Basecamp is a popular project management tool provider that switched to the cloud in 2008. Last year, it moved back.
Why? Because with project management workloads, there are only a particular number of tasks humans can accomplish at a time – nobody can complete ten million tasks at once.
Moreover, people can only fulfill those at the speed of a human, not a machine.
As such, businesses only require relatively static processing power to support their project management endeavors. Thus, the cloud is often unnecessary.
Recognizing this, Basecamp decided that the high costs of paying for the cloud didn’t match up to its customer needs and reverted back.
As a result, they could achieve much more reasonable costs and appropriate their business model by embracing private hosting.
Yet, this trend extends beyond the boundaries of project management, as humans still do most of the work that a business accomplishes.
Is the Cloud Necessary for Static Workloads?
Pushing past the confines of project management, consider everything that goes into an ERP solution: these are predominantly static workloads.
Now, think about the ERP solutions of leaders such as Oracle or SAP. While these tech pioneers are broadening their portfolios, the processing power required to handle the workloads within their ERP solutions has not significantly changed.
Taking this principle further, consider other business systems that mostly require human inputs and outputs. It is often best to question the cost-efficiency of moving these to the cloud.
As Pierce Buckley, CEO & Co-Founder of babelforce, tells us:
“If I were to make a decision about moving a solution to the cloud, with my management head on, I’d ask: tell me about these workloads. How often do they happen? Do humans have to do them? That would be in my first set of questions.”
Nevertheless, most technology is best placed in the cloud in particular environments. A contact center is perhaps the best example of this.
The Cloud Delivers Value In Dynamic Environments Like the Contact Center
With incredible fluctuations in demand and AI beginning to come to the fore, the cloud is much more beneficial in the contact center.
Recognizing this, Buckley states:
“You will likely need auto-scaling to handle peaks and auto-recovery because if something goes wrong, you just can’t afford not to be back and running with an alternative version of the service within seconds.”
As a vendor of cloud contact center solutions, it is no surprise that Buckley champions CCaaS. Yet, he likes to discuss the shortcomings of cloud technology instead of following the hype cycle.
In doing so, operation leaders can support the CFO in understanding why a rental SaaS model may drive more value in the contact center than elsewhere in an organization.
After all, the cloud is not always a cost-effective endeavor.
It’s Time to Question the Cost-Efficiency and Diversification of the Cloud
SaaS vendors typically host their solutions within one of three clouds: Azure, AWS, or Google. With such little competition, cloud costs for vendors – and consequently their customers – can spiral.
For instance, seven percent of larger enterprises spend more than $12 million annually on Google public cloud services. This figure rises to 15 percent on Azure and 18 percent on Amazon.
Moreover, as of 2022, 53 percent of small to medium businesses now spend 1.2MN annually on cloud computing – up from 38 percent just 12 months earlier.
If more vendors, CFOs, and CIOs discuss this issue, that may help to drive costs down.
That is Buckley’s hope, who adds:
“If more businesses start to question the need to migrate every application to the cloud, the more pressure there is on the big three cloud providers to come up with more rational cost models.”
With little pushback and a lack of competition to challenge these providers, there is currently little incentive for them to do so.
That raises the issue of a lack of cloud diversification. Already, this is a concern, because if Amazon goes down, 30-40 percent of the services people use every day go down.
Such a thought is worrying, as the entire principle of the internet is that it’s highly distributed. Yet, the big three vendors have created potential clusters of failure points.
Of course, these vendors bring significant advantages and firepower. However, if businesses begin to question their dominance and think more closely about where they host solutions, the business world could achieve more diversification and challenge pricing structures.
Leveraging the Ideal Tech Architecture
Much of the cloud’s initial promise centered on ease of integration. Yet, thanks to API-first solutions and wrappers that produce APIs for legacy technologies, it is no longer a barrier to connecting on-premise and cloud-based systems.
As such, a business may integrate its cloud contact center – whether it is NICE, Genesys, or any other platform – with an on-premise ERP – such as Oracle or SAP – within hours.
babelforce helps contact centers to enable such third-party application integrations and prime their service environment.
To learn more, visit: www.babelforce.com