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1 A DSG WHITE PAPER New to the Cloud? DSG s Guide to Cloud Accelerated Business Copyright All Rights Reserved. Demand Solutions Group.

2 The inherent simplicity and costeffectiveness of Cloud computing frees businesses from the need to build costly information technology infrastructures that add no value to their core activity and mission. But what is the Cloud and can it really accelerate your business? This DSG white paper will help you understand the Cloud and its impact and benefits to your organization. What the Cloud enables organizations to do is to take the money they have tied up in operational roles and costs and reinvest this in strategic roles and programs that support their mission. Loren Kutsco, former CIO, Food for the Hungry What Is The Cloud? The term Cloud was first applied to telecommunication networks in the 1990s but, as the Internet has become more and more pervasive in our business and personal lives, the term has spilled over into general computing jargon to where it has become interchangeable with the term Internet for many people. However, Cloud actually means something more specific than the Internet as it describes a cost and operating model, not just a technology. The Cloud provides the shared infrastructure, storage and computing power to support thousands of business applications from vendors such as Amazon, Microsoft, NetSuite, SAP and Salesforce.com. These mission critical applications in turn support hundreds of thousands of organizations and tens of millions of end-users worldwide. Fundamentally, the cost and operating model behind the Cloud is simple: just as you wouldn t build a power station to have heat and light in your building, why should you have to build a data center to be able to run applications? The Cloud takes computing to the utility level and makes computing power, communications bandwidth and applications available through a metered model much like water, gas, electricity or the phone. In this model, there are minimal up-front costs and the service provider recoups their cost by charging based on how much of their service you consume. At the technical level, the Cloud has been made possible by the latest generation of the Internet. In less than twenty years, the Internet has grown from a simple communications tool that most of us experienced through slow, unreliable dial-up modems to a high-powered global network that is robust, fast and secure enough for hundreds of millions of people to 2

3 use simultaneously. As the Internet scaled, more and more shared resources such as processing power and storage were made available, and the Internet was transformed from a simple communications tool into a computing platform capable of hosting and running complex applications. This shared computing platform is what most people mean when they talk about the Cloud. How Can The Cloud Accelerate My Business? The Cloud offers significant financial and operational benefits to business. At the financial level, it enables users to avoid capital expenditure on hardware, software and services and to pay Cloud-based infrastructure and application providers only for the resources or time that they use. After hundreds of successful Cloud based projects, DSG characterizes the financial benefits of the Cloud as follows: Total Cost of Ownership there is a plethora of Total Cost of Ownership (TCO) calculators available on the Internet, almost all pointing to Cloud solutions costing significantly less than comparable on-premise solutions. DSG regularly runs TCO analyses for prospective customers and they consistently show that a Cloud approach can save a medium-sized business 40-50% a year by, for example, reducing the need for skilled resources to manage their IT and applications infrastructure. Update Costs these are virtually eliminated by the Cloud because, instead of your business being responsible for installing and updating software and converting data between existing and new versions, the vendor is responsible for these activities and costs. Not only does this ensure that you are always on the latest available version, it also ensures that this happens without cost and disruption, and with minimal risk to your business. Energy Savings the Cloud represents the greenest computing option available to you. The sharing of resources in economically sized and energy-efficient data centers means reduced energy usage and carbon emissions and that benefits us all. For example, a study conducted by green solutions provider Greenspace concluded that the average NetSuite customer saves $10,300 a year compared to a similar on-premise application. That s both a financial and a green benefit. In addition to these financial benefits, DSG s customers report a significant number of operational benefits, including: Access Anywhere, Anytime because Cloud applications are accessed through a webbrowser, they are available whenever and wherever you have access to the web. This provides greater operational flexibility and enables work-from-home and collaborative or virtual teaming to become a reality. 3

4 Agility and Scalability the ability to add new applications, users, processing power, and storage to cope with, for example, seasonal peaks in transaction load or processing needs. Reliability all Cloud users benefit from the reliability that has been built into the Cloud in order to support the demanding business continuity needs of large commercial users. What s more, this reliability is contractually guaranteed through Service Level Agreements that can be set up to meet the needs of your Business. Security Cloud-based security will be as good, or better, than most businesses existing on-premise systems because Cloud vendors typically invest extensive resources on security issues that most businesses cannot justify. There is a third category of Cloud benefits that is important to understand as these help prevent a value-gap developing between the capability of your software and the evolving needs of your organization. For many organizations, when a new software version is released, the disruption of an upgrade is often seen to outweigh the benefits of staying up-to-date unless it contains a compelling new feature. Many businesses therefore choose not to update and fall behind the vendor s release cycle. They may face expensive or time-consuming upgrade processes or even risk becoming unsupported, putting their operations at significant risk in the event of a software or hardware crash. The Cloud addresses this issue in a comprehensive way because it puts the onus for keeping users on the latest version of the software on the vendor. As the developer of the application and as an IT-focused company with the funding to own and operate world-class data centers, the vendor is clearly better positioned to fulfill this role than an end-user organization. Putting this onus on the vendor not only reduces your maintenance costs, it also makes the vendor responsible for ensuring that any customizations that you have made to the software are supported in future versions. From the vendor s perspective, the Cloud model works best, both technically and financially, when all of their customers are on the latest version of their product and they are supporting a single set of user functionality and programs. There is another benefit to the Cloud model: it changes the business dynamic between the end-user company licensing the software and the software vendor. Instead of this being a one and done relationship as it is in the on-premise model, the Cloud business model is based on an annual subscription. This means that the software vendor has to perform continuously in order for their end-users to renew their subscription. In DSG s view, this transforms the vendor/end-user relationship from the adversarial on-premise one and done model to a better aligned, much more cooperative model. These factors combine to prevent a value-gap developing and provide a compelling reason why resource-constrained businesses should consider the Cloud as a way to ensure that their users are always running on the current, supported version of the software and always able to access the latest product features. 4

5 Summary The Cloud is the single most discussed business technology innovation since the advent of the Internet in the mid-90s. This DSG Whitepaper has answered the question what is the Cloud? and, more importantly, has described how leveraging the Cloud saves businesses significant operating costs, improves process agility and Cloud Accelerates their business. About DSG DSG delivers Cloud based business solutions based on leading ERP and CRM applications such as NetSuite and Salesforce. With our deep business and technology expertise and the experience gained in hundreds of successful projects, DSG is acknowledged as one of the leading Cloud business solutions providers by our major business partner, NetSuite, and by Cloud media and analysts such as IDC and CRN. Since 2005, hundreds of companies from startups to the Fortune 1000 have worked with DSG and our proven Realize, Optimize and Revitalize methodologies to implement tailored NetSuite and Salesforce solutions that, from day one, deliver value, insight and business acceleration. For more information, visit 5

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