Cloud Matters: Is Your Company’s Future on the Line? Will a Cloud Mistake Cost Your Company Millions?

This is the first in a series of articles based on the popular Cloud Matters lecture series I’ve been giving to c-suite executives and their top staff at global Fortune 100, 500 and 1000 companies since 2012. These articles are for working pros at all levels and delivered without icing and sprinkles.

Whether your organization has moved, is moving, or wants to move to the cloud, odds are your management is congratulating themselves over all the money they are or will save now that they have or can fire all the IT staff, decommission all the servers, stop having to pay for so much tech training, etc. Just today, in fact, I saw another sky’s the limit graph in my LinkedIn feed showing the copious cloud savings for enterprises.

The graph showed a partially submerged iceberg. On the old school side of the graph, the iceberg was half out of the water, representing all the money enterprises were spending on IT staff, servers, training, etc. On the new school side of the graph, just a little tip of the iceberg was out of the water, representing all the money enterprises save when they move to the cloud by reducing staff, using someone else’s servers, etc. You know what my reaction to this was if you’ve ever been in one of my classrooms in the early days and seen me do a rolling on the floor belly laugh.

As a growing number of my clients have learned, moving to the cloud isn’t necessarily as cheap as Amazon, Google, VMWare and all those other companies would like you to believe. If it was, the dozens of professional cost-management companies designed to help enterprises save money on their cloud bills, like Cloudability, Cloudyn, CloudCruiser, CloudHealth, etc, wouldn’t exist. Clients in my lectures who were following along were getting these cost savings, and without having to give a 2 to 3 percent cloud-bill commission to a management company for the same. The others simply had money to spend that their shareholders didn’t really care about. (Yes, that's sarcasm.)

A growing number of clients are listening when I talk about not needing other managed cloud services either, like those from RackSpace, which recently laid off 6 percent of its workforce. As I’ve been telling my Cloud Matters clients, completely outsourcing the cloud or even parts of it to these management companies may not be in your enterprise's best long-term interest. There are many factors companies moving to the cloud don’t properly consider beforehand and these items, the ones the professional management companies won’t even speak of, can come back to bite you in the ass.
Something else I’ve also been telling my Cloud Matters clients: Getting rid of the experienced in-house IT staff that your company has spent countless years and dollars building is a very, very bad idea.

Contrary to what Amazon, Google, VMWare and all those other companies would like you to believe, the cloud doesn’t run itself. Your company really does still need good technical professionals after your cloud move. Your company really does still need to allocate dollars to IT training, recruitment and retention. In my lectures, I tell my clients where and how to reposition IT staff for the future that’s coming like a full-on freight train. After all, we are in the cloud infancy and when Cloud 1.0 passes over to Cloud 2.0, you want your company to be ready.

Fair warning, I also tell my clients: If you eliminate your in-house IT, you are going to regret it. At some point, the operations of your entire company may be on the line and you will need IT. A real world example:

Some of my clients moved entirely to Office 365 and Exchange Online without even considering what happens to company operations when Office 365, Exchange Online and other internet services aren’t available. Not because Microsoft or any other datacenter is out, but because some construction worker cut through your city’s Internet backbone lines accidentally, and guess what this didn’t just take down one Internet service provider in the area, it took down them all because there was no other backbone in your area and all the service providers used the same one. Now what? Do you tell 15,000 workers to go home until the problem is fixed in 2-3 business days?

Think this can’t happen? Think again. This scenario actually happened at a startup I worked at in Portland, Oregon. The company I worked at didn’t have thousands of workers, but other companies in the area did. So with your entire operations in the cloud how much would it cost your company to be unable to do business for 24 hours? 48 hours? 72 hours? $5 million? $10 million? $25 million?

Would it put your company out of business? It sure might. Have you planned a contingency? Do you even know who and what backbone providers are in your area? Now that your 100% cloud, is there any experienced IT staff in your organization left who can answer this important question for you right now or should your shareholders flood the exit gates?

Something to think about, and perhaps even, go check on right now.

This is cloud matters, part 1. If this strikes a chord with you, I hope you’ll follow, share and sign your company up for Cloud Matters.

Thank you for reading,

William Robert Stanek
williamstanek at aol.com

PS

Speaking of the cloud, if you’re using Office 365 and Exchange Online, I hope you’ll buy my books on these subjects.