SME IT Consulting: the End of an Era

Am I part of the last generation of small-to-medium enterprise (SME) IT consultant? Will this consulting, as I know it, be over in a few years? I think it will be, and probably sooner than that. I think that cloud computing heralds the end of the on-site visit from the IT consultant.

We have two types of clients. The first consists of larger firms where IT managers hire us to either provide holiday cover for in-house IT support staff or to provide specific technical consulting in areas where their staff may be lacking knowledge or too busy to handle. The second type of client is the smaller firm where we are also the IT manager and we cover the broad range of IT for the customer.

It’s this second type of consulting I think will go away and it’s this second type of client I will be discussing for the remainder of this article.

As it is today, we build a new network which consists of servers and their applications, the in-house phone system, workstations and their applications, smart phones, shared file access, remote access, Internet access and Internet protection. We then provide on-going and ad-hoc support; drop in for monthly maintenance checks; we may move the office from time to time; and are called in to discuss, plan and implement the occasional new project.

All of our clients run Microsoft Windows servers, Windows workstations, Microsoft Office, Microsoft Exchange (e mail) server, and the occasional Microsoft SQL (database) server. There are occasional extra server based business applications, once in a while a custom-built application, and Bloomberg shows up fairly regularly. The all-in-one or few servers provide workstation management, network services, file and print sharing. iPads are springing up everywhere.

But consider the following:

• We already provide remote screen-sharing support where we can see the user’s Desktop and show them how to do something, moving their mouse cursor for them. We can provide useful and painless remote support rather than having to be on-site.
• We have already moved all of our clients to hosted pay-as-you-go (cloud) Exchange. We no longer support any Exchange servers directly. We continue to manage the resources via web front-ends to the Exchange resources (shared calendars, resource mailboxes, forwarding, etc.), but we never actually touch an Exchange server anymore and we haven’t built one in years.
• We will shortly have all of our clients backing up off-site on-line over the Internet - no more on-site tape drives, tapes, and backup software.
• We already have one client that is using a Voice-over-IP hosted phone system - no more in-house telephony systems.
• Cloud computing already offers Microsoft Communicator or Lync services, SharePoint, SQL, and entire server platforms, virtual or bare-metal.
• We’re considering moving the entire Windows Desktop for two of our smaller clients into hosted Windows/Citrix sessions. The price has come down and the users would actually have their own company “network” environment hosted (shared and personal network drives, just like now).

It’s hard to argue the benefits of most of these cloud services, especially when it comes to pricing. So far, hosted Exchange has proved an absolute no-brainer in terms of its cost savings. Other benefits include built-in remote-access capability and usually Tier 3 data centre redundancy, which means there are already multiple Internet links to the resources which are backed up continuously to other sites. It means that it would take a metropolitan-wide disaster for you to lose access to your data. We can’t build that level of high-availability resiliency in-house for small to medium size enterprises. (Well, we can, but the proportionate cost would be enormous.)

Given the trends already historical and present; given the resources already available in the cloud; given the almost non-existent implementation costs to the client; and given the other technical advantages described above - how is it possible that most SMEs will not move to the cloud?

The only IT resources left at the client office will be the workstations with operating systems or possibly even thin-client devices, telephone hand-sets, a local network, a firewall, and an Internet connection that is larger than it used to be. The networking and firewall equipment is already the type of kit that is configured off-site and delivered to the client where someone merely plugs it in and turns it on. Given the simplicity of the workstations or thin-client devices used for remote Desktop configurations, they will also be able to be configured remotely and delivered.

So where does that leave the friendly consultant who drops in every week or so? Working an eight hour shift at a hosting centre! All of the skills used before are now needed by the hosting centre: software knowledge; determining client needs; providing support to end-users; configuring e-mail, file sharing, and phone system requirements; and providing end-user support by phone or screen-sharing sessions.

It no longer makes sense to renew all the expensive server hardware for a small network. Given that the standard hardware extended warranty period is three years, that is my prediction when most services will be moved to the cloud for small business.

Once this three year period (at the outside) has passed, a new office IT setup might perhaps consist of an on-site visit by a salesman. However, after that, items will merely be delivered pre-configured: firewalls, network switches, and cheap PCs or thin-client devices. Maybe a junior techie/delivery person in jeans will arrive and connect it all together. From then on, it’s telephone or messenger conversations and remote support and configuration.

It’s the end of an era. It started when we moved from giant mainframe computers to distributed workstations about 20 years ago and the end is in sight. I’m convinced of this. While we will still have our technical consulting to IT managers for a while, I’m looking at options to try and prepare for this change to the small business side of things. I suggest that other IT consultants in similar areas do the same.

4 Real-World Examples and Prices of "Cloud Computing" for 1 Start-up

Yes, I still sometimes put "cloud computing" in quotation marks. For the most part, I do still agree with Larry Ellison's earlier derision of the term. I've had an e-mail account for 18 years. This means that I have used cloud computing for this long and set up small instances of it hundreds or thousands of times by now. That said, I will embrace this marketing term and use it frequently, as this is what people want to hear. Some clients take great pleasure in now being able to brag that they are using cloud computing.

Aside from the term, it is growing more useful all the time in the real world. Hosting companies and resellers have created stable thorough and granular web-based control panels that allow clients or their IT consultants to set up, control, and manage their hosted subscription based applications (cloud computing). It is especially useful for companies starting up preferring pay-as-you-go or pay-as-you-grow monthly fees over purchasing relatively expensive hardware and software to provide the same thing.

We have a client in private equity. He started off as a one-man shop not wanting to invest much at all in infrastructure until he knew where his business was going. Cloud Computing Instance 1: we set him up with a domain name, a one-page web-site, and POP3 e-mail - £96 per year plus a couple of hours of consulting to set it up and document it. (I realise we could have gone cheaper, but we always use hosting companies that have quality help desks available by telephone 24 hours a day, answered by knowledgeable people who speak clear English.)

After a while, the client wanted a bit more from his e-mail system, mainly seamless BlackBerry synchronisation. Instance 2: we upgraded his e-mail to hosted Exchange (Microsoft's e-mail server product). Instance 3: we also set up hosted BlackBerry Enterprise Server (BES) at the same hosting company and integrated it with his e-mail. This now gave him an e-mail solution that he would experience in any medium-to-large firm. E-mail, contacts, and calender are now synchronised seamlessly between his corporate laptop, his home computer, his BlackBerry, his iPad, and web-mail. The annual cost then for cloud computing was £236 plus a £5 set-up fee and another three hours of consulting (mostly migrating mail and setting up client devices).

The client grew and we needed to build him a new office, initially for 5 users but built to handle 15. We're just finishing that off this week. We did build them some in-house computing. They now have one server that is the file server, print server, central backup point for data on laptops, anti-virus program distribution and management, provider of Windows networking services, authenticator for the Virtual Private Network (VPN), distributor of Microsoft updates, and central control for many Windows settings. You could technically call all of this a "private cloud" - applications hosted in-house, just like any network built ever since companies had servers or mainframe computers in an office.

However, we're still using cloud computing, and if that is the case I suppose you could say we are using "mixed cloud" or "hybrid cloud" computing, with our cloud and private cloud. We're still using the hosted Exchange and BES services, now with more users, extra added disk space, some resource mailboxes so they can book boardrooms on-line for meetings, some shared calendars, external contacts defined, and distribution groups. We control all this for the client with the hosting reseller's web-based control panel, with occasional help from their excellent customer support. We get the request from the client, decide best how to fulfil the request, log on and set it up, and the bill for hosted Exchange simply goes up a notch on the client's monthly credit card bill. (They also receive an invoice from us, but that would be the case for in-house e-mail as well.)

At the moment, their annual hosting fee for e-mail and BES for 5 users and all the extra resources mentioned above is about £1,320. Compare this to the cost of setting up an internal Exchange and BES server: £9,700 for hardware, software, and consulting fees to build it.

Added benefits for this solution is that their e-mail data is already hosted in a Tier 3 data centre with redundant Internet links, servers, and sites. It is also backed up. This is all "free" and invisible to the client, and even to us, the IT consultants. It's also automatically and securely accessible from the Internet, something else we would have had to build in-house, so an in-house equivalent would really cost much more than £9,700 if we were to compare apples to apples.

That said, we still needed to deal with backing up the rest of the client's data, their personal and shared files, as well as the in-house server itself. The laptops are backing up their data to the server, but we went with Cloud Computing Instance 4 to back up the server. The client currently has about 100 Gb of data to back up, which includes the server itself. The backups run every night, first to a local cheap external USB hard drive, and then securely over the Internet to the backup hosting provider. (A technical prerequisite for this is a synchronous Internet link, where the upload speed is the same as the download speed. An Asynchronous DSL link won't quite suffice.) One fear about on-line backups such as this is Internet connectivity. What if the Internet link goes down exactly when we need to restore some data? (More likely to happen than you would think in a disaster scenario) The backup software, which is provided "free" by the hosting company, first restores from the local USB disk, as that would be faster in any event. Only if that fails, does it restore back down from their data centre.

This costs £1,800 annually for the 100 Gb backup plus a £150 set-up fee and four hours of consulting to configure it all. If we decided to install in-house backup software and a tape drive, it would cost anywhere from £2,000 (I'm aware that there are über cheaper options out there, but we don't consider them for a business environment.) to £10,000 if the client wanted a tape library. There would also be an annual fee to store the backup tapes off-site and the tapes themselves would need replacing every couple of years. An additional benefit of hosted backups is that there are no tapes changes or off-site schedules to deal with. We receive e-mail alerts of any problems, check the backup logs weekly, and do a test restore annually, just as with any other backup system.

So this company hosts their most critical application, e-mail, and runs IT's most critical role, backups, in a cloud computing environment. It's invisible to the users and it makes our lives as consultants easier, which translates to less consulting fees to the client. This company of 5 users with 100 Gb of data currently pays £3,120 annually for this. Set-up and consulting fees to configure this were roughly £1,055, a fraction of the cost to build it all in-house.

Going forward, we will continue to use these services for a while. I intend to re-examine the costs for hosted backups at 500 Gb and for hosted e-mail and BES at 20 users. Hosting centre salespeople assure me that it will be a limitless savings curve no matter how high it goes, however I will report my own findings on that another day.