Cloud-first enterprises can cut costs with these best practices

For startups and organizations without dependencies on classic enterprise applications, the cloud offers significant savings over traditional software deployments.
Written by James Sanders, Contributor
Image: iStock

For startups and small organizations moving their workloads into the cloud, finding solutions that offer adequate features within budget and that can scale with growth might be difficult. Fortunately, by not being burdened by demands for compatibility with legacy software and file formats, substantial savings can be found in the judicious selection of your cloud vendor.

Shop for an affordable office suite

In typical organizations, a majority of collaboration occurs inside the confines of the office software suite -- it is a deeply entrenched part of business operations. New organizations have the good fortune of not being burdened by documents in peculiar legacy formats, such as those from WordStar and Lotus SmartSuite, or dependencies on currently maintained yet outmoded formats, like Microsoft Access. As such, starting from zero allows for much greater flexibility.

The two biggest vendors of cloud-hosted office suites are Microsoft and Google. Microsoft offers six pricing tiers, while Google offers only two.

Google Apps for Work is the lowest-priced package -- the standard tier is $5 per user, per month ($60/year), although for a one-year commitment, the price drops to $50/user (billed at $4.17 per month). For Google Apps Vault compliance and eDiscovery services, unlimited storage, and additional administrative controls, the price jumps to $10 per user, per month ($120/year). There is no limit on the number of users.

In comparison, the pricing structure for Office 365 is labyrinthine and confusing. The cheapest tier, Business Essentials, is more expensive than the standard tier of Google Apps for Work -- it comes to $60 per user, per year on a one-year commitment. For monthly access, it comes to $6 per user, per month ($72/year). This tier includes hosted email, Skype for Business, and other communication features, but lacks PC/Mac and tablet licenses. Adding those licenses increases the per-user price to $12.50/month ($150/year) on a one-year commitment, or $15/month ($180/year) with monthly billing. Both of these plans are limited to a maximum of 300 users -- at which point, organizations are obliged to upgrade to the higher-cost Office 365 Enterprise plans. For the highest-tier plan, which includes compliance and eDiscovery tools, the price jumps to $20 per user, per month -- double the price of Google's offering.

Take advantage of per-site versus per-user licenses

Depending on the nature of the organization, per-site licenses can be a source of significant savings over per-user licenses. The costs involved with per-user licenses penalize growth, and can be prohibitively costly in organizations that have a high proportion of part-time or contract employees. For enterprise resource planning (ERP) or customer relationship management (CRM) services, finding a vendor with a billing component that does not stifle growth is vital.

Salesforce, one of the first providers of cloud-based CRM solutions, relies on per-user licenses, with a variety of usage tiers. The Small Business starter plan is $25 per user, per month, but is limited to five users. After that, pricing tiers are $65 or $125 per user, per month, billed annually. Added together, it's a major expense that can become burdensome when hiring additional employees. Theoretically, it is possible to undercut this by account sharing between multiple employees, though this would be a security issue.

In contrast, Bizowie is built around using per-site licenses, with billing based on factors like the number of modules used. For example, if your organization works in the information economy (i.e., you do not produce physical, tangible things), there is no use for the Manufacturing module. With site licenses, there is no need to pay for features that are not relevant to your organization -- you pay for the features you need.

Consider deploying end-user terminals instead of PCs

You may want to rethink the terminals provided to end users -- with data stored in the cloud, there is little need for the mass storage provided by traditional hard drives, using an optical drive to install software updates, or PS/2 and RS-232 ports in end-user terminals for most deployments. In these circumstances, the Intel Next Unit of Computing (NUC) provides a suitable replacement for typical workstation systems.

Additionally, energy savings is a significant consideration -- Lenovo's ThinkCentre M73 uses 240W power supplies, while NUC systems use 65W power supplies. While this does not amount to a significant savings for an individual workstation, it can lead to substantial power savings in aggregate in large deployments.

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