Imagine if, over the course of your adult life, renting a home would actually save you more money than buying. Would you still make that huge down payment and fork over the cash for ongoing maintenance?
Would you pay for landscaping services, would you build an addition, or would you spend hours fixing a leaky pipe?
You would simply let your landlord shoulder the cost and find profitable ways to use your extra money and time.
In the business world, hosted (or “managed”) services are the equivalent to said renting utopia. Buying your own hardware is the equivalent to owning a home.
Thanks to the proliferation of cloud technology, you can outsource functions that aren’t part of your core business, and believe it or not, you can save money in the process.
Benefits of Hosted Solutions
In a hosted solutions relationship, you pay a vendor for use of their services (VoIP phone systems, for instance). They use their own cloud environment to host the service, and you pay a monthly subscription fee for their storage and services. There are several reasons to switch to hosted, or “managed,” services sooner than later.
Firstly, you probably don’t need to fund a huge IT department in your non-IT business. Especially if you’re a small to mid-sized business. When you outsource your communications, you are also outsourcing support and maintenance—it frees you up to pursue your core business functions.
Secondly, switching to managed services in the cloud is cheaper! This infographic, shared by Himawan Prajogo of Digitalist Mag, illustrates the costs perfectly:
When you host your own communications, you have to invest in your own hardware (both a huge upfront and on-going expenditure), pay experts to maintain it, and pay for elaborate security solutions. Outsourcing to the cloud removes those costs.
You only have to pay a subscription fee, and your vendor will maintain the infrastructure for you. More importantly, the vendor’s security and data storage will likely be better than anything you can create yourself. You can also take advantage of features like automatic data backups and ongoing software updates at no extra charge.
If the service you are paying for—VoIP again, for reference—requires hardware, your vendor will supply the phones and collect them when you unsubscribe.
You won’t have to worry about a mouse chewing through your cables or a hurricane erasing your data—all of your data is securely off-premise in the cloud.
Third, outsourcing to the cloud gives you the ability to scale infinitely. If you add another team member, simply pay a slightly increased fee to add them to your service. As your business grows, you can pay for incrementally more service, all without having to buy new servers and hardware. In short, you only pay for what you will use.
Practical Applications: Embracing the SaaS World
We’ve established that you’re better off eschewing your own hardware and letting a vendor manage your solutions—what are the various levels of cloud support, and how can you leverage them?
Infrastructure as a Service (IaaS)
An IaaS provider supplies you with a complete cloud computing infrastructure—this would include virtual machines and things like firewalls and IP addresses. IaaS providers will typically replace your need for on-site data centers, servers, and networking hardware. IaaS serves as the foundation to the cloud services pyramid, and if you need a cloud-based infrastructure solution, look into Amazon EC2, Rackspace, or Google Compute Engine.
Platform as a Service (PaaS)
If you already have an infrastructure in place, you can use Platform as a Service (PaaS) to develop and manage your own applications. Software developers can simply do what they are good at—write and deploy fantastic apps—and leave scalability and security to the platform provider.
Software as a Service (SaaS)
SaaS offers access to software that provides a specific service to the customer. The SaaS provider hosts the service, deals with bugs and support, and upgrades the software periodically. SaaS is the part of the cloud universe that small businesses owners are most likely to get involved with, and for good reason—popular cloud apps like Microsoft Office 365, Salesforce, Dropbox, Slack, WebEx, and more have revolutionized the way businesses function. You will most often pay for SaaS through a subscription model.
Unified Communications as a Service (UCaaS)
Unified Communications (UC) is an offshoot of the SaaS model that allows employees to access all of their business and communication apps through one portal. For instance, a team member who is at a conference can use one app on a mobile device to use messaging, Salesforce, Skype for business, email, chat, and more.
It’s Time – Make the Switch
Per the Wall Street Journal, pharma powerhouse Johnson & Johnson plans to move 85% of its software to the cloud by 2018. If a company that large can entrust its IT infrastructure to the cloud, you can too.
Your costs will decrease over time, your data will be more secure, you’ll save countless hours, and you can scale as quickly or slowly as your customer base demands. There’s never been a better time to invest in IaaS, PaaS, Saas, or UCaas.