CFO of Extech Cloud Reveals why some companies are not offering cloud solutions

CFO of Extech Cloud Reveals why some companies are not offering cloud solutions

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Despite clear business benefits to be found in the Cloud, there are many businesses still not migrating. Alan Trace, CFO (Chief Financial Officer) of Extech Cloud, shares his thoughts on the reasons behind that.

Why aren’t businesses choosing the Cloud?

Through anecdotal evidence, we have become aware of some IT companies that are deliberately not offering Cloud IT solutions to customers in spite of the benefits. It’s not that businesses are being refused the option to migrate to the Cloud, it’s that they aren’t being encouraged, or offered the opportunity.

Some businesses are even being told that the software or function they require is not possible in the Cloud, but usually that’s untrue. The reason for this could be down to one of two things. Either the business is inexperienced and incapable, or they are deliberately delaying the move, to avoid losing out on profit.  Neither situation is acceptable.

In a way, however, this position is understandable. It is just not a profitable move for IT suppliers. For Extech Cloud for example, moving to the cloud resulted in a 30% dip in profits, which is not insignificant. The main reason for this is that previously we (and all IT providers) could sell products at whatever price we decided was appropriate, and therefore determine our profit. In the Cloud, Microsoft sets the retail process, which are in the public domain, so there’s no way to raise the price. Microsoft’s control of the prices is hampering some businesses.

So, why offer cloud solutions?

Operating fully in the Cloud is just the way forward. Whether we like it or not, Microsoft is in control.If they choose to stop offering support for certain products (such as Windows 7 or 10), and start only supporting cloud products, then we have no choice but to offer only cloud-based products going forward. Rather than waiting for that transformation to take hold, at Extech Cloud we decided to bite the bullet and futureproof our business, as well as the businesses of our clients.

We made the transition three years ago and it’s taken that long to settle and succeed. It can’t happen overnight for any IT provider.  Speaking as a CFO, I acknowledge that it can have devastating financial impact. However, phasing it in over three years allows the cashflow and model to work smoothly. Extech Cloud, for example, reengineered the business and invested in training and a team that can support businesses in their transition to the Cloud.

One of the positives for the IT provider and the client alike, is that Cloud IT systems are simply more reliable than using an on-prem server. This helps to minimise the number of things that can go wrong, and the number of support tickets raised, which can be managed by a smaller, more qualified and experienced support team.

How does the cloud work?

The unfortunate truth is that there is a mystique woven around the Cloud and IT in general. It’s a bit like the way many motorists don’t understand what goes on under their car bonnets. Most businesses have no idea where their data is actually being physically held when in the Cloud and that can be off-putting for some. However, in the same way you put your trust in a reputable garage, you have to find a trusted IT Cloud services supplier. We work with a trusted public data centre where our clients’ data is securely held.

The Financial benefits

From a finance perspective, moving the company spend on IT from CAPEX (buying all the kit / hardware outright) to OPEX (working on more of a rental / lease cost model) can make a great difference. One of the benefits being that you’re not hit with the need to update your server and hardware every three years. The associated benefit is that your IT infrastructure is always up to date. Going back to the car analogy, leasing a brand-new car rather than buying one, tends to be the financially viable option for many, because you don’t need to keep paying out for a new upgrade.

There are also cost savings on recruitment fees because an efficient IT system allows you to attract and retain better staff. Rooms previously set aside for a Comms room earning nothing for the business can be redeployed for a fee earning activity possibly negating a need for a costly move.

Expensive air conditioning in a Comms room can also be switched off. Insurance costs can also go down as there is no Computer Hardware to insure.

The Green Benefits

Less energy consumed on site. Less O2 polluting visits from your friendly IT engineer because there is no server to maintain and most problems can be serviced remotely.

What does Extech Cloud recommend?

Our recommendation is to find out for sure whether or not the the Cloud is the best solution for your business. One way to do that is with a feasibility study.  If you’re not satisfied with the advice given by your current IT provider, contact the expert team at Extech Cloud to book a no-obligation feasibility study and get a second opinion. It is sensible to double check before making any decisions, whether it’s possible and whether it’s the right decision to make for your business.

Find out whether transforming your business to the cloud is the right way to go. Contact Extech Cloud for a feasibility study or for more information today.