Until recently, cloud-based applications have been considered feature-poor and not as reliable as legacy premise solutions. Many have had concerns about the security of their data being stored in the cloud and processed over the internet.
However, with the advent of highly secure SSAE16-compliant data centers, companies across all spheres of business have begun migrating off of legacy server-based, premise hardware toward solutions hosted by their software providers.
The TAS industry is no different. There are now multiple options available to those
services who are just starting out, or who face decisions about replacing or upgrading obsolete hardware. When considering which deployment suits your company best, cost and reliability are the two dominant (but not only) factors that can govern your decision.
Typically, factoring all the costs of both options reveals that the “break-even’ point between a cloud solution and a premise solution is somewhere between 6 and 10 agents. Let’s examine six of the main costs of both:
1. Initial Investment – Premise systems are more expensive, as they require the purchase of many servers for the various applications and for data storage and archiving. In addition, you will need racks, battery back-up and even generator back-ups to ensure business continuity in the event of local power failures. Cloud systems typically require only a network switch and a firewall, which would require a much smaller, less expensive battery backup.
2. Telco costs – Your carrier circuit costs go away, and are replaced by the cost of SIP trunks that terminate into your vendor’s colocation. In some cases, these SIP trunks can represent a significant savings compared to legacy trunks. One thing to consider – you may be in the middle of a multi-year contract with your current carrier, so you need to investigate if cancelling those circuits will result in penalties.
3. Internet Bandwidth – You will want to have a primary and secondary/redundant internet connection from different providers to support a cloud solution. Remember, your voice and data is coming to you over these pipes so they are crucial. Plan on spending more on your data needs in a cloud deployment than you would in a premise.
4. IT Support – A cloud solution eliminates the cost of supporting all of your premise application servers by internal IT staff or third-party IT support. However, you will continue to be responsible for supporting your agent PCs in both cloud and premise scenarios.
5. Environment (Power, Cooling, Office Footprint) - Servers draw lots of energy and expend lots of heat, so eliminating them by having your software hosted by a vendor will result in lower bills. You will also free up valuable and expensive office space by subtracting Racks, servers, battery back-up units and portable air conditioners.
6. Redundancy and Resiliency - Cloud-based platforms also offer Disaster Recovery/Business Continuity options not available to typical premise solutions. While battery backup units and generators offer power in a pinch, more catastrophic events (fire/flood/natural disasters) may leave office sites vulnerable. Cloud offerings allow you and your staff to relocate to any site that has internet in the event of disaster – even if it means sending staff far away in anticipation of serious weather events. When it makes more financial sense to “own” your premise equipment rather than “rent” cloud licenses monthly, you still have the option of installing your servers in a data center, and “hosting” yourself! This kind of hybrid deployment allows you to control costs and leverage the DR/BC options of a pure hosted system.
The best time to consider whether a cloud, premise, or hybrid solution best fits your business model is when you are faced with investing in upgrading your servers; when you are moving your location, and when your telco carrier contracts are set to expire. When you are faced with any of these scenarios, take the time to research all of the options so that you can leverage these technological advances and continue to build your business on top of a robust, cost-efficient platform!
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