“Not an actual cloud” and other myths about cloud

The Daily Mail recently came in for ridicule for including a purportedly helpful description of cloud services for its readers: “The moment you snap a photo with an iPhone, for instance, a copy is uploaded – not to an actual cloud – but to a bank of gigantic humming and whirring computers…”. Not to an actual cloud.

Although the ridicule was perhaps not misplaced – how many people really thought the cloud was an actual cloud? – there are certainly myths perpetuating the channel about what it is, how it works and what the benefits and pitfalls of reselling it can be. Cloud is an abused term but essentially describes the process of removing the requirement for businesses to own and manage hardware.

Here are five cloud myths that can be dismissed immediately:

1. Buyers: Data is safer on my own premises
Some businesses might be hesitant to store their data away from their own buildings. However, a good cloud provider will have all the physical security around the building and software security against cyber-threats the data needs, which may very well be more than the business could put in place by itself.

2. Resellers: It doesn’t matter where your data centres are located
Many would argue that if a hacker wants to access data remotely, it doesn’t matter where in the world the data or the hacker is. Although regulations focus on security of data, not the location of it, UK customers and partners want their data stored in the UK. It’s easy to make a case for locating data centres abroad, but if you will win business by storing data in the UK, it will prove a shrewd tactic.

3. Buyers: It’s cheaper to buy, for example, an Exchange licence than to use an Exchange server in the cloud
At face value, this seems not to be a buying myth; the initial outlay for a licence is indeed usually less than the cost of using a hosted Exchange server. However, hosting Exchange in-house becomes less of a bargain when you factor in the cost of server power consumption (and cooling), software updates and patches (and the expertise to identify and install them), the real estate required to house the hardware and any downtime. Figures from IDC suggest the average company will see a return on cloud investment within seven months.

4. Resellers: Selling servers rather than service is better for hitting quarterly sales targets
This is a common misconception among resellers, particularly at the end of a quarter with a target to meet. It can be tempting to push a £60k server and licence for the instant hit on the bottom line but a service contract with £40k up-front payment and ongoing £1,000 monthly income will be more profitable in the long run – and help meet subsequent quarterly targets too.

Further, as we have seen in myth 3 above, it may ultimately lead to disgruntled customers whose purchase didn’t turn out to be the bargain it seemed during that last week in March.

5. Resellers: Resellers can’t do cloud
Some resellers have experimented with offering cloud services but have given up when their efforts went unrewarded. In most such cases, the reseller has tried to create its own cloud service with no expert help. For example, one large system integrator started its own hosted Exchange service but quickly discovered it needed to establish a support desk, recruit a specialist administrator and implement solutions to take care of back-end billing every month. With fewer than 100,000 mailboxes, a reseller’s own hosted Exchange offering will likely not make money or justify the credit risk and migration complexity.

But this doesn’t mean resellers can’t do cloud at all; they simply need the right partner, whose products the resellers can sell by brand or white-label as their own product.

When cloud first came to the UK market as a service, the dominant players didn’t understand the UK’s channel or that the significant majority of sales come as a result of the relationship between buyer and seller. The facts are that data is typically more secure when it’s stored off-premises, and UK-based data centres are in demand. Resellers must be able to offer cloud-based services to meet this demand and generate long-term business that even exceeds income from hardware sales.

Businesses want cloud. Resellers must act now to work with cloud providers to get in on the action.