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If there is anything that we have learned during the 2020 spring, summer and autumn of Covid19, is that we need more than ever to be embracing the cloud. Our applications are best delivered for the most part in a browser so we have access potentially everywhere we have the connectivity.
Off-line mobile still I feel needs to be including in the mix. This is being proven by certain notable suppliers, who have for years tried to convince me that browsers will do it all, now belatedly doing some offline mobile too.
The key to all this, is that data is best hosted in the Cloud, not on-premise. OBV’s data in the cloud can potentially be better accessed wherever our staff are working. They don’t need to be at a physical location, or staff no longer being tied to a particular PC/workstation with a client-server installed. I have been seeing for over a year, clients of mine mandating ‘Cloud First’, particularly councils, which is a significant shift. I have always said that hardware and infrastructure teams, have been very much like turkeys. That is never keen to vote for Christmas.
Within Social Housing, the key integrated solutions are either browser delivered, or playing catchup to achieve that. Some playing better and faster than others. Suppliers left behind surely are vulnerable to aggressive takeover, with inevitable uncertainty for current customers.
Once solutions are in a browser, the obvious move then is to offer a full SaaS product with hosting bundled in. With my old dark side supplier head on, from ten years ago, why would you not?
Well, I attended an account management meeting a few months back, where migration paths were discussed. My client was keen to migrate to a new version, into the cloud, reducing the usual on-premise concerns. You know, backups, resilience, patching, upgrading the SAN when more storage needed etc. Something strange came over in the conversation, which was that the cost of the available cloud option, meant that some customers, were reconsidering installing browser based presentation, but keep it on-premise.
Now I recognise that utilising the Cloud brings with it lots of benefits, which would in a ROI justification, would be offset costs against staff time or a likely fraction of a FTA (Full Time Equivalent). Clearly in this case, cloud hosting costs could be excessive, hence it was creating a barrier to an easy decision to move from on-premise. Clearly, organisations particularly smaller ones under 5,000 homes, may have difficulty justifying cloud costs.
Looking back in time, hardware such as servers etc used to have good margins. 20%+ was not unusual, yet now ‘the tin’, as people in the sector might call it, is just commodity. A sixteen terabyte SAN is close to just a £grand. Most UK kit these days comes from just 4 or 5 key suppliers, Dell, HP, Lenovo etc, down from maybe 20 choices, including regional independents. Margins now are wafer thin.
A great deal of cloud storage these days is provided by a cluster of mostly reliable third party independents, plus AWS (Amazon web services), Microsoft, Google etc. The latter have advantages of benefits of scale. Margins around cloud can be in the same ballpark as where traditional hardware was 15 years ago. I would guess a shakeout is needed, in order to make cloud more economical and is almost certain to come. No doubt some of the less nimble hosting providers will fall by the wayside and commercially call it a day.
Software suppliers need to quickly find ways to reduce the costs of the cloud storage component of their offerings, otherwise Social Housing organisations will fall short on the potential transformation and hold back on full beneficial cloud adoption. Getting it embraced sooner, rather than later will free more end users from Citrix gateways, remote desktops etc, so we can be really in the 2020’s and prepare for the new normal.
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Paul Weller – Above The clouds.
(c) Tony Smith, Acutance Consulting www.acutanceconsulting.co.uk 07854-655009
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