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COVID-19 Survey: Revenue Losses and Diminishing Cash Reserves

In a national survey of more than 2400 businesses conducted and published by American City Business Journals finds that small and midsize businesses are seeing severe impacts from the COVID-19 pandemic.

The Impacts: Profits, Revenue, Cash, and Survivability

About 69% of respondents have seen revenue decline since the major onset of COVID-19 in March 2020.  Of those seeing revenue decline, close to half see revenue falling by 50% or more year over year.

Additionally, 47% indicate that they have not been profitable and nearly one third report being cash flow negative over the first six months of the pandemic. About 70% of those losing money are losing more than $10,000 per month and 64% will run out of funds within the five months.

About 40% of respondents raised cash through loans or equity investments since March 1, with 91% of these businesses receiving loans from a federal stimulus program, such as the Paycheck Protection Program. These funds were predominantly used to cover payroll and operating expenses as opposed to funding investment or growth.

Change in Focus

With the stark financial impacts, most smaller businesses are changing their focus. Rather than looking forward one to three years, most SMBs are focuses on the current and next quarter. The shift from strategic to tactical is a direct response to the many unknowns of the pandemic, the near-term economy, business sector and market impacts, and government recovery and stimulus plans.

The near-term focus makes sense as we look to minimize costs, conserve cash, and ensure profits and our sustainability.

Where IT Services Can Help

Leveraging the right IT services can help you prepare and react to changes as you navigate the on-going unknowns.  Here are 5 ideas to consider.

Audit your IT services for redundant services.
  • Most businesses find they are paying for multiple services with redundant or overlapping capabilities.
  • In many instances, we see businesses paying for third party services that are available for no additional cost in their productivity suites.
  • Eliminating duplication will require some change of habits, but can dramatically reduce on-going IT costs.
Audit your communication tools.
  • Are you paying for, and not using your available communication tools?
  • Chat, video, and collaboration tools are standard in Microsoft 365 and G Suite, and can reduce or eliminate the need for expensive voice, teleconference, video conference, and online meeting solutions.
  • A modest investment in training/education can help minimize communication costs.
Replace file servers with file services.
  • Most businesses using Microsoft 365 or G Suite are storing files in these systems; these same businesses still run on-premise or hosted file servers.
  • OneDrive, SharePoint, My Drive, and Shared Drives make it easy to save, share, and manage files.  The OneDrive and Drive File Stream clients connect your end user applications to your cloud file services.
  • Moving files from servers to cloud services eliminates the need for physical services, monthly MSP monitoring fees, backup/recovery costs, anti-virus costs, and more.
  • If your staff need to access your on-premise services remotely, you may also be able to reduce or eliminate expenses related to VPN and other remote access services.
  • While you will still want and need to protect cloud-resident files, your cost to store, share, and manage files will be lower.
Move applications and systems from on-premise to cloud
  • You can lower you monthly operating costs and give you the ability to scale your resources and costs up and down as needed on a monthly basis.
  • Make it easier to reduce your physical footprint for potential savings on rent and utilities.
  • Scale your services up and down as needed to avoid unnecessary costs and capital expenditures.
Execute a service and data governance strategy
  • Scale services up and down as needed to manage costs
  • Ensure data is secure, managed, and protected
  • Leverage data archiving services to minimize active account costs

To explore your options and best next moves, contact us for a complimentary Cloud Advisor session.


 

Pumpkin Spice Brake Pads

Pumpkin Spice Cloud Solutions

Pumpkin Spice Brake PadsIt doesn’t just happen. It seems to become a bigger and bigger thing over time. More feel like they are missing out. More try to join in. Many see an opportunity and try to ride the perceived popularity. And many get turned off because of personal taste or even just to buck the trend.

Such is the tangential arc of fads and trends. And, unfortunately, such is the way many small and midsize businesses approach the cloud. 

There is little doubt that Cloud Computing is a trend that is quickly evolving into a “real thing” with staying power. Many “experts” insist it is the “thing to do”. And while we do not disagree with these experts — we do believe that cloud is the best strategic and tactical direction for most (not all!) businesses — approaching cloud as a trend in which we need to participate is the wrong approach. SMBs that get caught up in the “trend” will miss the long term opportunities and will do more harm than good.

Small and Midsize Businesses are Different!

Much of the hype around “Digital Transformation”, machine learning, augmented reality, and artificial intelligence focuses on the enterprise. Yes, these capabilities will make it to SMBs and cloud will help accelerate the availability and adoption. SMBs, however, do not generally have the resources to run DevOps teams and rebuild or build custom applications.  SMBs rely much more heavily on SaaS and packaged solutions.

For SMBs the challenge is to pick the application or system that fills the need, and integrate that application or system into the overall ecosystem. Microsoft, Google, Salesforce.com, and others are creating ecosystems that foster integration within the ecosystem, but offer less support for solutions outside the multi-vendor boundaries they create.

A Cloud Forward Approach

Given this reality, a forward-looking approach is critical to your cloud success.  Your IT should clearly help you achieve your business goals and objectives. Your goals and objectives are forward looking, so too should be your IT and cloud decisions. For many SMBs, the first major decision is which cloud, and the initial focus is on productivity.  Do you go Office 365 and build your ecosystem around Microsoft 365 and Azure?  Do you deploy G Suite and look to deploy apps and systems Google Cloud Platform? Are you using Salesforce.com and will you limit yourself to solutions on the force.com platform? Are you looking at services or solutions that run on Amazon Web Services, and if so, how do those fit in?

Cloud Forward starts by asking the question “Which Cloud?”.  To answer, we map business goals and objectives into technology-driven objectives that, in turn, guide your decisions. Knowing that “cloud” is not simply “what we have running someplace else”, we actively assess other factors that should guide your decision — the structure of your information, your company structure, the culture your have or want, your existing applications and systems, industry-specific solutions, mobile and remote work, and more. We look ask uses about their preferences and what tools they feel make them most productive. And, we look at the near-term and long-term integration required to create a holistic solution.

Without a comprehensive assessment and understanding, your cloud solution will behave like a fad — a trend that fades.  By looking Cloud Forward, you can avoid the hype and fluff. You will focus on substance and will realize tangible results.


Contact us for more information or a complementary Cloud Advisor Session. For a customized Which Cloud Analysis and Recommendation, please complete our Which Cloud Survey. We are waiving the $895 fee through the end of 2017.


 

Cloud Strategy

Cloud Computing Still Needs a Grand Strategy

In a recent post on Forbes, columnist Joe McKendrick discusses a Cisco-sponsored IDC survey results showing a lack of coordinated cloud strategies among large enterprises.  Nearly half, or 47%, describe their cloud strategies as “opportunistic” or “ad hoc”. The 14% or respondents claiming managed, optimized cloud strategies, report substantial and tangible business benefits. These successes come from how applications are built and deployed, a strategy that does not always work for small and midsize businesses (SMBs).

SMB Cloud is Different

Cloud StrategyWhereas most enterprise cloud strategies focus on building new line of business applications and rebuilding existing systems for the cloud, most small and midsize businesses are not building or customizing their own applications. When SMBs do use custom applications, they typically rely on outside firms for development and support. When SMBs move to the cloud, they normally start with “infrastructure” services like email and file services. Existing business applications are often replaced by SaaS (Software-as-a-Service) cloud solutions — either from the current vendor or as a replacement.

SMB Cloud Forward Strategy

Without a strategy, you can end up struggle to get all of the pieces of your IT in the cloud connected to each other and/or your on-premise systems. For you, as an SMB decision maker, a sound strategy will:

  • Identify your business goals and objectives
  • Use these goals and objectives to define and prioritize your near-term and long-term technology needs
  • Create an architecture that defines the pieces — platforms, applications, and data — and how the pieces fit together
  • Drive your decision to go Google Apps, Microsoft Office 365, and/or another cloud platform or ecosystem

Creating your cloud strategy requires some thought and effort, but need not be a lengthy or overwhelming task. Starting with your business priorities and answering a few key questions gets you most of the way there. Once in place, your Cloud Strategy will guide your product selections as well as the order and timing of your deployments.


Interested in creating or updating your Cloud Strategy? Contact us for a Cloud Advisor session — for free and without obligation, or complete our Productivity Cloud Questionnaire for a free assessment and recommendation report.


 

What is Your Workload?

cloud workload icon
As any new technology takes hold, our vocabulary inevitably changes. New terms and phrases, or new meanings, take hold and our vernacular grows and changes.

When you talk to technologists about cloud, the term du jour is Workload.

Talking cloud, workload refers to any measurable utilization of cloud services. The more technical use refers to processor, memory, storage, or network loads. Workload often refers to a “package” of cloud use. The package may be part of an application, a full application, or a set of integrated applications.

Email is a workload; a file sync-and-share service is a workload; a back-end database is a workload; website analytics is a workload. The challenge, of course, is that your business does not think or run on technology components. You have people, processes, systems, and services.

When planning your cloud presence, think of workloads in terms of business functions and systems. Yes, email may be a workload. But so may be your “communication services”, or your “customer service” function, or you “analytics services”.  By looking at workload in terms of your business, you will be less likely to fragment your cloud and on-premise systems. Building and managing the hybrid environment will be simpler and more effective over time.


To discuss your workloads and which may be best in the cloud, contact us for a free and no obligation consultation.


 

 

 

Extended Benefits of Cloud Computing


A Case Study in Network Efficiency

Changing the names to protect identities, let’s take a look at NE Company’s network history and design.  NE Company currently has 4 locations. The company’s headquarters are located in a suburban business park along with a second facility hosting R&D and some engineering functions. The third location for software development is a few miles down the road; the fourth location is a distribution center that is an eight hour drive away, across two state lines.

Generation One:

When NE Company only had the HQ and out of state locations, they connected the offices using point to point leased lines. Internet access was available from both locations. Because of slow performance accessing files, NE Company installed a local file server in the distribution center. While having two file servers fixed the file performance issue, email still suffered from the central location, they occasionally experienced file duplication issues, and the solution was costly.

Generation Two:

As NE Company added locations, they initially stuck to the point-to-point model, creating a hub-and-spoke network. Performance was an issue, as was managing router configurations such that Internet traffic moved to the Internet locally while application, email, and file traffic stayed within the corporate network.

To improve performance and to reduce redundancy and costs, NE Company transitioned to a MPLS, or Multi-Protocol Labeled Switching network.  A single connection to each office could no route inter-office traffic and Internet traffic through a single pipe.

Granted, NE Company increased it’s wide area network capacity by more than 80% while cutting costs in half, but the operational limitations linger. The company’s email server is still centralized at HQ, as are most of the files, and hosting for the company’s web-based management system. Users face performance delays often. The company has added local file services at all locations, increasing user confusion as to file locations and how to access information. The additional file servers have also complicated data backup/recovery services, which now require more administrative time and attention.

As the workforce has become more mobile, access to data and applications has driven an expensive investment in VPN services. VPN concentrators, client software, and management have been an expensive addition to the environment. While providing access, performance fails to meet reasonable user expectations and the support cost is high.

Generation Cloud:

If NE Company took a cloud-centric view of computing, email and file services would move to the cloud.  The company could move its on-premise CRM system to the vendor’s SaaS service, and could host its custom web-based management system in a cloud-based server environment.

In doing so, NE Company would

  • Provide all of its employees with equal access to resources and better performance
  • Replace the complex, managed MPLS network with direct Internet access connections at each office
  • Reduce wide area networking costs by nearly 80%
  • Provide direct access to files and applications from on-premise and mobile employees
  • Eliminate the need for most VPN services
  • Reduce its server footprint
  • Simplify the backup/recovery services
  • Reduce IT Admin time on basic infrastructure operations and maintenance

Conclusion

The impact of moving from on-premise systems to the cloud-based solutions is never as simple as the specific application or service. By looking at the integration points and indirect or secondary impacts, you can better understand the nature of the migration. As important, you can identify potential savings and other benefits as a result of the move.