A recent article published by Dan Martin on BusinessZone concluded that ‘Cloud computing’ was a rip off: http://www.businesszone.co.uk/topic/technology/cloud-computing-rip-complains-software-entrepreneur/35063?ref=ukbf

In the article he quotes Quentin Pain, founder of on-premise accounting software company Accountz as saying “monthly charges for products in what is known as the 'Cloud', which can be accessed via the internet, are ‘alarming.’ Small business owners hate recurring charges; they'd much rather pay once for software and have the option to use it forever," he said. "Frankly, I cannot understand why vendors who were charging £200 for permanent use of their desktop software can justify charging £15-20 a month. Over a decade, what looks like a cheap option easily ends up costing £2,000. Cloud computing is great for software-company shareholders, but a real rip off for their customers."

Darren Fell, managing director of Crunch, which provides Cloud products, responded: http://www.businesszone.co.uk/topic/technology/cloud-computing-rip-cloud-entrepreneur-responds/35086

Darren says “Aside from the obviously self-serving faux-outrage to flog Quentin Pain's software, his analysis of the SaaS market is remarkably wrong-headed in many respects […] Software as a service companies provide much more than just regular software in the cloud. For a monthly fee you are not just paying for a piece of software, you are paying for all future versions of that software (no installation needed, no annoying updates, and universal compatibility), technical support and, in Crunch’s case, a full accounting package to boot.”

So who is right?

They both are to a degree. Darren Fell is correct as we do need to move with the times: desktop applications are cheaper to purchase, but more costly overall. They do require a physical PC with a decent amount of horse power, an operating system, and other applications to work i.e. Microsoft Office, email etc. They also require office space, electricity, on-going maintenance and last but not least, physical presence to access and work with the applications and files. Yes there are service providers who (for a monthly fee) allow you to access your PC remotely, but once you start going down that path, are you not effectively working in-the-cloud, but just less efficiently?

Quentin Pain is also right in that it can prove costly for small businesses long term: what looks like chicken feed each month, can actually end up costing the price of a house over time.

For our own research purposes, we compared the top Cloud CRM providers. We found that although their packages varied in content, they worked out pretty much the same in terms of cost. The table below shows the charges for one of those top Cloud CRM providers, and the long term costs for these services – the results are staggering!

Are there any alternative solutions?

Software doesn’t have to be either a desktop application (as in Quentin Pain’s case) or a pay as you go service – there are alternative solutions that can offer the best of both worlds.

Most people, when they hear the term ‘cloud computing’ automatically associate it with on demand or pay as you go solutions. In fact, ‘cloud’ is simply used as a metaphor for the internet and can be anything from a website presence through to full business solutions.

A small business owner can move its business to the ‘cloud’ and own the products outright. They do have to pay one off development costs, but these are quickly recouped through efficiency savings and much more. The costs can be spread (i.e. with a small loan or separate agreement with the developer), but unlike the pay as you go solutions, there comes a point when payments finish.

There are on-going hosting costs, roughly £250 yearly for the average small business, but this fee would usually include website hosting and more.

For more information about how ‘working-in-the-cloud’ can benefit your business, please take a look around our website. If you have any questions, please feel free to contact us.