What a difference the cloud makes

I hinted the other day on Twitter that I had some big news coming.  I’m not announcing that news just yet, but I wanted to talk about the difference between building a company 10 years ago and building one now.

The Way We Were

February 23, 2001 I found myself summarily fired from the company I was working at.  (It was not the first or last time my big fat mouth would get me in trouble.)  I then started a company called The Storage Group, which I would later sell to GlassHouse.

I needed an email system.  I need a phone system.  I needed a file server.  I needed a lab.  I needed a CRM system and a billing system.  I went out and did all kinds of research to find the best things for all of those things.

For the phone system, I chose a Windows-based PBX called Televantage.  It had a lot of really advanced features like ringing multiple extensions, following you on your cell phone, emailing you your voice mails, etc.  (All stuff google voice now does for free.)  I had to buy several thousand of dollars in PC hardware, Windows licenses, Intel Dialogic cards, and the Televantage software itself.  We then constantly maintained that thing over the next few years.  The Windows software was immediately out of date, but we were scared to death to update it.  We weren’t sure how close the “marriage” was between Televantage and the version of Windows it ran on.  We bought updated licenses of the Televantage software to resolve that issue, but then never installed it.  It was a combination of being too busy and the upgrade being a very hairy process.  (I wanted to do a parallel upgrade of such an important system, but that wasn’t technically possible, since you had to move the Dialogic cards back and forth.)  A year after I bought those licenses, GlassHouse acquired us and I handed them the phone system and the dusty Televantage CDs that were sitting on top of it. 😉  Basically we spent 3.5 years praying that the phone system would never go down.

For our CRM system we choose ACT.  We spent a few hundred dollars on buying the license and then more money with a consultant to show us how to use it.  We then maintained that and its database for the next few years. For billing we spent a few hundred dollars on QuickBooks Pro, and then maintained that and its database for the next few years.  Both of these systems did what we needed to do.

For the lab I spent thousands and thousands of dollars on used equipment.  We had dozens of small PCs whose only existence was to run one app so we could see how it would get backed up with various backup packages.  All of that required all kinds of power and cooling, of course.

Then there was the email/fileserver/firewall/VPN system.  We bought an all-in-one Linux-based system called Net Integrator.  (This company was bought in 2008 by IBM and the product is now IBM’s Lotus Foundations, according to this Wikipedia article.)  It was supposed to be Outlook-compatible, allowing us to do centralized scheduling, emailing, filing, etc. — all in one server.  It even had fully-integrated backups!  I wish I could say it was a flawless system.  The reality was that the scheduling part took ages to perfect and cost us hundreds of hours of lost work.  The system cost a few thousand dollars, which seemed like a steal compared to the cost of maintaining all of the different things that it replaced.  The reality was that it cost us more than it saved us in the long run.  (I’m sure the current version is much better, but we were early adopters.)

All of that hardware meant a dedicated server room with dedicated power and cooling.  The cooling system itself cost thousands of dollars and it’s not like running and maintaining it was free, either.

Present Day

I find myself building a new company again.  I need all the same stuff I needed back then.  The difference is how I will be making that happen.

For email and scheduling I had to choose between Google Apps and hosted Exchange.  I went with the latter oddly due to support for a Windows product on a Mac.  Google Apps doesn’t know how to do Outlook 2011 or Entourage on the Mac.  It has a plugin for Outlook on Windows but I am NOT running a VM all day long just to get email.  (I turn on Parallels only when I need to run Visio.  It’s a nice app but it sucks your battery dry.)  Exchange supports Outlook 2011 just fine, so I went with hosted Exchange with Sherweb.  It’s $8 a month per user, another $5 for ActiveSync, another $10 for BES.  I get 24×7 access to my email (including Outlook for the Web) without ever having to manage Exchange.  It’s a beautiful thing. Done.

My CRM system is salesforce.com, my billing system is Quickbooks.com — and they talk to each other.  Both of them have a monthly fee, but that yearly upgrade to latest versions of both weren’t that much cheaper than this monthly fee.  Done.

BackupCentral.com (and all my other domains) is hosted on a computer I’ve never seen either. Every once in a while I “call the guy,” and he “does stuff” (e.g. upgrade PHP).  I can even do it at 3 in the morning and it just happens within minutes.  It’s a beautiful thing.  The company is Liquidweb.com.  There are cheaper providers, but I’ve never found better service than these guys.  They do Linux or Windows based virtual or physical servers, and they all get 24×7 support.

I’m making the final decision right now on a virtual PBX system (leaning to VirtualPBX.com), but suffice it to say I will NOT be spending thousands of dollars on phone system any more  — only to need to replace it a few years later!  I won’t be using Google Voice because I want the concept of a main phone number and extensions.

I do want an onsite filer, but once I get rolling I’ll probably sync it up with a cloud service provider so my data is also safely offsite.

And the lab?  I still have the same need, but it will be met by a couple of VMware boxes. I did look into EC2, but it just seemed like I would get eaten alive with fees.  I’m OK with maintaining a couple of $1000 ESXi boxes.

What a difference the cloud makes

I mean, wow.  I had to spend about $10K in stuff just to get rolling back then.  Today I’m up and rolling in a matter of hours with a bunch of free trials, and then I just need to pay the monthly bills of those services to keep going.  I’ve got nothing to maintain, hardly anything to cool — nothing to backup — just some monthly bills to pay.

I’m liking this cloud stuff.

----- Signature and Disclaimer -----

Written by W. Curtis Preston (@wcpreston). For those of you unfamiliar with my work, I've specialized in backup & recovery since 1993. I've written the O'Reilly books on backup and have worked with a number of native and commercial tools. I am now Chief Technical Evangelist at Druva, the leading provider of cloud-based data protection and data management tools for endpoints, infrastructure, and cloud applications. These posts reflect my own opinion and are not necessarily the opinion of my employer.

5 thoughts on “What a difference the cloud makes

  1. Chris Furey says:

    Great post Curtis. I’ve been there too and now I’m part of the solution. I can trump your email experience and include message archiving for $8/mo and you don’t need BES. Look into RingCentral for the VoIP centrex service. We use them and love the service. You can do the onsite filer a couple ways and I love Nasuni if you can afford it. Call me if you want a budget way to do a lower end filer on the cheap with an S3 bucket to keep the cloud copy.

  2. femi adegoke says:

    For your IP PBX, why not run 3CX on one of your vm’s? You’ll have access to softphones (use your mac), there’s also an iPhone “softphone” app. Chk out 3cx.com

  3. femi adegoke says:

    @ Chris Furey
    I’d like to find out about the budget filer you mentioned. I love Nasuni, it’s a little out of my price range.
    Bruce St. Cloud Drive seems ok, I just have not been able to find a whole lot of reviews on it.

  4. cpjlboss says:


    MINIMUM cost $500 for software, plus Windows license ($hundreds), plus cost of management. (Ignoring the “typical” startup cost shown here, which is actually much higher: http://www.3cx.com/ordering/sample-configs.html)

    OR I have a bunch of choices that range from $10-$50/mth and nothing to manage ever.

    Not saying it’s necessarily cheaper, but no upfront cost and I’m off to the races for $10.

  5. mschupsk says:

    I would be most interested in your prediction of what similarities and differences there would be should you ever decide to sell your new company as compared to the past sale to GlassHouse.

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