Cloud Vs. On-premise. Identifying technology services best sourced from external providers and those best supplied from in-house resources

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1 Cloud Vs. On-premise Identifying technology services best sourced from external providers and those best supplied from in-house resources A Paralogic Networks Guide

2 Introduction One of the underlying reasons for the success of cloud-based IT services in recent years is the value proposition. As the effects of the credit crunch and the ensuing global economic recession have altered the operating environment for most businesses, the use of cloud technology has enabled businesses to ditch expensive in-house IT systems and move to online subscription services. This has reduced the need for CAPEX and shifted some of the costs of technology into operating budgets. Ultimately, as part of a range of cost cutting measures, this has helped many organisations to maintain profitability. For some applications, cost ratios between on-premise and online services may be as much as 5:1 in year 1, and significant savings continue to accrue over the life-cycle of a given system. With such beneficial financial advantages, it may seem difficult to fault a business strategy where the objective is to move all systems over to online services. However, eliminating all in-house IT servers, storage and their resident software services may be an unrealistic goal. The reason is simple: Removing all internal systems may not be the best way to meet the needs of the business. In the rush to cut costs, you may damage productivity and the ability of the business to respond to the needs of customers. So, what is the best way to maximise the value that technology delivers to your business while ensuring that technology meets the needs of the business? In this guide we consider the question of cloud versus on-premise technology. We look at key areas of business IT and identify those that are ideal for sourcing as online services and those better retained internally as on-premise. 1. Sever side productivity applications For many, some on-premise server-based productivity applications have acquired a reputation of being a nuisance. This reputation is a product of three key things: Cost - expensive hardware, software, licensing Maintenance - the need for in-house expertise to maintain the solution Importance - mission critical applications on which the business depends A good example of this is an in-house mail server like Microsoft Exchange. Moving over to online versions of nuisance, on-premise, server-side applications represents an easy win for virtually all businesses. Mail servers are an ideal first choice for moving to the cloud. The significant expense of mail server hardware and software, high maintenance requirement and the impact that results when the service is unavailable make the decision to source it as an online service a no-brainer. 2. security Distinct from productivity applications, server side utilities and applications are another area that should be considered. Anti-virus software is essential for safeguarding one the most vulnerable channels for cyber attack - . The proficient use of security software is essential if we are to protect our businesses from -borne threats. Many smaller and expanding companies do not have high level IT security expertise on staff.

3 Cloud-based scanning services are highly effective and reliable at identifying and eliminating spam and defending against malware such as viruses, spyware and ransomware. Provided and maintained by IT security experts, such services work in conjunction with either cloud or on-premise mail servers to ensure that the risk posed by the channel is minimised. 3. Desktop productivity applications The performance of desktop productivity applications is of critical importance because this directly impacts each individual s ability to execute their job role effectively and efficiently. Online applications may seem the best option when it comes to considering cost; there are less likely to be support issues for SaaS applications. However, online applications often suffer from reduced functionality and disappointing performance. Some productivity applications work very well online. Typically applications that require only low levels of bandwidth to transfer data from browsers to cloud-based hosts are the most effective. Typical here are applications built on databases, where the output is low-bandwidth data such as reporting from CRM packages. Salesforce.com is probably the most famous application of this type. Evaluate online versions of productivity suites to understand whether their limitations are acceptable to your business. When it comes to word processing, spreadsheets and presentations, office suites may leave something to be desired if you are a power user. Graphics applications such as CAD are generally unsuited to online use as they require lots of data to be transferred frequently. 4. Line-of-business applications Line-of-business (LoB) applications are software solutions that are designed to meet the needs of a common, specific area of business such as finance or sales, or aimed at a sector such as insurance, accountancy or recruitment. Another variation on LoB applications is Enterprise Resource Planning (ERP) which serves all the functional areas of a business. LoB applications tend to have high costs when installed on-premise resulting from the usual mix of server, storage and software; and licensing and maintenance costs. LoB applications are one of the key reasons why cloud technology has been so successful. They offer the ultimate in task specialisation, performance and flexibility. LoB software delivered online through the SaaS business model squashes costs. Typical LoB costs may be five times lower than an equivalent on-premise solution in year 1. As the application lifecycle unwinds over 3-5 years the total costs may be of the order of 30% lower than for an on-premise solution. 5. Disaster Recovery (DR) and back up The ability to recover form a disaster is largely dependent on one a single pivotal process: Back up. To ensure recovery after a disaster situation it is essential to have a reliable back up of all data. However, there are a number of barriers that help to give back up a nuisance reputation when performed as an on-premise IT function: Expensive hardware, lots of moving parts and susceptible to failure Frequently complex software, difficult to set up and understand errors Failed back ups introduce uncertainty into the DR process Expensive consumable media and offsite storage services

4 Online back up and DR provides a reliable solution to the problems of on-premise back up and DR. There are a number of ways to set up online back up and DR systems and the precise method and costs depends on the volume of data and the DR target recovery time and recovery point objectives (RTO and RPO). Data is duplicated offsite, and there is the option to mirror the offsite back up to a third site; the elimination of unreliable hardware, software and media as well as the costs of offsite media storage, collection and delivery, mean that the advantages of online back up and DR are truly compelling. 6. Hosted desktop services Within some organisations there is a need to provide consistent, high reliability performance on any computing device and in any location. An example of this is a business with a contact centre where operatives are working from remote locations to service a customer base. This may be a virtual contact centre where contact centre workers work remotely using personally owned devices. For such companies, a hosted desktop environment represents a good solution. It offers the ability to control what users are able to do and access, providing the functionality and performance to guarantee seamless customer service. Even if you are not running a virtual contact centre, a hosted desktop environment may still appeal to you. However, there are some points to note. Where there are a significant number of users at one location, hosted desktop solutions require good bandwidth to work successfully. Price is also an issue and you may find monthly costs a little expensive. Finally, in highly trusted jobs such as in professional services, there are strong motivational and cultural factors to allow workers to determine the shape, look and feel of their desktop environment. However, this may not be possible in a hosted desktop environment. 7. File and print services Moving file access and printing to the cloud may impact productivity because of latency factors. Latency is due to the bandwidth limitations of internet connections. Printing a graphics heavy file such as a PowerPoint presentation may generate an enormous amount of printer data which has to come through your internet connection. This may take some time forcing users to wait before files are printed. Latency results from technical issues related to bandwidth and network protocols, the digital language used to transport data between servers and computers. Simply put, what works over relatively short distances like those in a typical office local area network (LAN) do not translate well to the wide area network (WAN) created when a business moves file and print to the cloud. To eliminate latency-related file and print issues, there is a requirement for local on-premise resources for file and print services. Retaining on-premise file storage and a print server to handle the spool files is the best option for the majority of organisations. Putting file and print services online handicaps productivity, and creates a source of intense frustration when deadlines are short. Inevitably impacting productivity damages the ability of the business to service its customers.

5 8. Consult with an expert on cloud and on-premise solutions There are differing opinions on how best to provision cloud services. Some technology service providers are limited in experience or are influenced by vendor relationships. Sometimes this means that businesses do not receive the best, impartial advice when considering their options for moving from on-premise to cloud-based services. To avoid making poor decisions, you need the services of a technology partner you can trust. Benefit Essentially the needs of every business are different. To obtain the technology services you need, it is advisable to seek expert advice qualified by a successful track record of delivering cloud and onpremise solutions. Paralogic has the experience to help businesses of all types to achieve the right mix of online and onpremise services. Our experience enables us to provide brokerage of different cloud services and aggregate this with on-premise solutions and services to meet the precise needs of each client. About Paralogic Network s Established in 2002, Paralogic Network s is headquartered in Buckinghamshire. Our combination of cloud-based services, Help Desk Support and field-based people provide nationwide coverage, letting us make sure our clients stay up and running, no matter where they are located. Over the last 30 years businesses have become increasingly dependent on technology, driving demand for service flexibility and excellence. This trend continues to shape our approach to service. We recognise the differing needs of smaller (less than 25 user), expanding ( user) and midsized (100+ user) businesses. Our service driven ethos enables us to provide services appropriate to each customer s need, enabling the full benefit of technology to be obtained. You could describe us as an honest broker; on one side we partner with our clients because their IT is our business; on the other we maintain partnerships with leading technology vendors, keeping them in touch with the needs of our clients. We focus on delivering cost-effective, sustainable, innovative solutions and qualified, proven IT services. Clients across the UK value our professional services and benefit from implementing our solutions. For more information on Paralogic Network s get in touch: T: E: W: Front cover image: By Master isolated images from freedigitalphotos.net

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