The Cloud is certainly hanging over us.  Most of the articles I read, talk about the Cloud’s amazing silver linings.  The marketplace is certainly doing its best to sing the praises of the tremendous benefits that rain from the Cloud.  There certainly are benefits.  I also see lots of reasons to bring along my umbrella. Sometimes the rain just leaves you soggy and smelly. Just ask your dog.

When is being in the Cloud not so heavenly? The second of a four part series…

How about when it costs you 5, 10, or 25 times as much? 

Example #1:  AT&T sees your interest in the Cloud as a profit center or at the very least, something that they need to reduce their costs on.  AT&T recently announced that the company is slowing unlimited data customers to a crawl when they hit an unknown unspecified monthly data usage level. So now unlimited data plans can be limited?  So now that you’ve moved your whole iTunes playlist into the Cloud, if you actually want to listen to it daily, AT&T wants you to upgrade to a more expensive data plan.  Of course when you signed up, you signed up for an unlimited data plan, so the obvious solution is to slow your speed down and hope you’ll just pony up for the higher cost.  I feel some Charlie Sheen craziness coming on: Winning!!

Example #2: Let’s take my experience with one of the leading contact management software suites: Act.   Act offers computer resident and Cloud-based versions of their software. I did a price comparison last year looking at Act’s computer resident software vs. Salesforce.com and Act’s own Cloud-based system.  Based on a three year timeline, the software that I’ve bought for $99 to $129 per person in total cost, moved into the Cloud for roughly $25/month/person as a I recall.  In trying to get the most up to date information today as I write this, Act has gotten very cryptic about their pricing.  Their site says, you can “buy” the Sage ACT! Connect software for $69.95, but it is says the service is “a subscription-based service” which means there is an ongoing fee.  I could not locate a complete fee structure today, and maybe they changed strategy from the “per person, per month” pricing, but they do have lots of brief and white paper content there to sell you on the benefits of the Cloud.

Let’s look at the other option I considered.  As of today, Salesforce.com’s second tier from the bottom level is $15/person/month.  Over 3 years, basically the same software solution would cost my small business $540 per person!  Woe to me if I want something custom. I can get an Act consultant to customize things for me for $ probably $75-125/hour these days.   Salesforce.com’s customized software tier is going to run $125/person/month or $4,500 PER PERSON over 3 years!!  For five people, the choice I’m presented with is Act at a total cost of $500 (maybe with additional, new customization) vs. Salesforce at a total cost of $2,700 at tier 2, or with customization, $22,500 at their “most popular” Enterprise tier.

Keep in mind that we ARE talking apples to apples here.  Act may be Granny Smith and Salesforce may be McIntosh (tech pun intended,) but they are both apples. This isn’t hard: Act on the computer please!

As you can see, moving to the Cloud does have tremendous benefits… for the software creator: more revenue and more control.  They get to cut out retail distribution AND charge incredibly higher margin pricing. This must be where some of the “great minds” of the mortgage industry went.

On a side note, one of my gripes as a small business owner is how little benefit software companies like Sage, Intuit, Microsoft and other major vendors actually include in their “upgrades.”  Intuit forces you into their new software every two to three years by cutting off download and/or email functionality with virtually no additional benefit to the end user.  There hasn’t been a new function in Quickbooks for the last 3-5 years that I can actually recall having used.  Most of the time, they’ve changed something to make it less Intuit-ive not better. Why after 10, 25, or however many years, can I still not send a Statement to a customer from that customer’s listing in the Customer window?

When the Cloud-based software providers start gushing about the benefit of having all the latest new features of their software because it’s in the Cloud, I start seeing red rain.  We all know that the majority of “upgrades” are just to fix broken functions, incompatibility and security issues in the software in the first place.  That’s just the nature of the industry. New, truly useful functionality inside of existing software solutions seems rare.  Act works just fine on the computer.

The Cloud parade is going forward, rain or shine.  Make no mistake, you are going to be using the Cloud.  There are some benefits, even for us as the end user.   Frankly, you aren’t going to have much choice.  Just be sure to grab your slicker as you head out the door from your laptop, tablet and phone.

I’ll share more on this in my column next week.  I’d love to hear your positive and negative experiences from the Cloud. Share your comment below.

***

Did you miss one in the series?

When Being in the Cloud Isn’t Heavenly…

Part One
Part Two
Part Three
Part Four

I would love for you to leave a comment below.