Cloud computing for the strata management industry.
Not long ago, when referring to web delivered software (or Software as a Service ("SaaS") as it was known back then) a paragraph describing the technology was required to introduce the reader to the concept. Fast forward to 2012 and that is no longer the case thanks to the creation of new terminology – "The Cloud". Apple has even gone so far as to use that terminology in their product description when they launched iCloud, Google is betting its entire future on the cloud with its Google Chrome web based operating system. And even the mighty Microsoft, cornerstone of the business software world is moving its most popular software suite, Microsoft Office, to the cloud with its new Office 360 product - the software giants have moved their focus to the cloud and leaving traditional software behind.
When thinking about "the cloud" it conjures up images of information beaming down to our computers from some magical, invisible computers in the sky. The reality however is much less scifi, you actually use cloud computing every day. Each time you check your Gmail account or use Facebook you are using software delivered over the internet.
So the cloud is just for social interaction and your "other" email account? Not even close!
You purchase and sync your music on iTunes; you store our documents on DropBox; you use Xero to run your corporate accounts; you do our banking online; Gmail runs your email; Facebook controls your social life; Outlook syncs your calendar to your Blackberry and you use Sales Force for your CRM. Not only do you use it every day, you actually rely on the cloud!
When, and more importantly WHY did this happen?
It happened because the cloud is reliable, scalable, convenient and affordable – and the big software companies know it. The cloud is now so commercially popular that more than 50% of all financial services, transportation, manufacturing and healthcare rely on web delivered applications.
The strata management industry is no exception. In fact many strata management companies around the world are already taking advantage of what the cloud has to offer.
The cloud's advantage
The cloud saves you money.
The cloud is more powerful.
The cloud is more reliable.
The cloud is accessible.
The cloud is more secure.
But the cloud is "online"? Yes. So are banks. So is your office. How secure are your firewalls? Cloud providers invest significantly each year ensuring their security services are up to date and secure. How much did you spend last year on your firewalls?
Security is one of the main objections to cloud based services, however the argument just isn't sound. The quality of security, both physical and digital, of cloud based services is such that replicating those standards in an office environment just wouldn't make commercial sense.
The fact is cloud providers give you access to data centre level security without the price tag.
The cloud saves you money
Saving money is what it's really all about. The other stuff gives us comfort, but when it comes to making a business decision the financial component makes or breaks a deal. So let's see how it stacks up in a strata management business.
Consider an established strata management business in Australia managing 2,000 units. As it is established we will assume the business already has computer workstations, phone lines, internet connections and all the normal technical equipment a business requires to operate.
On top of the standard business equipment this company also has the following servers to run their management software with a similar level of functionality to a cloud based system:
Application Server x 2
Email Server x 1
Exchange License x 1
Terminal Server x 1
Backup Server x 1
UPS x 1
The above represents the minimum requirement to operate the 2,000 units. An existing, operational business will already have this equipment, however what many companies fail to realise is that servers have an effective life of 5 years when hosted inside the controlled environment of a data centre. Server life significantly reduces when operating in an office environment with dust and temperature variations (like an office!). That means that in order to safely operate your own server environment you need to replace all of your equipment every 5 years (using a best case scenario).
When using a cloud solution, none of the above equipment is necessary, which means you don't need to go through the headache of replacing everything every five years.
Your servers have been running for 6 years and are fine? They may well be, until a hard drive fails. Then you will be offline while you replace the server and restore from your backups – which you hope are up to date.
Then there's the IT Support Agreement you will likely need to have with an IT company to help keep all those fancy servers operating. At $100 per hour, three hours per week, you are spending $14,400 each year just keeping the servers running (and this is very conservative).
So what about the strata management software itself, is that cheaper if you have your own servers? Nope. On average cloud based software costs the same and is sometimes even cheaper than its server based brothers.
The cloud saves you time
Backups (or the lack of)
People like the cloud.