By Sramana Mitra and guest author Shaloo Shalini
Sramana: What do you see in terms of the broader evolution of the cloud computing adoption in your mid-market, say the $200 million–$500 million band? It seems to be an industry segment where cloud computing is a blessing, where you don’t have to spend as much money as the large billion dollar–plus enterprises do in acquiring IT solutions. With cloud computing, do you think that now you can access a lot more technology in a more affordable mode?
Scott: Exactly, I do, It really brings that which in the past wasn’t available to the mid-size businesses. Cloud computing makes these solutions available to such companies now. There are a lot of things that five years ago that didn’t make any sense to us because we didn’t want to spend a quarter of a million dollars trying to get something up and running, as it does not have that kind of return on it. The most interesting part of cloud computing are the price structures. The ones of interest to us are those that come with an ongoing month-to-month fee. They give access to the data, and the costs involved are much less. The benefit in such cases is kind of a no-brainer for companies to go ahead and make decisions to own it.
Sramana: What you are saying here is moving from the capital expenditure to the operational expenditure model that cloud computing brings.
Scott: Yes, with such business models you don’t need to have these huge capital budgets for IT. You just have your operating budgets and are able to get things under the radar that way.
Sramana: It allows you to test things, and if it does not work out you can switch it off.
Scott: Exactly, and I have seen many cloud vendor offerings. They are not trying to get you a two- or three-year term through one of these models. If you are not happy with them, you can go your separate ways. They do charge some amount of implementation money upfront to get them up and running, and they try to protect themselves under those contracts. But essentially, if you are not happy with what you are getting then you can walk away from them at any point.
Sramana: What is an acceptable range of upfront investment – the implementation money that you mentioned?
Scott: For those examples above, we are not talking about a whole lot of money. We are talking about a person or two for a couple of weeks. We are talking $5,000 or $10,000 or something like that to get some of these things up and running.
Sramana: Is the $5,000 to $10,000 ballpark an acceptable implementation fee?
Scott: It really depends on how many different people are involved. In the case of many of these solutions, they already have a main or the basic infrastructure ready. They just need to tweak it for your environment. They might change some pieces to get it up and running, and they should build in some of that flexibility on how they program it to allow us to add on fields to the existing solutions. Customizations like those are ones that a customer should be able to get started with their offerings. It shouldn’t be that complex.
Sramana: You said that five years ago there were a number of solutions that you could not even conceive bringing into your organization because it would cost a quarter of a million dollars upfront. Can you give me a few examples of technology solutions that you have been able to adopt now because of the cloud computing business model, those that you were not able to get before?
Scott: Sure. I think document management stuff, which we talked about, is one. The reason we are looking at cloud computing–based solutions is that earlier we were always talking about hundreds and thousands of dollars required to get all those things up and running. Now they offer all those prepackaged software and all useful features to you via the cloud. If you look at a solution available on the vendors’ hosted clouds or your internal, private cloud solution, they both make so much more sense now, specifically because of cloud computing. I would say some of these reporting tools are trying to get a good robust reporting solution before you. Earlier it was complex, trying to bring in Crystal Reports and having everything custom programmed or something like that; now, the vendors can figure it out what the consumer packaged goods (CPG) customers need, and they pre-configure everything to make it more affordable and easy to use.
Sramana: Absolutely. Do you have any more examples to share in that context?
Scott: None that I have for now.
Sramana: Thanks, Scott, for your insights on cloud adoption at Nonni’s Food Company.