
A cloud solution can create long-term cost savings, especially for a business which has integrated IT solutions; so in short, yes there is a silver lining. However, for manufacturers more than most industries, there are many variables to consider first.
Within a manufacturing environment, IT tends to be divided into two key sections -which operate completely independently. Firstly, there are the general applications such as email, databases, payroll and order processing functions found in any business. These, if delivered via a network, are highly suited for cloud solutions.
Second is the specialist software that runs bespoke plant and processing equipment and control output. These are not so well-matched to hosted cloud solutions as they normally require local connectivity to offer the required performance levels. However, they could benefit from disaster recovery solutions with replication off site – so if, for example, an on-premise server fails; an emergency back-up can be immediately made available.
In some cases, rather than creating cost savings, complexity and confusion around the cloud can lead to additional costs. Misleading claims from traditional technology vendors to cash in on the cloud phenomena can lead to businesses being mis-sold the right solutions. Many claim that cloud solutions removes outlay from the capital expenditure budget leading to savings through operational expenditure. However, it is not easy to show the full reductions in total cost of ownership as factoring in savings from ease of management and the increased efficiencies it affords make it harder to place a figure upon. Cloud is not about cost, it is about flexibility, flexibility leads to efficiency and efficiency leads to savings.
It is rare to see huge cost savings up front as the initial outlay of an on-premise server is roughly the same as a cloud contract; however it is more about the efficiencies, ongoing maintenance, upgrades and back-up capabilities. Upfront costs can be monitored and accounted for, whereas monthly operational costs can be unpredictable and unexpected.
Cloud is a new phenomena, but the technology it has developed from is not. It is a mis-education that it’s all new and everyone is still learning, so warning bells should sound if a provider tells you this. Virtualisation has been around since the 1960s and outsourcing IT to a hosted environment has been utilised by the likes of the Ministry of Defence and the NHS for a long time. All the elements that make up the “Cloud” are now far cheaper, faster and more widely available than ever before. So, it isn’t new and it can be a false economy to buy cheaper solutions from inexperienced providers lacking networking and hosting knowledge.
Getting it wrong can be costly, both in terms of finance and reputation, as demonstrated by high profile cases such as Amazon and Google. It is also the main reason companies are hesitant in embracing Cloud Technology.
IT managers fear losing control, manufacturers fear loss of production, so IT managers within manufacturing are doubly cautious to interfere with existing systems. It is essential that you select a provider that gives you complete control - you must have full flexibility around what you are moving over, what you need to control and only relinquish management control when you have a found a supplier you trust.
For manufacturers, cloud is exciting. Deployed correctly through the right supplier businesses can enjoy levels of ease and agility that make using technology easier than ever before. However, caveats apply and to help make the right decision for your business, consider:
- Moving to a hosted cloud environment? Engage with a professional provider to identify a correct solution and exactly plan your migration to the cloud
- Warranties on bespoke applications or manufacturer own software can become null and void if placed onto cloud platforms
- Mitigate risks by taking ownership of security and work with a provider who demonstrates capability
- Ensure your contracts work with your financing preferences
- If the risks outweigh the benefits, you are talking to the wrong provider.
For more information on Timico, or to read Stuart’s White Papers on Cloud Technology visit www.timico.co.uk