Web-based Services challenge Infrastructure Ownership

Posted 18 July 2013 by David Spratt

see-how-your-google-results-measure-up-with-google-grader-video--6b8bbb4b41Increasingly businesses are looking to the web to source IT service and infrastructure alternatives.  Nothing indicates this more clearly than Amazon’s change of venue announcement for their annual Web Services conference last month.  The company had to move its conference from the originally planned venue to the Aotea Centre in response to an unprecedented 2000+ registrations.

When you put this in the context of Google’s recent tripling of its free storage offer (from 5GB to 15GB) across cloud storage, Gmail and Google+ photos, the plot thickens.

Since Google launched Google Drive last year, it has put competitive pressure on other smaller cloud storage suppliers like DropBox and YouSendIt.  This trend is unlikely to reverse.

New ‘Infrastructure as a Service’ offerings from global players like Google, Amazon, Microsoft and RackSpace are challenging the more conventional options of owning storage infrastructure or out-sourcing to New Zealand-based providers.

It’s time for CIO’s and CFO’s to have a serious discussion around whether they continue to own infrastructure or even source from NZ providers using the traditional cost-up paradigm.  TUMG’s experience in the marketplace shows that owning server hardware can be up to ten times more costly than buying  ‘Infrastructure as a Service’ from Google+, Amazon Web Services or similar.

Out-sourcing storage infrastructure services to New Zealand-based companies can be up to 30 times more expensive than a global web-based solution provider.

Of course, to go the way of the cloud, you need to be able to stomach some risk.  With web-based services everything grinds to a halt if your internet service or connection goes down.  The best way for CFO’s and CIO’s to put this business risk into context is to use Eftpos NZ as a benchmark.

If Eftpos goes down, even for a very short time this directly impacts on their bottom line – both in terms of lost income and lost credibility.  Few businesses need 100% connectivity 24 hours a day, seven days a week like Eftpos.  So where is the risk threshold for your business?

If you want to explore your IT storage options, Total Utilitities Management Group can give you an unbiased assessment of the range of services available and how they fit with your business model.

For advice, call TUMG’s ICT associate David Spratt on 027 5749141

 

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