Subscribe to multiple cloud applications? You may be paying for redundant services.
The speed, reliability, and security of cloud-based applications makes them great for businesses of any size.
In fact, 83% of businesses will likely be operating in the cloud by 2020.
That growth of cloud services is terrific, but many of the companies that subscribe to them end up throwing money away. Cloud service providers increasingly bundle applications, which means unsuspecting business owners might end up paying for tools that they already have.
Microsoft's Office 365 package, for example, provides small businesses with a suite of cloud-based tools and includes the cloud storage application OneDrive. I've helped plenty of clients migrate over to Office 365, and I often find that they're also paying for cloud storage with Dropbox or another provider.
Likewise, people love Slack. It's a great messenger app. If you have the Office 365 bundle, though, then your business is already paying for the same functionality in the form of Microsoft Teams.
As a startup or small business working to grow, your job is to maximize the value of every dollar you spend. Don't waste money on applications that provide functionality you already have.
The rise of the bundle
Companies like Microsoft and Google continue to bundle more features into their business software packages. Cloud-based suites of products often have some interconnectivity or dependency that justifies selling them together for a higher price – even though users might not want or need everything that's included. Bundling also helps reduce sales and marketing costs, test the market for products and provide a more consistent user experience.
That price isn't as reasonable, however, if you're already paying for similar products. Most business owners subscribe to the Microsoft 365 suite for tools such as Word, Excel and PowerPoint, but they might not be familiar with every product included with that subscription. As a result, they end up paying for stand-alone products that perform the same functions.
In my experience, these are a few of the most common redundancies to avoid if you're looking for value. Check your bundled cloud services for these tools before paying for stand-alone applications.
- Email filter
- File storage
- Note taking
- Team chat
Editor's note: Looking for the right cloud storage or backup solution for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
Rooting out redundancies
One of our clients was paying $12.50 per user, per month for an Office 365 Business Premium subscription, which the company used primarily for email. This same client used DropBox for file storage (for $12.50 per user, per month) and Slack for team communication (at a cost of $6.67 per user, per month).
The company's needs for file storage and team communication could be met by Microsoft OneDrive for Business, SharePoint and Teams, all of which were included in its Office 365 subscription at no extra cost. Our client made the switch, which has saved it $19.17 per user, per month. The company has 100 employees, which means that it saved $23,000 a year by eliminating redundant services.
Small businesses cannot afford to leave money on the table – especially with IT costs. If you want to ensure you're not paying twice for overlapping services, here are three tips to help you find and eliminate redundancies:
- Check your list. Pay attention to every item on your cloud services list. Make sure you know precisely how each subscription adds value to your business. If you're not sure about the specifics of an item, don't hesitate to ask your service provider.
- Identify customization opportunities. Before investing in a suite of tools, figure out whether you can create your own bundle – often with little or no change in price. Speak with your cloud service provider to develop a plan to cover your needs without duplication. Your provider should assist you in creating a customized plan that meets your needs and price point. Even if you're already into a subscription plan, ask for help eliminating the redundancies and streamlining your costs. A reputable provider should work with you to make that happen.
- Know who needs what. Determine who in your company is actually using each service, and then ask about their average use. If you're paying for services that your employees never use, get rid of those tools. If you're paying for 25 software licenses but only 10 employees in one department actually use them, then you have 15 wasted licenses. Make those subscriptions available to employees in other departments or adjust your package to better fit your team's needs.
As large cloud service providers acquire smaller companies and add associated services to their offerings, redundancy will only become more pervasive – we could ultimately see a consolidation of cloud vendors that offer only a single product suite. Until that day, however, it's up to you to make sure you're not spending money on tools and services you don't need.