The Cloud Explained – Cut Your Costs Dramatically


What is the Cloud? Everyone is throwing around this term, but what does it mean? In this video, Eric Spellmann explains, in plain English, what it actually IS and lists the advantages it brings. In addition, he shares some key requirements your cloud provider should have and lists the top competitors in this growing field. If you want to cut your technology costs and gain “anytime/anywhere” access to your data, watch this video!

Links in this Video

  1. Google Apps
  2. Tour of a Google Data Center
  3. Quickbooks Online


Note from Eric: Below, you will find a word-for-word transcript of this video. I provide this as an aid for the hearing-impaired and for those who might just want to read it rather than watch the video. This conversational style is not reflective of how I write. Be nice! Hey I’m Eric Spellmann with ericspellmann.com and today we’re going to talk a little about the Cloud. Now don’t worry, this is ground zero. I will assume you don’t know anything about the cloud. We’re going to talk about what it is and then why you might want to consider it and how it can save your business a ton of money! So let’s begin.

First of all what is the cloud? I mean, you’ve heard it all over the place. Everyone’s saying “You need to be in the cloud. Everything’s in the cloud. Everything’s moving to the cloud.” But what is The Cloud? Basically, if you wanted the most simple definition in the world, all it means is instead of utilizing all the programs and software and data on your PC in your office, or on your server in your office, basically all of that is being moved to a server somewhere else.

And you are accessing those programs and that data using a web browser like Internet Explorer or Chrome or Firefox or Safari. So in other words, all your programs, all your data are on someone else’s server. So, how does all of this work?

Basically, when you have someone else’s server out there, you gain a whole bunch of advantages. And we’re going to talk about each one, we will break them down for you. We’re going to talk about the advantage of renting versus buying this type of stuff. Then you have less down time. You can access it anywhere and there’s better security. So let’s go for it.

Let’s first talk about the whole renting versus buying thing. Because a lot of people say hows money being made on this? Well instead of you buying software all the time, you are renting it.

Good examples are servers. You know a server in your business and that’s what I mean, a small business server. You know that machine that sits in a closet somewhere and all of your company’s files are on it, maybe even some software.

Chances are you paid maybe anywhere between $2000 – $4000 or even more than that! Well now you won’t have to buy a new one. And the thing we’ve discovered is that servers which you buy for your offices, usually last for about 4 years. It’s not that they stop working after four years, but they usually can’t run well enough after four years to make it worth it, so you end up having to buy a new one.

So when you are paying someone, almost like rent, basically you’re not having to make those huge expenditures every four years, you’re paying a little bit every single month! You are renting space on their server, renting the use of their software. So not only are you saving money on the hardware, but you are not having to buy these big pieces of software. So talk about helping cash flow, it’s amazing!

Also, it allows you to let your older machines last longer! You know I tell people all the time “The PCs in your office are only good for about 4-6 years.” And that’s because they’re just not powerful enough to run all the software upgrades made after that. Well the neat thing about going to the cloud is that basically all you need is a machine capable of pulling up web pages. You’re not installing any high-end software! You just need to be able to look at web pages.

And basically, any machine made in the last 10 years can do that. And so, you may have a 10 year old machine, but as long as it’s pulling up web pages pretty quick, guess what, it’s accessing and running all your cloud software just as quick as someone with the fastest computer in your office. So your old PCs last longer. And trust me, that’s worth it!

There’s also less down time when you’re in the cloud. Keep in mind that on most cloud providers, most cloud vendors, your data isn’t on just one server or one machine in their data center somewhere. Your data is on multiple servers, and in some cases on multiple data centers spread around the world! That way, if you have a single place go down or a single machine go down, you’re not dead in the water. All of you who have a server in your office know, that when that machine goes down, your whole office is there sitting idle.

You are losing money every second! But when you put all your programs and data in the cloud, if one of their servers goes down, you probably won’t even notice it, because the others take over immediately! And so your up time, which is the opposite of down time, is HUGE!

And there are cloud vendors today, who have up time guarantees of 99.99%! Which basically means the maximum they guarantee not to be down is more than two minutes! Or the maximum they guarantee to be down is no more than two minutes.

Keep in mind that when we talk about the cloud, the location of your data is completely irrelevant. Now this is where some of you are going to have trouble. Because you’re saying “Eric the cloud idea is a good idea, but I would like to be able to point to my data. I would like to be able to hold my data. The idea that my mission critical, sensitive customer data is somewhere where I don’t know where it is, Eric that scares me.”

Well I’m here to tell you that in your mind, location of your data (physical and geographical) becomes completely irrelevant if I can meet two requirements for you. One, if the security is high enough and two, if the up-time is high enough. In other words, if I can convince you that the security is higher than what you have now and that it will be available more than it is now, you will care geographically where your data exists.

Access anywhere. When we talk about access anywhere, what do we mean by that? I mean, basically at this point, you can now run your company and do your job anywhere from any device that simply has Internet access. It’s that simple. And these devices could be all sorts of things, they could be tablets and smart phones and PCs, basically anything.

They could be hotel computers. Think about it this way, you’re able to walk up to a hotel computer, log in to your company, access to all your data and do everything you need to do and then the second you log-out, not one trace was left on that PC! And yet you are able to access it.

The most important asset of your company, remember this, is not all the physical things you have, it’s your information. Your information is the most valuable thing you have. And having access to it and keeping it from getting lost, is critical. And I am here to tell you that the cloud is a better place for your programs and data than your server in your office.

Good example, let’s say that your business has burned to the ground. You’re saying “No prob Eric, we have backups.” Yeah but at that point, you must be hoping that someone took the backup home last night because the whole office burned down, the server burned down.

Some of you just have hard drives hooked into the back of your server and it’s backing up every night, but if that room burns up, you’ve lost everything! In an emergency situation, and I’ve actually had this happen where my whole building lost electricity. I could take my workers or whoever I want, to a coffee shop with laptops with wi-fi and we are up and running again.

We are doing exactly what we need to do. So, being able to keep running your company in an emergency without having to wait a couple of days for a new server to arrive, install all the software and get everyone hooked back up. Remember time is money! You want to make sure you want to get back to work in no time.

Better security. Now this is where a lot of you are going to say “Eric, wait! How is the cloud more secure than a machine physically in my office.” Keep in mind that most cloud level vendors, they have bank level security. Meaning from the second you log-on to their website to access your data, all of the information is encrypted and it’s using the same encryption that your banks use.

And I know all of you use the Internet to look at your bank accounts. And if you’re comfortable with that level of encryption, trust me this is the same if not better. So, you actually have a safer connection to your data.

There are no physical servers in your office for people to steal. I mean just think about this, if someone breaks into your office right now, goes and grabs your server, they have it! Whereas today, if you’re totally a cloud company, and they break in and grab a PC, theres not one bit of your customer data on it. And you have no server to steal. Basically all it is a PC that was unpacked from the store, and it has basic Internet access. You haven’t lost anything and you are no longer legally liable for whatever the criminal has stolen from you, from the data’s standpoint.

And remember like I mentioned with the hotel computer. When you go to a hotel and use their computer to access your company’s data or when you go to Uncle Ned’s house at Christmas and log-in to do a little bit of work, the second you log-out, there isn’t one bit of information left on that computer. Your data is safe, because it’s in the cloud!

So how do you choose a cloud vendor? I mean there’s a lot of them out there, and a lot of them do different things. Keep in mind bigger is better. And what I always tell people if you’re going to choose a cloud vendor, someone whos offering cloud services, you want to make sure that they’re going to be around. I mean after all, the programs are on their systems, you data is on their systems. You want to make sure that they’re going to last, so I probably won’t go with a company who just started into the business.

There are basically three leaders today, in the general cloud environment category. They are Google, Apple and Microsoft. Those are the three big ones. Now I would add someone else to that list and that would be QuickBooks. For instance, I do all of my accounting in the cloud and have been following this practice for years. Anyone in my office, who I give access to, can access the accounting. I can access it from home, I can access all my accounting from my iPhone. I can do it all because it’s cloud based and I don’t have to worry about software updates or licensing and issues like is it on this computer or on that computer. Also, I don’t have to worry about someone stealing all my financial info because it’s in the cloud.

Well as always, if you have any questions on this feel free to ask me. I mean that’s what I am here for. The cloud is a huge, and I mean a HUGE new area that all businesses are moving in to.

And by moving your information to the cloud, we are seeing many many companies save tens of thousands of dollars, not only on support cost but also on buying these big upfront purchases of hardware and software. So let me know if you have any questions. I’m Eric Spellmann with ericspellmann.com and Spellmann & Associates. I’ll see you in cyberspace!