I became a systems engineer for an IT firm back in the early 1990’s, back in the good old days when re-installing Windows was a regular piece of advice you would give to your customers in order to solve a software crash. Back in those days it was not uncommon to turn up to a customers site to find software that was installed incorrectly or misconfigured, worse still there was little or no documentation to assist you with restoring the server that had just crashed. Not to mention a tape “backup” that was of little or no value due to lost incremental backup tapes, cumbersome offsite storage or worse still a series of unsuccessful backup jobs leaving the customer with no restorable data.

Those kind of situations were of a regular occurrence and cost customers lots and lots of money. To prevent such catastrophes a customer would be asked to deploy resilient servers with redundant hardware and big capacity backup tapes. More often than not the customer would purchase part of the required solution but not be able to justify the “best practice” solution. Cutting corners was a recipe for disaster but at the end of the day it was what most small businesses in New Zealand could afford.

Technology didn’t come cheap back then, and today at the top end of the market it still isn’t cheap. Resilient server hardware still costs, even though I can buy a 2TB hard drive for under NZ$200 it’s not the same as a high performance RAID system that can cost 5 times as much for the same capacity. Lucky for us that cloud computing has started to take off, companies are now able to access a “best practice” deployment of their favorite software running on the resilient hardware we could only dream of in the 1990’s.

The software companies of today are very different to what they were in the 1990’s, they recognize the fact that their software may be installed incorrectly and cause a customer a great deal of pain. What used to be a few wizards used in the setup process has now become an entire suite of tools focused on management and monitoring. Microsoft is one of the players in the market that provides cloud solutions based on the software they have sold to their customers for many years, allowing them to not only provide the best experience of their software to their customers but also to their partners, IT firms, who also have the ability to run the software in a “best practice” environment. All of the tools Microsoft uses in their data centers in Singapore are now used by partners in New Zealand to run their hosted environments, providing a resilient and efficient service.

Microsoft’s hosted offering is price competitive and, as an economy of scale, it will only get cheaper. Recently Microsoft announced a 20% drop in the pricing of their Office 365 suite. So why would I chose to use a local partner to host my email, CRM or line of business software?

Local cloud providers matter, there are many reasons why you would choose a local cloud provider over a larger provider such as Microsoft or Google. It shouldn’t come down to cost of the subscription alone, there are other important factors to consider when working with a cloud provider.

Location

New Zealand is a very small island in a big ocean and as a result our connectivity to the world is somewhat limited. This will change over time with other connections coming online soon however at this point in time there is only the Southern Cross Cable connecting New Zealand businesses to the internet. This will obviously result in some latency and moreover additional cost depending on the plan you have with your ISP. Local providers are usually connected into the local loop via high speed fiber: think latency of around 10 – 30ms compared to Singapore of around 180ms (what I have seen on a GOOD day). This isn’t a problem for 80% of most businesses and their requirements, such as email, however when you are dealing with applications such as CRM with integration into custom line of business applications the latency starts to have a negative impact on the end user experience. The advice I have is to run a trial of the software you intend to run before you purchase, something all cloud providers offer at no cost.

Size matters

When you think of a local cloud provider don’t be surprised to know that there has been and will continue to be significant investment in large data centers in New Zealand. Over the past 3 years I know of more than three Class 3 data centers that have opened up in New Zealand, these data centers are bigger than a football field and are utilized by your local cloud providers. The photo above shows the inside of one of these data centers just north of Auckland’s CBD. They are built using the same guidelines that Microsoft and Google use and are usually helped along by the various hardware vendors; HP, EMC, Dell etc.

Bespoke solutions

Most providers of cloud solutions are able to keep costs low because they do not provide any level of customization for the solution. To most small businesses this will not matter however when integration to an existing on premise solution is required or better yet that solution is to be pulled into a hosted environment a local cloud provider is the only sensible option to choose. Recently I worked with www.onenet.co.nz to host a customers CRM solution. The solution required a level of customization that OneNet was able to provide in-house allowing for tighter integration to their line of business applications. Furthermore the location of the OneNet servers gave the end users a snappy response when using CRM from within their Outlook client, this was a client requirement in a heavy use scenario.

Throat to choke

Local providers have one benefit as well that the likes of Microsoft and Google will never be able to provide, and that is a local “throat to choke”. Don’t get me wrong, the support I have had from Microsoft whenever I have had “challenges” with aspects of BPOS or Office 365 has been first class, however 100% of the time I am talking with someone in a call-center overseas. With local cloud providers, they are just that, LOCAL. If I have an issue with the cloud service or I want some customization I am able to visit local premises or have a representative visit me. As mentioned before this doesn’t matter to 80% of businesses but for those who seek comfort for knowing their service is coming from somewhere local its a deal maker.

Cloud isn’t just a product or a price point, to me it is a responsible way to provide computing capacity to businesses. Good riddance to the all night recovery processes to restore a crashed server and hello to reliable applications!