Like so many small businesses these days, Smiles By Pocock – an orthodontic clinic in North Vancouver – is becoming more and more reliant on computers.
Much of its equipment, like scanners and X-ray machines, is digital now, and computers now outnumber the clinic’s 12 employees.
“We’re completely reliant on our computers,” said Sharon Pocock, who manages the clinic for her husband Paul.
Like most small businesses, however, Smiles By Pocock is not big enough to warrant a full-time information technology staffer, so it outsources.
Ironically enough, the clinic has found that it is getting better service now from another small business than it did when it used the services of a larger IT company.
About a year ago, the clinic hired Dougan Consulting Group to handle its IT needs on an on-call basis. It’s not only cheaper, Pocock said, but she likes the fact that it’s always Des Dougan who shows up to fix problems and conduct routine maintenance, so he’s familiar with the company’s system and its needs.
“We were using companies that got too big, and then they weren’t giving us the service,” Pocock said. “They weren’t very hands-on, whereas Des is fabulous for that because he’s a small business. I think when a company gets too big it becomes less personal – and more expensive.”
Even some larger companies with their own IT staff are starting to outsource some of their their IT requirements, partly because so many are moving to the cloud, which can have huge cost benefits, but which in-house IT staff may not have the expertise to manage.
“The biggest issue that we see with small businesses, if they do have their own internal IT staff, typically they’re not very well trained,” said Ryan Sigouin, president of Basic IT Solutions in Surrey, which provides IT support for small businesses.
There are benefits to moving to the cloud, if done right, especially for a new business, because it avoids a lot of capital investments.
“The issue isn’t so much that it’s cheaper to move to the cloud – it’s just a different way of purchasing those services,” Sigouin said.
It’s a big upfront cost for a new small business to invest in servers, software and phone systems – all of which can now be hosted remotely through the cloud on a subscription basis.
In addition to avoiding a big initial outlay, it is also scalable. As the company grows, it just pays more for each new user, or less, if the company downsizes.
“We just went through an example of that, where they sold off a big chunk of the company,” Sigouin said. “They had a really expensive phone system in and we replaced that with a cloud-based system.”
A traditional landline phone system for business requires a private branch exchange (PBX) – a centralized server that connects all the company’s phones to an outside line.
Sigouin said it might typically cost a company $40,000 for the PBX and phone lines, plus a monthly charge of about $30 per user.
A cloud-based Internet phone system costs about $35 monthly per user, but there are fewer upfront costs. There are no phone lines to install, for example. Employees don’t even necessarily need desktop telephones. Sigouin’s own employees use wireless headsets and softphone system on their computers.
“If you take it over a five-year return on investment, you’re probably looking at 75% lower costs than a traditional phone line,” Sigouin said.
Moving to the cloud is not without its drawbacks, however, which is why it’s important to have an IT consultant that can tell you if it’s right for your business.
Drawbacks include privacy and security issues and bandwidth strain. And as some business are starting to find out, there can be hidden fees for cloud-based services like Microsoft’s Office 365 and Windows Azure.
Sigouin said it is relatively easy for someone to become approved as a Microsoft partner and
then sell subscription cloud-based services to other businesses without explaining all
of the licensing requirements
and fees.
“You have a lot of undereducated people going out and selling the cloud as a solution,” Sigouin said.
Some businesses that have bought products without understanding how the licensing works may suffer bill shock if they get audited by Microsoft, he said.
“There’s a whole bunch of licensing that goes behind you having the ability to remote into a cloud-based server,” Sigouin said. “All these things add up to over $1,000 per user in licensing costs, and those things right now are not being licensed properly.”
Another problem with the cloud is bandwidth. As more companies move to the cloud, they may find their Internet service becoming less adequate because there is more data moving through Internet lines that are – metaphorically speaking – like funnels: designed to allow lots of data to flow in, but not so much to flow out.
Although Internet service providers (ISPs) have been improving their infrastructure with fibre optics, it’s often being integrated with legacy systems – cable TV and phone lines – that were not designed to move massive amounts of data.
Since most users do more downloading than uploading, many ISPs offer packages with download speeds that are much higher than upload speeds. But as more processing moves to the cloud, those low upload speeds are becoming choke points.
Anyone who uses Google Docs, for example, may have experienced lag – the result of the fact data has to move back and forth constantly between desktop and cloud, and gets choked on the download.
Novus Now (Novus Entertainment Inc.) has been carving out a niche in Vancouver with its high-speed fibre optics for both residential and business. What’s unique about Novus’ business Internet packages is its symmetrical bandwidth: i.e. upload speeds that are the same as download speeds.
“Having the symmetrical speeds really allows businesses to take advantage of the benefits and cost savings of having their IT services in the cloud,” said Chris Burnes, director of ISP operations for Novus Now.
“People like gaming companies, they love our service. They’re uploading and downloading different versions of their games.”
If there is one drawback to outsourcing IT, it’s the lack of planning that may result. Typically an IT department budgets for things like hardware and software upgrades and maintenance.
“Many business don’t really plan their IT spending at all,” Dougan said. “They’ll buy computers and run them into the ground until they fail.”
If there is one thing he would like to see his clients doing, it would be planning their technology life cycle. Ideally, they should be replacing a quarter of their technology every year on four-year cycles.
Sigouin agrees: “The days of just going by the seat of your pants and working under a break-fix model is just not sustainable anymore. You need to have a plan in place that includes proactive maintenance so you’re looking at IT as basically a utility to your business.” •
