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Five worst cloud decisions businesses could make

In some ways the IT industry is like fashion with a reliance on impulsive vanity purchases: here are five of the worst

Woman shopping online

Most of us have made bad impulsive purchases. Maybe it was an ill-advised tee-shirt, maybe those awful shoes: the fashion industry has lots to answer for. But when it comes to trends and rash purchases, the IT industry has been likened to a fashion industry. Here’s five similarities between clouds and couture and some pointers on steps you can take to protect yourself.

Cynical pushers

In a way, the sales cycle for cloud software is similar to something a super model might buy. Initially, the product is given away free or for a very low introductory offer. The easy terms and friendly delivery are intended to get the user dependent first, and then hooked. Pretty soon, they are mortgaging everything in order to pay back debts they never realised they were running up. (not to dissimilar to the narcotics trade).

Adam Thornton, director of vendor solutions at cloud service provider Bytes, has a gentler metaphor for cloud sales. “It’s the land and expand model,” says Thornton. The sales and marketing departments of any company are the most likely to fall for this scheme, he says. “Marketing and sales are always the biggest headache for the IT department and customer relationship management systems are now their favourite purchase on the cloud,” says Thornton.

Must-have Outfits

Salesforce.com is the must-have fashion item that no sales and marketing person can ignore. A few people will install it in the sales department, but soon everyone wants it – other departments, customers, suppliers, everyone. Pretty soon, it’s one of those obligatory fashions you have to pretend to like or be alienated. “Look how intuitive it is, they’ll say,” says Thornton, “and then, all the add-on applications for Salesforce start arriving.”  Soon our licensing costs are out of sie and out of control.

What’s the answer? How do you stop both data and licence fees from leaking out the company? The cloud giveth, but the cloud can also taketh away, says Thornton. “There are cloud tools that make it easier to control and manage the apps that are appearing across your network.” You could hire a service provider to monitor and manage the apps that are appearing on your network, find out who is using them and which people actually justify having a license.

Bytes offers software asset management as a service, by white labeling a management system from Snow Software. 

Vanity purchases

Salesforce isn’t the only outfit that makes people take leave of their senses. Adobe’s is one of five fashionable labels that people love to own but rarely use. They’re the equivalent of coffee table purchases.

Adobe’s Creative Suite is a prime example, according to Mark Flynn, Snow Software’s MD. Others are Microsoft Office 365 and Dynamics. Anything to do with video (be it conferencing or editing) is popular too.

These are all packages people would love to be able to master – in the same way that many of us would love to learn Italian but never get around to doing it. In engineering, there are many unused versions of CAD/CAM applications too, says Flynn, although that is often a product of bad version control rather than vanity.

Nevertheless, all those unused software purchases should be rooted out and either cancelled or donated to someone that can use them. Platforms like Snow can give you a report on all the available licences, who owns them and whether they have used them. One company got into a situation where it had multiple versions of the same software and, after using an asset management system, trimmed its expenditure from 500 to 400 licences.

The situation is about to get worse, Adobe is now concentrating on the cloud so keeping tabs on licences won’t be an option in future. “As Adobe goes into the cloud people will have to watch it like a hawk,” says Flynn. “People frequently insist on the full suite, but our analysis shows that most only need a smaller range of apps.” Few people need web design apps, but we all like to think we could use it.

The wrong size – take it back

Similarly, Microsoft Office is another cause of waste. Most users only use Powerpoint, Word and Excel but many demand the full Office Professional Plus.

The best way to tackle this is to appeal to people’s better nature, says Flynn. Put reward schemes in place for those who give up their unwanted fashion mistakes. Declare an amnesty or announce a Transfer Window (depending on your company culture) during which people can re-apportion their licences. Snow claims that it can save a client £250 per device.

It’s not just the range of packages, it’s the licensing of computing resources that catches people out. Few people understand how the virtualisation of servers works, says Martin Prendergast, CEO of Concorde Solutions and a board member at The Cloud Industry Forum:

If the man in the marketing department has been spinning up virtual servers for his customer database, he is probably oblivious to the fact that SQL Server licenses are charged per processor. They might not appreciate the fact that tweaks when the database is running slow, such as spinning up an extra server, are priming a slow fuse for a cost time bomb.

“Check your terms and conditions like they’re your mortgage application,” says Prendergast. There are hidden cost time bombs that Ryan Air might be proud of. “These can easily be avoided through scenario planning before you invest in new software. Work out the future licensing requirements both before and after the change, helping them to reduce overall costs in the long run, says Prendergast.

Cyclical trends

Just as hemlines supposedly rise and fall with economic fortunes (with mini skirts indicating boom years, and long skirts a hallmark of economic depression), so does IT management have its own ebbs and tides. One decade centralised control is all the rage, the next we’re all dancing to the tune of department managers and the poor IT manager (or CIO or department head) has become marginalised.

For example, virtualisation went out with flared trousers but it’s back in vogue now. Naturally, the original MVS design for the mainframe has been updated and accessorised for the more modern mobile metrosexual on the cloud.

Though drop it and run product delivery was common when mainframes were new, it is still around today, says David Bradshaw, cloud services research manager for IDC. Sales teams ought to develop long term relationships, not ‘big wins’, says Bradshaw.

The big question cloud buyers should ask is: will subscriptions for on-premise software cost users more than license plus maintenance over the long term? “Vendors clearly expect that users will spend at least the same with them if not more than in the old model,” says Bradshaw. “IT managers need to be more vigilant about not paying for products that they no longer use, they should be able to reduce their overall software spend,” he says.

But, he asks, can they?

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