Microsoft Joins in Praise Of Cloud-Based Solutions (Opinion)

For every dollar you spend on Microsoft software, you spend six-dollars “trying to get it to do anything,” according to Microsoft U.S. Enterprise and Partner Group corporate vice president Ron Markezich’s April 18 interview with Arik Hesseldahl of All Things Digital, a website devoted to news, analysis and opinion on technology, the Internet and media.

Markezich refers to the six-dollar spend as “non-value added.”  That’s a fancy way of saying you don’t get anything for what you pay for. Yet most of the small and mid-sized businesses in the U.S. ride the wave of Microsoft software.

 In the same interview, Markezich proudly points out that Microsoft customers moving to cloud-based versions of its office-related software products see savings of 30 to 50 percent. According to Markezich, “every customer loves the cloud.”

I’m pretty certain Markezich hasn’t heard from “every customer.” Most small and mid-sized businesses (SMBs) I visit with are hesitant to move forward to any great extent with cloud computing.

Why is this?

To start with, most SMBs have little knowledge of what technology is costing their business. Many view cost as simply the initial price paid for software and hardware. Little attention is given to the ongoing cost of care of the hardware and software running in their “back room.”

Move the subject from “back room” technology to business software and SMBs tend to have even less realization of what technology may be costing them.

Poorly fitting business software leads to excess staffing to overcome deficiencies. Reliance on internal programming staff or staff-created Microsoft Excel spreadsheets leads to issues regarding both timing and quality of business transactions and reports.

Cash flow issues tend to follow. Invoices go out late, or in some cases, not at all. Credit and accounts receivables are poorly administered. Bills may be paid much earlier than necessary, or lost in the shuffle, leading to expensive penalties.

Many SMBs have a strong, almost emotional, attachment to the current hardware and software environment that hinders change.

While there is an element of fear — the devil we know versus the devil we don’t — in play, the question is larger than moving to a new technology environment.

The question becomes, “How will this affect my people?”

Management has a strong reluctance to upsetting existing staff. As Bill Cosby once said, “Fathers are not interested in justice, just quiet.”

Likewise, owners do not enjoy upsetting their staff with change.

The fact is most businesses do not stay status quo. Businesses change and grow. Transaction counts increase. Cash flow situations change. The ability of staff to track, report and manage the business using the existing technology infrastructure not only becomes challenged, but also can reach the point of being practically impossible.

Once that point is reached, staff tends to want to change “NOW!” Chances are good they have been requesting it for a while.

Unfortunately, changing the underlying technology of a business takes time. Once it is realized that there is no “quick fix,” many businesses tend to throw more money at the existing technology infrastructure and add staff to attempt a “quick fix.”

Rather than “putting down the shovel,” cost and frustration grow.

How does adopting cloud computing help? Transitioning to cloud-based software has many advantages.

“Time to solution” is much faster. Sign the contract and the software is immediately available for implementation. The “pay-as-you-go” model minimizes up-front cash investment required.

Cloud-based software is more economical in total cost of ownership versus on-premise software. Most of the hardware and software in the “back room” can be eliminated along with the money spent regularly to take care of it.

Cloud-based software solutions, such as NetSuite, are very robust. Staff can be optimized and most Excel-based systems eliminated. The wish list of functionality of most businesses tends to be delivered in the base software.

There is money to be saved and quality to be gained today in adopting cloud-based software. If you don’t believe me, just ask Microsoft. 

Steven Hankins is CEO and co-founder of Accio.US, a technology company providing advisory and management services for small- to medium-sized businesses. He can be reached at [email protected].