Why own the equipment yourself?

I read an article this morning about a hardware firm securing another round of VC funding for its operations. In the article it mentioned that this platform was designed at lowering the barrier to entry for small and medium businesses into the world of virtualization. While I was reading the article, I was surprised at the legacy thought process that is continually used in the technology marketplace. This resulted in the one question that we continue to ask. Why own the equipment yourself?

On-site implementations of virtualization solutions can be expensive, unreliable, and difficult to maintain especially for small and medium businesses. Typically, small and medium businesses don’t have enough work to keep someone busy full time, so it gets outsourced. The problem with this is the business doesn’t get the top talent needed for their system. They will typically look for a generalist to help with the implementation and maintenance. This is like going to your family practice physician for heart surgery. Instead they should bring in that specialist, but that drives up the cost even more. Basically at the end of this, the business is in the same position of having dollars tied up in hardware and needing a specialist to fix the pain.

Enter the Cloud. Businesses can get the same capabilities, but they can bypass the need for buying equipment that is obsolete the moment you buy it. Think of it like this. Everyone used to buy their cars knowing full well that it wasn’t worth what you paid the moment you drove it off the lot. Then leasing came along. By utilizing this new tool, people were able to lower their payments while mostly avoiding the instant depreciation of the asset. It basically comes down to paying for the part of the car that you used.

Utilizing the Cloud is the same principle. Put your computing needs on a reliable provider, and pay for it monthly. Then when the next best thing comes out, you’re ready to take advantage of it. There’s no more discussion about the fact that you just bought new infrastructure, and you can’t replace it yet. By moving computing to the cloud you position your business to take advantage of new technology without having to worry about what you still might owe on that old clunker that was oversized, and never fully utilized. This is a mind shift that is slowly happening in the marketplace. Decision makers finally understand that they don’t need to own the hunk of metal in the closet, and it makes more sense to pay for what you use.