Cloudy About ‘The Cloud’?

Don’t be. Here’s the easy-sneezy version of what you need to know to help your association or nonprofit.

First, “The Cloud” is just another way of referring to the Web, the Internet, cyberspace. Services “in the cloud” are available via the Web instead of systems having to be installed on your server(s) or applications or programs being installed on your desktop. It means they’re out there — in cyberspace — and you connect to them.

What this means is that the responsibility for maintaining those systems rests on the company providing them, instead of on you.

Yes, this is very good news.

“SaaS” or “Software as a Service” has been around for awhile, and “The Cloud” references have sort of evolved from that.

But here’s the best part. According to TSIA’s October 2011 report, “Understanding the Impact of Consumption Economics on Education Services”:

“Customers no longer have to buy all the complexity. They can buy the capacity, features, and functionality they need, when they need them, and in the amount they need them. The best part for the customer is that huge, up-front payments are replaced by manageable, monthly payments. No longer is the customer held hostage by a product that is too hard to use and too hard to uninstall.”

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Wait! There's more!

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"…[T]here will be constant price pressure as new suppliers enter the marketplace and/or new cloud offerings are promoted."

TSIA anticipates a shift from long-term licensing fees to micro-transactions, which could be pricing per user per month, per feature, per gigabyte of data stored, per content downloaded, or any number of other similar yet singular types of transactions.

We’re already seeing this from some vendors. Charging a $X fee per user per month for up to X number of users is one example.

This is great because we’ll only be charged for the actual number of users in the system and/or for the actual downloads or other access options.

Of Course There’s a Catch

You can get your calculator out and do the math if you want, but the logic is clear: the better the deal is for us (the consumers), the more the vendors will have to work to make the same levels of income.

Here’s an example. Let’s say you’ve decided on ACME LMS. Let’s say you’re just starting with elearning so you’ve chosen their low-end “Basic” option: features A, B, and C, for $5/mo per user.

Let’s also say they have a “Standard” option that includes the features you already have and use, PLUS features D, E, F, G, and H for $10/mo per user.

Even with the same number of users, ACME LMS stands to make more  money from you.

They might not try to get you to opt for the “Standard” bundle at first, but you can bet they’ll be looking to “upsell” you at some point. They have revenue needs, and you’re the way to fill those needs.

I’m not saying don’t take the upsell. But I will tell you to ask for the data.

More Cloudy Benefits

A hidden benefit of a product that sits in the Cloud is that it’s generating a bunch of data on your use of the system. You might be getting that data, you might not. But you can bet the company is sucking as many numbers out of the system as it can get.

That’s not a bad thing.

They can tell you how your members are using the system in ways you probably can’t imagine. It’s to their benefit to do that.

So if they’re suggesting an upgrade to another bundle — let’s say to the Standard option in the example we’ve been using — then ask to see the data. Look at how the features you’d be adding could enhance the learners’ experience in the training you’re giving them. How many users would likely be affected if you incorporated those additional features? Would it be worth the additional cost? Why? Why not?

If you’re not convinced, no need to make the jump. The next “level” of service will be around for awhile. You can make the change whenever your organization is ready, and you can do it pretty quickly compared to the old license-renewal cycles that are measured in years.

Yes, there are terrific benefits when you let your elearning programs live in the Cloud rather than on some server in a back room someplace. Start modestly, graduate up if needed, and be sure the vendor you choose has a great reputation for uptime and excellent back-up systems.

Could your elearning benefit from living in the Cloud?