As businesses deal with the ups and downs of a struggling economy they are constantly faced with the challenge of cutting costs.
Traditionally, information technology has created a significant set of line items in the operating budgets of small and medium sized businesses. These technologies range from printing and copying machines to business-critical applications.
In this article, I am going to examine 5 areas of technology where rich functionality has met commodity pricing, thus offering companies unique opportunities to save and improve simultaneously.
Connectivity and Communications
A vendor who just installed 20 floors of fiber optic cable in our office building approached me in the lobby as I was leaving for a client last week. Their pitch was an offering that was hundreds of dollars per month for a 2MB data connection and five phone lines.
I had problems with the offering on multiple levels.
First, in the era of mobility, we don’t use the phone system we have. Second, we had already tapped out a 5MB AT&T DSL connection that was only costing $110 per month.
Indeed, I was looking for a solution; but I was not about to pay $400-$800 a month for connectivity based on the pricing the showed me.Â So I was determined to find a solution that would allow me to tie together commodity bandwidth and provide our office with enterprise level communications.
After about 1/2 hour of research, I found a small business router from a company called Peplink that allowed me to tie together two DSL lines giving me 10MBs for $220 per month and a third 4G connection from Clear providing an additional 3-6MB at $55 per month.
In summary: for under $300 per month, I increased our bandwidth to almost 16MB and added dual carrier fail-over and load balancing capabilities via a piece of hardware that costs under $400.
Applications in the Cloud
Providing email and basic business software to employees used to be an expensive proposition.Â The expenses included desktop software, server software, server access licenses, server hardware, anti-spam software, and connectivity.
The future of applications, however, is headed toward a concept called “The Cloud” which is basically a fancy way to say “hosted applications.”
This past year, we fully migrated to cloud-based applications and eliminated all servers from our physical premises.Â Our email costs around $2 per month per user, our phone system cost $15 per month and ties directly into our cell phones, our fax and file storage service costs around $10 per month, and our collaboration software costs around $50 per month.Â We even migrated our financials to a cloud based solution costing $30 per month and run Linux applications as a service for prices ranging from $30 to $200 per month per server.
By having migrated to cloud-based applications, our support costs have almost fallen off the yearly budget, and our ability to serve our customers and work with partners and vendors has increased exponentially.
What is most important is that we can easily grow with these solutions as the majority of them were designed to handle companies with hundreds of employees.
Open Source Software
We use open source software both internally and for our client deliverables.Â For example, our flagship online sports publication, MidwestSportsFans.Com, runs on Linux and WordPress. This site literally sees 10s of thousands of users a day and we pay nothing for the software. We do pay for the hosting services and support. Still, we are not stuck with “concurrent user” licensing models that would kill our profitability.
We’ve also pretty much defaulted to delivering customer websites on open source technology as it allows us to provide more value at a more affordable price point to our customers.
In the end, it has increased our profitability as well as our closure rate.
The first major storage acquisition I was involved with was for a client who needed over a terabyte of storage for a financial systems project. The cost?Â Over $2.5 million dollars.
Today, a terabyte of local storage is less than $300 and a terabyte of cloud storage, managed to five 9s of reliability, costs around $150 per month.
Before you buy another expensive server storage array, compare your needs to the offerings available today. Challenge your technical staff to leverage cloud-based, managed storage services whenever possible.
Printers and Copiers
Today’s printing devices have the power to take most small- to medium-sized copiers out of your business. The major manufacturers have created devices that are fast and feature: feeder-based scanning and copying of documents; high quality printing; and low ink/toner consumption. Moreover, when a high-speed scanner is combined with cloud-based storage, the need to print and copy is greatly reduced.
Unplug one of your copiers and try a device like an EPSON Workforce 610 for a week and see if you can make do.Â If you are concerned about support contracts and service, buy a second one and put it in the storage closet. At a purchase price of under $150, you can literally justify plugging in a new one if problems arise.
Last, add a solution from FilesAnywhere and see if you can’t cut your need for copying and reprinting in half.
About Derick Schaefer
Derick Schaefer is the founder and Managing Director of Orangecast Social Media Marketing. As a guest author for The Private Business Owner, Mr. Schaefer writes about topics including online marketing, social media, and small business technology.
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