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Tech Forecast 2014: Bright with increasing clouds, but expect changes

Recent events have prompted an update on the state of IT and future directions. I’ve written previously about the advantages of cloud services, BYOD (Bring Your Own Device) trends, and virtualization.

For business owners, the buzzwords don’t matter. They care about purpose, cost and reliability. Then they weigh pros and cons, view other features, and finally — want to know when to implement. As trusted advisors, clients expect us to delve into details and explore the edge of what’s possible, and recommend best-fit and best-practice solutions when they are ready. Their focus simplifies the decision-making process, but the ‘when’ piece can still be murky. A convergence of business and technology trends has made 2014 a critical year for making transitions happen.

The mantra “if it ain’t broke, don’t fix it,” combined with delayed investments in a down economy translated into many users holding onto XP desktops and Windows 2003 servers well past their prime. Microsoft extended the life support for these systems, but on April 8 security updates on XP will end, and Windows Server 2003 security updates will end next July. Some decry this as profit-driven to force upgrades, but XP (on average) is six times more vulnerable to hacking than Windows 7. Securing obsolete systems or waiting for breakdowns isn’t sound long-term strategy. Investing in technology improves staff productivity — the most valuable asset — so this push is in the right direction. Tablets and other devices usage is on the rise, but won’t replace the functionality of desktops or laptops, most of which are Windows 7 or 8.1 for those visioning ahead.

Increased user expectations are also driving change. A few years ago, clients could go offline for a day, whereas now even a few hours causes angst. In the past, the default mailbox size was 200 megabytes, sufficient for text and html messages with occasional attachments. Now mailboxes are 20 times larger, users frequently handle large file attachments and are expected to respond quickly. As recently as 2007, few had usable mobile email and internet access. Now everyone does and they are “always on.” Some still have regular business hours and work in one location, but numerous others work on the go and need access to their data anywhere, anytime.

Cloud services also have greatly improved in the last few years to meet these expectations. Due to virtualization and economies of scale, the cost of delivering hosted services (like email and file storage) has dropped significantly while capabilities surged. Since hosted services compete directly, they must be efficient, and savings are passed on to end users in price competition. Outages are publicized and costly, so extra measures are taken to ensure reliability and security. HIPAA and other standards compliance are in place. The belief that hosted services are more costly than owning your own server in the long run does not factor the efficiencies of scale or competition driving this environment. The local server may still be king in some applications for performance, but a hybrid with cloud-based services adds functionality, reliability and cost savings.

Many have questioned Microsoft’s decision to discontinue their popular Small Business Server line in 2012. The succession plan was to use lower-cost servers paired with cloud services. Users were concerned this would result in higher total costs. However, cloud service costs have been dropping faster than expected and capabilities increasing, so the hybrid scenario has demonstrated both good value and flexibility since the hosted services are maintained and stay current. This is such a significant advantage that even larger organizations are leveraging hosted services.

A new Microsoft Office 365 Small Business user receives mailboxes capable of holding 50 GB, includings virus protection and spam filtering, and protected redundant file-sharing storage all for $5 a month … less than the valued-added cost of anti-virus and spam filtering just years ago. There are other service choices, but it helps that Office 365 is maintained by Microsoft, developers of the software. Windows Server 2012 R2 offers improved storage and local backup capabilities and integration with the cloud services, making for a compelling upgrade.

In our own recent experiences, last year we began deploying Office 365 for clients. We have been using multiple hosted services for many years, and recently consolidated a number of domain, web and email hosting services to correct issues caused by the acquisitions. Once the decision was made to consolidate, it all progressed smoothly, no doubt due to automation and virtualization. In the last month, we completed more Office 365 migrations, including our internal web and email services, with even more planned for March.

Clients love the improved access. Some are driven by the need for upgrades. One unexpected convert encountered a server problem. Despite getting them back online within a few hours, the conversation turned to their need for higher availability. Even though we were not looking to update their systems, the redundancy offered by cloud services and mobile networks means their customer and supplier interactions could continue — even if the local server or power failed. Once they heard the cost, $5 per user per month, it was a go.

This, in a nutshell, is why these changes are happening now.

Charles Keating is president of Keating Consulting Service (www.kcsco.com), an IT consulting firm serving global clients since 1983. He is also a partner in K2 Strategic Solutions (www.k2strategic.com) and Professional Options (www.professionaloptions.org), and current president and co-founding member of West Sound Technology Association (www.westsoundtechnology.org).

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