Thursday, January 05, 2017

Azure May Not Be Right for Your Small Business Clients

What's the best cloud solution for small businesses? My friend Randolph sent me a request/challenge. It turns out to be a very typical question in the SMB space right now. "What's the right cloud solution for this client?"

Here's is request:

Looking to make a major dive into increasing my Azure knowledge.
My scenario is
- 10 Person shop
- 5 Users in one location
- 5 users in five scattered locations
- Currently running SBS 2011
- Utilizing Office 365
- Cloud based line of business app
- Server used for AD and file storage.
- Utilize VPN to get into office and server

Want to move everything to cloud – Get rid of the server in the closet.

Want to see if Azure can be used as a replacement.

- - - - -

And here's my response:

First of all, I don’t see a role for Azure here at all. You don’t need a virtual server. And there are better storage options, including OneDrive.

Second, your request is a perfect candidate for my cloud five-pack (see

Sell them two cloud five-packs. That gives them ten mailboxes (Rackspace, Intermedia, or Appriver).

Location doesn’t matter. Everyone uses Outlook to connect to the hosted Exchange mailboxes. 100% normal Outlook operations whether in location one, location two, home, vacation, etc.

Storage: I prefer Jungle Disk. I understand they’re re-introducing a reseller program. The storage can be on Rackspace or Amazon Web Services. Rackspace is a bit cheaper because they don’t charge for moving data, only data at rest.

Office 365 licenses can be re-licensed through whoever is providing Exchange mailboxes. That way they’re all together and easily managed.

Personally, I would turn the local server into the backup. In other words, bring a copy of data back down from the cloud to an un-shared storage area on the server. (never seen by clients)
I charge $100/month to manage this. All it does is authenticate logons and back up the live data in the cloud.

If you add management of the desktops, that’s ($599 x 2) + $100 for the server. Total income $1,298. Depending on how much data they have, this will cost you about $175/month for Office, storage, AV, RMM, etc.

Since all the services are in the cloud, there’s almost nothing to go wrong onsite except billable incidents because people changed something on their machines. So let’s say it takes an average of .25 hours per person per month, that’s 2.5 hours of labor. If that costs you $125 to deliver, then your total cost to deliver is $300/month. It shouldn’t be this high, but most people tend to give away more free labor than me.

Anyway, your profit is $998/month or 77%.

THAT’s why you need to attend my SMB Roadshow.

- Karl W. Palachuk
Small Biz Thoughts

- - - - -

The key take-aways here are:

1) Azure is not the cloud. If you a hosted server or an SQL instance, then it's your baby. But there are better overall solutions to cloud services. With Azure, you replace a server in the closet with a server in the cloud. You need jut as much maintenance, backup, AV, RMM, etc. as you would with a physical server. Sometimes that the right solution. But for many small businesses, it is not.

2) If you want to learn how to build butt-kicking, massively profitable cloud solutions for small business, you should attend my 2017 SMB Roadshow - coming to 28 cities this year. See



  1. I would suggest that not looking at Azure is in fact playing the short game. Azure is far more than merely VMs. You get Azure with all Office 365 tenants. From there you can certainly add VMs but you can also add data backup, file storage, advanced rights management and more.

    An Azure/Office 365 combination will give users a single identity to access everything. It provides the reseller the opportunity to not only sell products like Azure and Office 365 licensing but gives them the opportunity to easily up sell products like the Enterprise Mobility Suite, Microsoft InTune, Azure AD Premium and so on. Azure and Office 365 are the products that keep on giving for resellers.

    So not looking at an Azure solution is simply playing the short game and taking the small up front revenue I believe. Playing the long game and developing Azure products and services provides the opportunity for long term revenue via fully integrated identity and services from a single supplier.

    The main reason resellers shy away from Azure is that they don't understand what Azure actually is capable of. And best of all with Azure and Office 365? You can script THE LOT and automate everything! That's when you really start being cloud smart, when you use software to do all the hard work.

  2. Thanks for the comment, Robert!

    I'm not saying that Azure is never the right answer, or that it's not the right answer for some technicians.

    But the question started with an assumption that cloud = Azure. I wanted to show how one might build a great cloud offering without it.

    For the client proposed here, Office 365 will be used, and the Azure file storage might be the cloud storage used. This client doesn't need VMs. And, again, pretty much everyone who resells O356 also offers active directory.

    You could do a lot with Azure. But you can also do a lot without.

    1. Agreed but to me the premise appeared to be that you 'shouldn't' rather than you 'couldn't'. That maybe my failure in translation given the funny way you people interpret the Queen's English.

      However, I will also stand by my point of the solution you are talking about is simply solving it for today. What happens when the customer wants to grow. Being proactive and moving to Azure is going to provide far more flexibility as well as the opportunity to up sell services. An IT provider's job is to provide the best possible solution for a customer now and into the future based on their experience.

      So sure, you can do the solution without Azure VM's but I still contend the you really should be consider the solution with Azure, even if you don't do VMs as the opportunity is simply so massive and benefits are so huge.

      My experience is that most resellers are trying their best to avoid Azure rather than actually embrace it. It really should be your first option for customers already on the Microsoft platform, for so many reasons. To my mind, why would you really consider services that can be offered already in the one MS cloud? More vendors doesn't mean more profit, it means more headaches.

  3. Seems to me, my friend, that you assume there's a guaranteed future with Microsoft. Having gone through twenty years of MS partnership, many of us don't see that future as a given. In fact, I think it's quite legitimate to assume that Microsoft will take our clients and leave us out of the equation at every opportunity.

    If you and I take these positions to their extreme, most partners are within one standard deviation of the mean. So it's certainly not a "given" that they should embrace the all-Microsoft-centric position. After all, you can't argue that MS cares a whit whether my business lives or dies. But to me it means everything.

    Note, also, that I'm selling Microsoft Exchange mailboxes licenses (through Intermedia, Appriver, etc.), plus O365 (through Intermedia, Appriver, etc.), plus active directory (through Intermedia, Appriver, etc.). I could be using the Azure storage, but I consider it far more difficult to deploy and administer than many other solutions.

    Bottom line: Microsoft is getting their license revenue. But as the reseller implementer of these solutions, I'm making a huge profit and I can quickly switch to other solutions if need be.

    My two cents.

  4. What is your method for backing up the Jungle disk to the 'server-lite' option you offer in the cloud 5 packs?

  5. There are several options. The easiest is probably Robocopy. During synchronizing, you can run it during specified off-hours and let it have 20 threads. Just make sure it's finished emptying the cache by the time everyone gets to work in the morning.

    After everything is synched, you can run it once a day around 11PM. You'll be amazed at how few files actually change in a day (a few hundred) for a ten-user office.

    Set up the Robocopy job to spit out a log file and check it from time to time to make sure it's doing its job. I do it daily, same as any other backup. My batch file includes time and date stamps at the beginning and end of the job.

  6. Hey Karl, I do agree that to throw all of ours and our clients eggs in one basket is dangerous. Cool as a lot of the Azure capabilities might be, none of these vendors care about us as partners, and really they don't care about clients. It's about profit of course, and if some component of Azure (or any cloud service) that we've hooked our clients on is unprofitable, then Microsoft will think nothing of pulling the plug. Anyway, not to digress or suggest cloud is bad, it is the way of the future but your point is spot on - different situations (and clients) require different approaches.

    Meanwhile, I hope to attend a Road Show - anything planned for the northeast? Hmmm, with the temp here in the single digits maybe a February visit to Miami is worth considering, lol. Anyway, question about the Cloud Pack 5 - does it include on-site work (e.g. customer's PC fails to boot into Windows, or for whatever reason remote access is not possible)?

  7. Duh, one has to just click the ...MORE! link at the bottom of the tour list, stupid users... :-)


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