How to Migrate Your Call Centre Into the Cloud

In a previous post, we looked at the many advantages to moving your customer service call centre into a cloud platform, which included the possibility of huge cost savings combined with higher customer satisfaction. Today, we want to look at the process of actually migrating your call centre into the cloud. In other words, we’ll look at what it takes to actually turn that money-saving vision into a reality.

The actual process will vary, of course, from one company to the next. Moreover, your specific steps will probably depend a bit on the size of your business, where your calls will be routed to in the future, and what Canadian data centre you’ll be working with for colocation.

However, the template below should apply very well for most situations. Moreover, it will help to dispel the widespread myth that moving your call centre into a cloud has to be expensive, time-consuming, or problematic. Few things could be further from the case. In fact, most businesses find that the transition is incredibly quick and smooth. The only real issue is figuring out why they didn’t make the switch sooner.

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Steps Involved in Migrating to a Cloud-Based Call Centre

So, what does it actually take to move your customer service calls into the cloud? Here are the steps most businesses will follow:

1. Choose a data centre for colocation. This is an important piece of the puzzle, since the right environment for your cloud platform is essential. You want to work with a partner who can guarantee lots of uptime, maximum security, and “extras” like automatic file backup on a regular basis. Biased as we might be, we recommend you consider a Canadian data centre for the most reliable technicians in a stable, accessible environment.

2. Make a plan for your migration. In most cases, this doesn’t have to be complicated, just an outline of the actual system to be transferred, a date and time for the migration to be executed, and all the relevant details like telephone numbers or server addresses for customer records. Additionally, your plan might contain information on backups and contingencies, just in case systems are offline for a few minutes during the transition.

3. Train your staff for your new customer service platform. Typically, when businesses make the switch to cloud call centres, they upgrade their capabilities at the same time. That means your team might have access to information they didn’t have before, which could require a little bit of training. Or, you might decide this is a great time to overhaul your entire customer service experience to meet a higher standard of satisfaction. Either way, it’s a good idea to ensure that staff members are informed about the switch and ready to move forward.

4. Port your telephone numbers from one location to another. Moving your customer service contacts into the cloud doesn’t have to mean surrendering the telephone numbers you already have (and your customers already know). Most major telecommunications providers can actually port numbers to a new location within just a few minutes, but it’s a good idea to give them a healthy amount of lead time if it’s at all possible. That way, you can be sure things will work the way they’re supposed to.

5. Keep a close eye on your customer service performance. Once you’ve moved your call centre into the cloud and had your numbers ported, you are ready to begin with your virtual setup. All there is left to do at this point is keep an eye on your most important customer service metrics to ensure that your staff is handling the transition smoothly.

Don’t Let the Fear of Call Centre Migration Hold You Back

Some companies end up spending far, far more than they should – one quarter after another – because they are afraid to undergo the process of migrating their call centre into the cloud. While this is understandable for those who aren’t familiar with the technology, it’s also a case where a little bit of misinformation can hurt your bottom line in a big way. Don’t be afraid to make the switch, because the process itself is likely to be very simple and the benefits to your business could be tremendous.

Ready to take the first step? Start your search a data centre that provides colocation services by clicking here.

How Cloud Computing Helps Small Businesses Level the Playing Field

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It has been said that the digital age has reduced the gap that used to exist between big companies and their smaller counterparts, if only because it’s easier for small businesses to reach out directly to customers. That might be true, but any small business owner can tell you that the bigger names still enjoy a number of important advantages – namely that they have larger budgets to work with, and can take advantage of economies of scale. When it comes to IT and business technology, those advantages can be a very big deal. Bigger spending leads to bigger performance and relatively lower expenses. In other words, it means that large organizations can afford to take advantage of things that small companies can’t…

Or at least that they used to be able to outspend smaller companies.

Cloud computing and colocation are changing all of that. By altering the way technology is used and budgeted, these two services are making it possible for small businesses to afford the high-powered tools and systems that their bigger competitors have access to.

Why Cloud Computing and Colocation Make IT a Fair Fight

When smaller businesses switch to cloud computing and colocation with a Canadian data centre, the size of the company, or its budget, doesn’t matter nearly as much. Here are a few of the most important reasons why:

Smaller businesses get access to better software through cloud computing. In the past, small businesses may have passed on investing in software applications that could help them grow their business because the costs were too prohibitive, or at least held off on making version upgrades. With cloud computing, though – and monthly subscriptions instead of big upfront investments – those barriers to critical software are removed.

Cloud computing and colocation mean lower, fixed IT expenses. Obviously, every small business owner or manager likes saving money. But, as an underrated side effect, these two types of IT leasing also allow for a fixed monthly expenses, meaning that it’s easier to plan for future cash flow. Why not give your company more money to spend elsewhere in the budget?

Cloud computing and colocation are both scalable. Over the past decade, lots of businesses have come to regret making huge investments in technology, watching it depreciate (or need to be replaced) even as business conditions remained unstable. By taking advantage of cloud computing and colocation, you can increase or decrease your level of service without making a big commitment now, or being tied to a huge monthly invoice later.

Small businesses enjoy better data security. One thing more and more companies are discovering is that keeping things like hardware and critical data in their offices is a bad idea. Break-ins, fires, and equipment failure all have to be considered and planned for. But, with leased IT in a remote location, encrypted file transfers, and continuous automated backup systems working for you, colocation and cloud computing can take away those worries.

With cloud computing and colocation, you don’t need a big IT team. In fact, when you make the move to these kinds of remote technology systems, you might be able to remove your IT team altogether. That can be a great way to lower your overall expenses while enjoying the same level of service and benefits that you and your employees have become accustomed to.

The best way to discover whether cloud computing or colocation in a Canadian data centre are a good fit for your small business – or find out exactly how much you could save on a monthly and yearly basis – is to call a provider and learn what solutions they have available. In almost every case, new clients find that it takes a lot less than they had imagined to enjoy the kind of IT care that big businesses take for granted.

Are You Too Worried About Cloud Security?

Should you wait, or push forward? Is it better to embrace the new technology, or to wait for it to be improved and refined? These are questions that come up again and again in virtually every part of the business world, but they seem particularly apt when it comes to the phenomenon that is cloud computing – the hottest IT trend in the world and a way for businesses of all sizes to gain huge performance advantages on smaller budgets.

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On the surface, there isn’t much not to love about cloud computing. By moving your hardware and software to a remote location and accessing it via the web, you gain the ability to access real-time information from any web-enabled device… and all while taking advantage of those cost savings we already mentioned. A relatively sizable minority of small businesses is holding off on making the transition just yet, however, because they have concerns about cloud security.

Should you wait right alongside them? Or, is worrying too much about cloud security holding you back from making a decision that can help your company? As always, there isn’t a cut-and-dried answer to that question. While security breaches have been relatively rare, there have been some valid concerns when it comes to cloud security at some facilities, and with some vendors. However, those concerns shouldn’t be pressing enough to stop most organizations from making the switch.

To understand why, consider the basic model that most reputable cloud computing package providers employ to keep data safe. Generally speaking they do deter, prevent, correct, and detect – or do everything they can to scare thieves away, stop them from accessing data, limit the damage they can do, and then fix any known security issues quickly. To get a sense of how that actually works in the real world, consider some of the major safeguards that cloud computing providers using Canadian data centres put into place to protect the flow and integrity of client data:

Maximum strength encryption: In the best Canadian colocation data centres, high-level encryption is used for the transmission of files to and from client workstations. Although maximum strength encryption can theoretically be broken, cyber criminals almost always look for smaller and easier targets that are more vulnerable.

Comprehensive antivirus scanning: It isn’t unusual for a single virus, introduced by the wrong download or email attachment, to infect multiple computers within the same small business network quickly. At a state-of-the-art cloud computing facility, however, continuous antivirus scans mean that bits of problematic code are identified and quarantined very quickly.

On-site protection: In a lot of small businesses, servers, backup hard drives, and other pieces of hardware containing sensitive data are often left completely unguarded and out in the open. At a cloud facility, trained security personnel are on the premises around the clock – as are engineers and systems experts to monitor the hardware and flow of information.

Redundancy systems: When you lose an important piece of hardware in your office or facility, it’s likely that the important files you need have disappeared forever. Because files stored in the cloud are continuously backed up, however, even a natural disaster won’t cause you to lose information like client records that you desperately need to keep your company going.

Environmental controls. You can’t find a better environment for cloud computing than the ones you’ll find in our Canadian data centres, where continuous power backups, strict climate control, and a lack of natural disasters all work in our favor. Plus, we have a very stable government with strict privacy laws, so you don’t have to worry that any organization is going to have an unauthorized look through your company’s records.

When it comes down to it, we can’t guarantee beyond every doubt that a security breach will never take place at our cloud facility, or at any of the others across the country. What we can promise you, however, is that the steps we take to safeguard important information are much, much stronger than the ones you would find in most corporate offices… and certainly at a higher level than the ones most small businesses use.

The issue, then, isn’t whether cloud security should be a concern, but whether you can really believe that you’re safer without cloud computing in a Canadian data centre.

To learn more about cloud computing, check out our white paper Cutting IT Costs with Cloud Computing.

Data Centers Canada Presents: Move Your Contact Centre into the Cloud

Data Centers Canada, a division of TeraGo Networks, recently posted an article on their blog site discussing the advantages of moving your business’s contact centre into the cloud. Below, we’ve provided a copy of the article:

Save Money and Improve Customer Service by Moving Your Contact Centre into the Cloud

Cloud computing is transforming the way we think about technology and communications, with new applications coming to light all the time. One of the most exciting – and one with a huge potential to save businesses a lot of money – is the ability to make your customer service contact centre cloud based.

How does a cloud contact centre work in conjunction with colocation at a Canadian data centre? In essence, it simply means that your calls are routed to Internet-connected workstations through a configurable software package. You control where the calls go, to whom, and what information is displayed to customer service representatives in real time. Because software is hosted online, and the calls are handled over the Internet through VOIP, your business gets bigger capabilities at a fraction of the cost.

With VOIP systems already standard in companies of all sizes, it’s no wonder that so many are turning to cloud platforms to lower costs and increase customer service effectiveness. It’s a classic win-win scenario, and one that virtually any organization can take advantage of.

To help illustrate the reasons why, here are seven big advantages you enjoy when you move your contact centre into the cloud:

1. You eliminate customer service hardware costs. One of the tremendous advantages you gain with any cloud computing platform is the freedom to do away with expensive and unreliable on-site hardware. The savings are especially important when you’re talking about servers, telephone switchboards, and other pieces of technology traditionally needed for customer service. By embracing colocation with a Canadian data centre, you can eliminate fixed investments and take advantage of less expensive monthly agreements.

2. More customer service capabilities. While a lot of businesses are limited to simply engaging customers over the phone, cloud contact centres can allow users to participate in real-time chat sessions and, in some situations, even screen-sharing sessions. That means your representatives can diagnose problems and assist buyers more quickly than ever before.

3. Better customer service call routing. Cloud contact centres work through infinitely customizable software packages. So, you can decide whether to offer menu prompts to callers, where to route incoming calls, and even whether to split them between different locations, departments, or priorities. With this increased control, businesses can deal with their most important inquiries first, and help customers to find the contact or information they’re looking for faster.

4. Real-time customer information. One of the greatest things about cloud computing platforms is that they work in real time, so software can be updated for all users in an instant. Since that includes databases, your customer service team can have the account-specific information they need, continuously updated and ready at a moment’s notice. That allows them to see what happened during previous interactions, view the details of orders, and check things like shipping without any delay.

5. Customer service scalability. When your cloud customer service system is set up using colocation at a Canadian data centre, you always have the option of expanding your operations quickly – and without investing in new call centre locations or buying expensive telecommunications equipment. Simply make a change in your account, based on your current or forecasted future needs, and your usage settings can be adjusted overnight.

6. Better data security. Colocation is a great way to make all of your technology safer, with encrypted connections, automated backups, and secure facilities that are monitored around the clock. That’s especially important when it comes to customer service, since you don’t want buyer information and order details being seen by unauthorized third parties. With the right Canadian data centre, you won’t have to worry about where your data is being stored, or where it might be going when you aren’t looking.

7. Less customer service downtime. Because cloud computing and colocation systems are notably more reliable than traditional in-office telecommunications packages, your customer service team spends less time offline. That means a more consistent experience for buyers, higher customer retention rates, and a better reputation in your industry.

A lot of businesses are just finding out about colocation contact centres for the first time, but they are quickly learning that there is a lot to love about handling incoming calls in the cloud. Is it time you looked into a better way to keep buyers happy and save money all at the same time?

To learn more about data centre technologies and trends, check out the Data Centers Canada blog by clicking here.

Technology Trends Expected to Change the Game

Guest Author: This week’s blog was provided to us by Ramya Raju, a freelance writer from India. With over 8 years of writing experience, Raju discusses a variety of topics, such as data centre technologies, SEO, web design, and mobile. You can learn more about him by visiting his website. 

Whirlwind changes are happening in the world of business and organizations, and that has had an impact on IT as well. The IT sector will have to go through a major transformation in 2014 and that can be seen in cloud, mobile and social technologies. There is an increasing amount of focus and demand on access to information, and these technologies are quickly “coming of age” in order to keep up. As a result, it’s now necessary for companies, especially their IT, to reinvent themselves. And there are some major trends that will make their presence felt in 2014.

The Internet of Things will make things more interesting and challenging for IT

There are a large number of Smartphones and devices that are out there today. Bring your own device (BYOD) culture is also gaining ground to a large extent and that in itself can be a tricky proposition for IT. But things won’t stop at that because Internet Of Things will pose further challengers to IT masters. It involves different types of constituents including wearable personal technology and smart consumer and medical devices. There are sensors in different parts of the world and connected machines to deal with as well, and that doesn’t make the task of IT any easier.

IPv6 has been lapped up in all kinds of places and the addresses it comes with are endless. Thus there is going to be an explosion of data that will have to be handled very carefully. Thus there will be a growing emphasis on scalability and complexity. IT will have a task on its hands when it comes to these factors.

Analytics gains prominence

The industry has often focussed on connection and data movement. Immediate application functionality was another aspect that was given a lot of importance. But now Analytics will takes its place of pride. It will definitely move from being an add-on that often seemed like an afterthought for people till date.  There are several factors that have contributed to this sea change in approach. The major onslaught of large amounts of data is one factor and the impact of Internet Of Things is another. The importance of data is also observed and acknowledged a lot more today, which has made it necessary for people to incorporate analytics right from the beginning. Context sensitive and location aware abilities for IT will also become common place.

More attention on apps

People are paying a lot of attention to the performance and functionality of major projects, especially in the healthcare sector. But expectations from application delivery will be a lot higher in 2014 and things like model drives, user based development will be stressed upon. Thus IT has its task cut out as far as apps are concerned.

It means that the new age, fast development tools will be in the spotlight. People will also have to think about processes that will lead to speedy delivery, which will remain important. Other crucial aspects to think about will be predictability and reliability. To make things more challenging, people will have to think hard about meeting service level requirements and keeping the costs under control as well.

PaaS will be widely accepted

Platform-as-a-Service will get its due and wide recognition in 2014 and it will be one of the important trends of the year. This is a cloud layer that certainly has its advantages and they will be noticed by people, who are only going to lap it up. Some of its benefits include agility, analytics and faster development. Moreover it is more suited for scalability, which is something people will want. And of course, it has the cost benefits of cloud, which will be a huge bonus.

There are few other reasons why people will take to PaaS in 2014. It is known to offer structure and control for strategic needs of organizations. And that’s an appealing proposition for companies irrespective of their size. Once these advantages are noticed, the industry will be forced through a major change. It will lead to business specialists being in charge of data integration tools. Overall data integration will become omnipresent.

Budget Shift in IT

Now that cloud is becoming widely accepted and democratized, development trends seem to be the norm, individual lines of business will start getting more power. They will be in a position to start funding their own projects and wrest the initiative from IT.

As a result, companies and CIOs will have to come up with strategies to ensure that they cope with the evolving climate without losing information. They will also have to ensure that there are no security risks involved and they don’t get into technically dead-end situations. Things will change rapidly and they will have to learn to adapt quickly.

In 2014, one size fits all philosophy will become more redundant than ever before. It could mean different things and strategies for different people based on their requirements but they will certainly have to be worked on. In short, it’s all about making it possible to access information anywhere, anytime and wherever it’s needed.

The Great NSA Debate has Companies Moving to Canada

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This week, privacy advocates around the world staged a protest online in an attempt to protect their data and company information from the world’s government intelligence agencies. Over 6,000 websites took part in the protest, which was branded as “The Day We Fight Back” campaign, by displaying banners at the bottom of their web pages to encourage individuals and companies to participate. Heavy hitters like Google, Twitter, and Mozilla took part in the protest.

Even though the protest itself was more of a whimper than a roar, the controversy over government surveillance still had a significant impact on the businesses economy south of the Canadian border. A recent estimate completed by the Information Technology & Innovation Foundation stated that the American economy could stand to lost up to $35 billion in lost revenues as a result. Because of our proximity to the U.S., skilled workforce, cold climate, and affordable energy sources, Canada is a very ideal location for businesses who no longer want to house their data in the States. Several businesses have already made the move to a Canadian-based data centre, including European banking and insurance firms with operations in the States as well as American retail outlets and oil and gas companies.

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Telus and Rogers are expecting data storage sales in Canada to increase by 20% this year, not including the number of businesses seeking refuge from the ever-watching eye of the NSA. Though it would be naive to assume to any data stored in Canada is fully exempt from government surveillance, there are stricter rules on what government agencies can access. The Canadian Privacy Act, established in 1983, limits the amount of personal information the government can collect, use, and disclose.

So what does this mean for Canadian businesses? With more businesses looking for storage in data centre colocation facilities, there will be increased competition for space. Data centres are a finite resource. Once the space is gone – it’s gone, putting pressure on Canadian companies to get their foot in the door before the data centre is full. Many companies will also be looking to utilize cloud computing services, further driving the demand.

There will also be an increased need for bandwidth as businesses transfer data to their colocation facility or cloud, so obtaining a reliable and secure high speed connection is critical. In order to obtain the full benefits of cloud computing, users will require a symmetrical connection so they can upload and download data at an efficient rate.

To learn more about Canadian data centres, click here.

Blog Author: Vanessa Hartung

Holes in the Internet of Things

In previous blogs, we discussed the benefits of embracing the Internet of Things (IoT) for business. In fact, many companies are already using IoT technologies to save on resources, optimize operations, and cut costs. Some examples include the use of real-time data collection and alerts to let municipal workers know that a garbage bin is full, or running real-world A/B tests by using networked cameras and sensors to detect how customers are engaging with specific products. But how does one manage the abundance of data coming in from each “thing”?

Sure, from a business perspective, the answer is an easy: hire more employees and store any data collected in a data centre. But what about the consumers? Take a moment to count the number of emails, alerts, messages, and updates you receive on just one of your devices – your cell phone, for example. Now add in all the data that you could receive, like an alert from your smart home informing you that the furnace filter needs to be cleaned, or an email from your car to let you know that the oil needs to be changed, or even a reminder from your plants to water the garden.

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The vast amount of incoming information can overwhelm consumers, and it’s likely that buyers will hit a ceiling of what they’re willing to babysit. Once the “cool factor” of a new IoT device subsides, the chore of responding to all the incoming messages can set in, leaving users frustrated and exhausted. In addition to responding to all the incoming information, users will then need to decide how they will manage and store the data. Typically, homes don’t come equipped with a built-in data centre. Therefor, consumers will need some type of system in place to help them respond, manage, and store the information provided by their IoT devices.

This is where we find the hole. There doesn’t seem to be a holistic solution in the market today that can help users efficiently manage their data and devices. Sure, there are companies soliciting the cloud for consumers, but they tend to be targeted to each specific operating system. For example, Apple has a cloud that connects all their devices – but you can’t sync your BlackBerry device to the Apple cloud – and vice versa. Consumers need help from businesses to manage their devices and all the data they’ll soon be getting.

Businesses that are looking to capitalize on the wave of IoT devices need to take this into consideration. Usability is essential in creating a successful product or service, because consumers won’t be willing to waste their valuable time on managing data. Since businesses looking to utilize IoT technology will need a place to store their data anyway, why not provide space to your customers as well? If your company hasn’t started exploring data centre options, and you’re looking to capitalize on IoT, you can begin exploring your colocation options by clicking here.

Blog Author: Vanessa Hartung

Deciding What to Put in the Cloud

Guest Author: This week’s blog post was provided to us by Tanya Williams, a freelance writer and blogger. She has been working with telecom companies for over 20 years, writing about new technologies and how businesses and business owners can take advantage of them. Her topics included IP based communications technologies, cloud computing, website developement, and many more.

Situation: “I have clients across North America, and some of my critical parts come from around the globe. I have a robust ERO system that helps me keep on top of production, deliveries, and collection. I have decided to move into Unified Communications to speed up everything. – Now, what part of my application should go to the cloud for my vendors and clients to see? What about safety and security?”

This situation may be specific, but is common among many business organizations. Clients and partners can come from different places all over the globe. However, the answer generally lies in the amount of information or applications that will be put in the cloud for general use across the organization, as well as issues relating to security and safety.

Here are some factors to consider when deciding what your company should put in the cloud.

  • Provider Responsibilities: As an organization, it is very important to be comfortable with giving up a certain level of control to cloud providers. Organizations who choose to take advantage of deploying on-premise platforms typically own the unified communications application. Upgrades, enhancements, extensions and other integrations are done as needed. Cloud providers do allow a certain level of management to the users, such as managing their servers, but organizations may not have full control.
  • Potential savings: When talking about savings which can be potentially achieved, it is vital to acknowledge that these savings are indeed, real. Research was conducted by Search Unified Communications in 2013 discussing the cost analysis of cloud technology vs. on-premises IP telephony. It concluded that a significant amount of savings is realized when incorporating this type of technology in businesses.
  • Availability: Cloud-based unified communication services are practically available all over the world. However, only a few companies have the capability of supporting and delivering a single global cloud service through diverse geographies. Therefore, if you have partners, clients and sites distributed throughout Europe, North America and Asia, it is possible to acquire such technology with the help of a limited number of possible partners who can provide support to all sites.
  • Services offered: For quite a while, cloud-based unified communications services lacked some features and applications needed to compare to on-premise solutions. Among such features are mobile extensibility, video and a wide range of end-points solutions. However, the evolution of the technology has increased the popularity of the cloud. Leading providers have developed various platforms that are derived from the original infrastructures, incorporating them to the existing platform.
  • Cloud management: It is a common belief that by using the services offered by cloud technology, a user organization offloads itself from responsibilities, casting the burden to the providers. However, such relationships require a good partnership between the cloud provider and the organization. The overall success of the delivery of services requires access to the company’s internal network coming from the operations center to the provider.

Therefore, the abovementioned tips will certainly assist an organization in evaluating the services offered by cloud technology. It is vital to keep in mind that these applications continue to evolve rapidly. Taking note of any possible future enhancements can also help in making decisions as to the amount of information, and the number of applications that should be put in the cloud. Bottom line is that taking advantage of the benefits now can make an organization well prepared for further enhancements in the future.

What’s Preventing your Company from Adopting the Cloud?

Without a doubt, the number of IT professionals utilizing cloud technology is steadily increasing. The cloud provides companies with a secure, convenient virtual location to store their data. Many companies are also using the cloud for disaster recovery and Platform as a Service (PaaS). However, a recent study has revealed some unanticipated hurdles that companies need to overcome in order to adopt cloud computing.

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The study, conducted by TheInfoPro, found that people, process, policy, and organizational issues are the four biggest obstacles to overcome when adopting cloud technology. It’s undeniable that cloud computing is expected to grow exponentially over the next couple years, but the roadblocks mentioned above are impacting the completion of any cloud related projects.

83% of IT professionals reported that they are experiencing difficulty implementing their cloud computing initiatives, which is a 9% increase since the end of 2012. However, IT-related roadblocks have actually decreased by 15%. Of the 83% of respondents that cited difficulties, 68% reported non-IT related obstacles as the problem.

The study also revealed that cloud security was another significant pain point for IT professionals. However, there is a variety of software and hardware tools available to IT members looking for increased protection. Additionally, many cloud vendors are recognizing that security is a concern for IT employees and are taking steps to implement additional protection.

Installing firewalls and obtaining your Internet connection through a reputable provider is two simple ways IT members can help protect the company network. However, when it comes to obstacles that are outside the control of IT employees, the solution isn’t quite as simple. Prior to implementing cloud initiatives, department leaders must be aligned. If every department is doing their part to support the implementation of cloud technology, the transition will be much easier.

To read the study conducted by TheInfoPro, click here.

To learn more about obtaining a secure Internet connection, click here.

Blog author: Vanessa Hartung

Cloud Providers are Utilizing Colocation to Deliver Services

Businesses aren’t the only ones looking to benefit from colocation services. Several cloud computing providers are making the decision to lease space in a colocation facility instead of purchasing or building their own data centers. The cost associated with constructing and managing a data center is significant, and many cloud providers aren’t interested in making the investment.

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According to Reed Construction Data, the cost of building a standard one story 22,500 square foot data center starts around $7 million dollars. For many start-up cloud providers, they simply can’t afford to build or outfit a data center. Even the larger, well established cloud providers are opting to lease data center space instead of building or buying their own.

Most cloud providers are choosing to lease space because they need an efficient and robust data center to deliver their service. By utilizing colocation, providers are able to focus more on other aspects of their business, such as advertising or customer service, instead of spending money on hardware, power, or cooling facilities. Providers need to stay current and utilize marketing to establish a competitive edge in order to compete with the hundreds of cloud establishments in the marketplace.

Colocation also offers the opportunity to reach globally dispersed customers quickly. Instead of building an entirely new data center facility, cloud providers are able to lease space in multiple data center locations. This gives them a great deal of flexibility because they are not limited to a single location. It also provides them with a larger target market because they are no longer confined to one geographical area.

Utilizing colocation to deliver cloud services is quickly growing in popularity as more and more providers recognize the benefits. Although building or buying a data center facility may still be the right strategy for some cloud providers, colocation is making it easier for start-ups to enter and compete in the cloud market.

To learn more about the benefits of colocation, click here.

Blog Author: Vanessa Hartung

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