Why Technology as a Service

Think fast. What do you get when you combine rapidly industrializing business models, the consumerization of IT and a global economy that’s slowly emerging from the worst recession in eight decades? In a growing number of enterprises these days, the answer is “an unprecedented opportunity.” The fact is that there has never been a better time to redefine traditional ideas about how in-house Information Technology (IT) organizations should look and work.

It’s not that these enterprises are anticipating no longer needing IT. Far from it, as these Gartner predictions [1] illustrate:

• By 2013, 80% of businesses will support a workforce that uses tablets.
• By 2014, 90% of organizations will support corporate applications on personal devices.
• By 2015, information-smart businesses will increase recognized IT spending per head by 60%.

But take a quick look at current IT spending, and it’s easy to see why so many enterprises are eager for change. According to recent Gartner analysis [2], infrastructure and operations accounts for approximately:

• 60% of IT spending worldwide.
• 50% of the total enterprise IT headcount.

In today’s financial and competitive landscape, it makes no sense to invest so heavily in keeping the lights on. That’s why more and more IT leaders are relying on Technology as a Service to help them redirect these resources to focus more on business results and less on infrastructure. Technology as a Service is a strategic sourcing model that enables enterprises to look beyond the technology they have and provide access to the capabilities they need —scaling up and down instantly.

Here are just three of many financial reasons Technology as a Service is an attractive alternative to IT investments for many organizations today.

Technology as a Service:

• Preserves capital and protects cash flow
  There are no up-front costs. Payments are predictable and spread out over a predetermined time. No residual or balloon payments are required.
  
  
• Reduces the risk of obsolescence
  Regular technology refreshes are included.
  
  
• Creates tax advantage
  Technology as a Service is considered an operating expense and qualifies as an “off balance sheet transaction” so payments are tax deductible. Even better, when the money an organization doesn’t have to spend on technology is instead used for investment, the after-tax interest on this cash is “found money.” That said, please keep in mind to speak with a tax professional to get an up-to-the-minute perspective on any laws and regulations that may apply.

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[1] “Gartner’s Top Predictions for IT Organizations and Users, 2011 and
Beyond: IT’s Growing Transparency,” November 2010.
[2] "Ten Key Actions to Reduce IT Infrastructure and Operations Cost," Gartner White Paper, Jay Pulz, July 13, 2011.

Clearing Up the Mystery of the Cloud

Confused about the cloud? You are not alone. In a recent study of consumer awareness in the US [1]:

• 78% of respondents said they were unfamiliar with cloud computing.
• 76% of these same participants reported using an Internet-based (read: cloud-based) service such as Facebook, Gmail, Flickr, etc. within the past 12 months.

When you think about it, the disconnect makes sense. These days all kinds of professionals are weighing in on what the cloud is and does. Marketers, environmental activists, financial gurus -- everybody’s getting into the act. Especially technology analysts, as you can see below.

The technology analysts’ view of the cloud
According to technology watchers at IDC [2]:

• In 2010, U.S. firms paid $21.5 billion to make the move to cloud services,
• By 2015 this figure is expected to grow to $72.9 billion

The majority (71%) of technology experts and social analysts participating in a joint survey conducted by Pew Internet & American Life/Elon University believe that by 2020 [3]:

• Most people will access software applications online and share and access information through remote server networks, not personal computers.
• Clouds will be more common than desktops.
• Most users will perform most computing and communicating activities through connections to servers operated by outside firms.

With so many differing points-of-view in play, some inconsistencies in terms are inevitable. At brightstack, we believe the cloud is what it does. In other words, the cloud is wicked fast and flexible. That’s why we use it to deliver our Technology as a Service offerings. Here’s a quick look at how the cloud supports each.

• Private Cloud-enabled Technology as a Service
  Why tie your precious cash flow up, or skew the debt-to-income ratio of your balance sheet? brightstack’s Private Cloud-enabled Technology as a Service provides on-demand remote access to a private, dedicated network of cutting-edge, business critical desktop, server and storage technology on demand. Maintenance and upgrades are included, all for one predictable monthly charge. That means no more worries about depreciation or obsolescence. Need to add or remove users or capacity? No problem, we’ll adjust the fee accordingly. Long story short: you never have to settle for less, or pay for more than you can actually use.
  
  
• Shared Cloud-enabled Technology as a Service
  Many routine operations such as email, email filtering and data storage do not require the high-capacity, secure technology found in brightstack’s Private Cloud-enabled networks. For these tasks, we offer on-demand remote access to a shared network of dependable technology workhorses for one low monthly fee.

Bears, Bees and Best Practices
So how do you figure out what which processes and activities go where? Many brightstack clients have found it helpful to think of our Private Cloud-enabled option as a cave and the Shared Cloud-enabled option as a beehive. Like a cave, Private Cloud-enabled Technology as a Service provides privacy and protection. You pay more because these resources are dedicated solely to your needs. Conversely, the Shared Cloud-enabled option works like a beehive. It allows many organizations to work with the same resources at the same time and pay less. Either way the equipment is owned and maintained by brightstack, and housed in our state-of-the-art datacenter. As a result, you get a tax break, a smaller footprint, and a giant step closer to financial and environmental sustainability.

Based on years of experience, brightstack recommends that clients plan to meet approximately 75% of their computing needs via our Private Cloud-Enabled Technology as a Service at first. Generally this ratio shifts over time. Of course every organization’s mission and goals are unique. Give me a call and let’s talk about what you need technology to do and how brightstack can help.
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[1] NPD's "Digital Software and the Cloud Report," derived from an online survey to a representative sample of 1,822
[2] IDC Study: Cloud is the Future, Gabriel Leung, 06-Sep-2011.
[3] The 2010 Pew Internet & American Life/Elon University Future of the Internet Survey