If you ignore all the techno babble and look past the marketing smoke and mirrors there is real substance in the Cloud that can help redefine the cost profile of IT in real estate companies, generate demand for technical real estate like data centers and reinforce flexible working practises. Ultimately, Cloud Computing is a model that takes away the need to know anything about technology – you can just use it to do your work and not worry about who keeps those big, expensive, noisy and fragile servers working in the background.
Real estate companies can use the Cloud to reduce their overheads and become more flexible in the way they work – this has implications for the amount of real estate they use and for how investors will assess the attractions of new buildings.
Real estate and technology have never been easy bedfellows. The lifecycle of a property is measured in decades if not centuries while technology is often measured in days and seems to have an ever shorter lifespan before further investment is required. By basing all email, applications and real estate software in the Cloud can bring a number of advantages. Firstly, real estate software which is hosted online costs less as you only pay for what you use. Secondly, data used by the software is stored online, obviating the need to manage the logistics of data storage or backup locally – especially useful as part of business continuity planning. Thirdly, the real estate software and data are both available from anywhere at any time without the need for complex networking facilities – important in an increasingly mobile workplace in the real estate software sector. Overall, a change from in-house IT to cloud-based IT is as important a change as moving from the ownership of a building to taking a lease and shares many of the advantages of that process.
In the cloud, there is no need to hire an IT team to look after your technology. This service can be bought complete or in as many separate parts as you need it. Costs are based on the service you require rather than on a stepped set of salary costs and the service can be scaled to suit the work you have in hand. In practical terms, Cloud computing means more flexibility and scalability in the use of IT, combined with reduced capital cost, reduced support costs and usage based charging.
As the provision of IT becomes commoditised it will become cheaper, faster and more effective. This has significant implications for the structure of industry generally. The problem is that companies that have invested significantly in their own infrastructure and systems are likely to find that their costs in the area are unsustainable by comparison with the agility, cost and best practise characteristics of Cloud solutions. This leads to a situation where small companies, particularly start-ups, without the heavy baggage of legacy systems, are likely to be able to compete very effectively using cloud-based solutions.
Cloud computing can create a 60-70% saving on operational costs in the long-term, with minimal capital expenditure required. Typically, Cloud-based projects are cheaper, deploy more quickly and are much more flexible than conventional ones. For example, an in-house email system may cost around £4000 initially for software, servers and installation and then £500 per year in hardware, software maintenance and support. This also comes with a higher risk of downtime. On the other hand, with hosted email, you have zero setup costs and just pay a fee per user per month. You also get 24/7 support, high resilience, the latest security patches, anti-virus and anti-spam and access from anywhere on the planet.
We are in the midst of a transition in how computing services are delivered. We are moving from a custom made, expensive approach to a commoditised, inexpensive, agile approach. In many respects the real estate software industry is a microcosm of industry generally. The early moves into the UK Cloud are being made slowly by big industry players like Hammerson and CBRE. These have large IT teams and millions of pounds of investment tied up in systems and personnel but the returns on capital seen by Cloud projects offer a salutary vision of the future.
Currently, Cloud computing has fantastic potential to increase operation efficiency and, in times of cost pressure, to save money. For those bold enough to embrace it, reduced costs and increased agility will almost certainly bring competitive advantage.
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http://www.commensus.com helps companies with IT solutions, specialising in Cloud Computing. Whether it’s a large established company or a young enterprise, Commensus bespoke solutions can substantially reduce a companies IT costs.