Cloud service has solid silver lining
The Age
Tuesday November 24, 2009
Delaying the purchase of new technology may prove costly, writes Julia Talevski. SMALL-TO-MEDIUM businesses should be putting between 10 per cent and 15 per cent of revenue towards their IT budget, according to Australian Computer Society chairman Kumar Parakala. This is to ensure the business stays efficient and competitive.But what to spend that revenue on is difficult to answer: hardware, software or services? Which products will give the best return on investment?With organisations emerging from one of the toughest years they have faced, many have delayed buying new hardware, such as PCs, printers and servers, according to analyst firm Gartner. But this might introduce costs associated with unreliable equipment."Organisations need to start to assess the impact of increased equipment failure rates and whether or not the current financial write-off periods are still appropriate," the head of research for Gartner, Peter Sondergaard, said.The window for making the most of hardware upgrades is closing as well, with the 50 per cent tax break drying up at the end of the year.Once the right hardware is in place, though, it's time to think about services that will improve the way the business works.There are some clear trends that IT budgets should be focused on. Most prominent of these is cloud-based services, or applications delivered through the web.Mr Sondergaard said sharing services, rather than owning them in-house, was becoming more appealing and cloud computing was the most important technology about which users should educate themselves."Next year will be when we move from the discovery phase to small cloud pilots," he said.Another area companies should focus on is social networking, which can help them communicate more effectively with current and future customers.Many companies have been using social networking as a marketing vehicle.Mr Sondergaard advises companies not to ignore it, as it could help them interact with a significant portion of their customer base.Other types of technology that he predicts will continue to grow next year include business intelligence applications that gather data on customers' purchasing behaviour and interaction with the company.Mr Parakala said companies should be careful about doing their homework on providers and the types of cloud services available before buying."It's very important for businesses to continue investing in technology because that is going to become their driver for innovation and productivity," he said.Details of overall costs of implementing and using cloud services in a business should be considered carefully in order to avoid financial issues in thefuture."Users need to be very clear on what these services are. It is possible that people may take advantage of their lack of understanding and, therefore, it's possible they may spend more money than needed," Mr Parakala said.
© 2009 The Age
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