By freeing-up time, cash and capital expenditure budgets, moving to the cloud can help mid-sized manufacturers create a business and cultural climate for product and service innovation, discovers Malcolm Wheatley.
Thanks to its range of well-known brands – including AGA, Rangemaster, Falcon, and Rayburn – Leamington Spa-headquartered cooker manufacturer AGA Rangemaster needs little introduction.
Less well-appreciated, perhaps, is the firm’s place at the cutting-edge of on demand computing, thanks to a partnership with Star, a specialist provider of cloud computing services for UK businesses.
AGA, it turns out, relies on Star to deliver and manage its underlying IT infrastructure, helping to bring AGA’s business units closer together. The goal? Improved IT performance, at reduced cost. Network speeds have increased 20-fold, reports AGA’s head of IT, Imran Hassan, while costs have reduced by as much as 40%.
“Businesses understand that they definitely need what IT can give them – enterprise applications, e-mail, Internet, EDI and web services. But owning and operating it themselves is a distraction, and an expensive one at that” – Paul Watson, Chief Operating Officer, Star
To Paul Watson, Star’s chief operating officer, such transformations are nothing new. A growing number of businesses, he explains, are recognising that building, maintaining and operating IT infrastructure is not a core competency. Worse, it can absorb a disproportionate amount of management time, operating budget, and capital expenditure – all of which can more profitably be deployed elsewhere.
“Businesses understand that they definitely need what IT can give them – enterprise applications, e-mail, Internet, EDI and web services. But owning and operating it themselves is a distraction, and an expensive one at that,” he points out. “Outsource it to a specialist provider on a payas- you-go basis, and you free up a lot of cash, management time, and capital expenditure budget – all of which can be deployed more strategically in growing the business.”
Back at AGA, head of IT Hassan couldn’t agree more.
“IT must add value to business processes rather than focusing on infrastructure issues,” he stresses. “By appointing Star as our network services provider we have been able to outsource the delivery of network infrastructure, including our firewall and VPN. The consequence has been a vast increase in service availability and performance, as well as a huge reduction in service costs, helping my team to concentrate on more strategic technology matters.”
About Star
Star is a Cloud provider with vision and a passion for delivering extraordinary results, with the smartest people and the sharpest service.
Since its foundation in 1995, the Star name has been synonymous with innovation. Having pioneered cloud-based Internet security with the formation of MessageLabs, Star has continued to consolidate its status as a leading managed business services company.
Playing to the strengths within its business and the select industry partners it collaborates with; Star has been able to redefine how businesses access IT, how they derive value and how they approach the future.
www.star.co.uk, 0800 138 4443
Hidden powerhouses
Consequently, adds Watson, Star sees itself playing a pivotal role in helping to unlock the full potential of those medium-sized British businesses that the CBI has recently described as ‘future champions’. Particularly at the smaller end of the scale – businesses with under £100 million in revenues – these companies make a tremendous contribution to the UK’s economy, comprising just 1% of firms, yet accounting for 22% of economic revenue, and 16% of total employment.
Yet unlike in other economies, he points out, the UK’s medium-sized businesses are competing with one hand tied behind their backs, with just 6% of firms accounting for 60% of job creation, and 65% of firms able to deliver an employment growth of only 1%.
“According to the CBI, the contribution made by medium-sized businesses to the British economy has been overlooked and misunderstood by government and the City. But if the UK could only create the conditions which have allowed medium-sized businesses to flourish in other countries, this would enable our own mid-market to play a vital role in transforming UK economic growth over the next ten years, contributing as much as £50 billion to the economy by 2020, and creating job opportunities all over the UK.”
Clearly, then, the opportunity to unlock scarce management time, operating cash and capital expenditure ought to be a welcome opportunity for these British medium-sized manufacturers to realise their ambitions for growth, and compete more effectively in global markets. And yet, says Andrew Morris, Star’s head of solutions marketing, it turns out that these companies are often ill-served by the mainstream IT service provider industry, who see them as too small to bother with.
“Medium-sized businesses are massively under-served in the world of IT,” he asserts. “The big vendors are highly adept at serving the world of the large enterprise, while smaller businesses can make use of the wealth of services such as Google Apps, Dropbox, and Salesforce.com. In the middle, there’s a gap.”
Sweet spot
In short, what’s lacking are enterprise-grade offerings for medium-sized businesses – offerings that are robust and reliable enough for manufacturers to be able to genuinely leverage them to reduce costs, without risk.
“What we do at Star is to address the middle ground of medium-sized businesses who require enterprise-grade private cloud services that are easy to use and pay for, providing them with IT capabilities that have typically only been available to the very largest enterprises,” sums up Watson.
“Medium-sized businesses are massively under-served in the world of IT” – Andrew Morris, Head of Solutions Marketing, Star
And having taken the step, he notes, the potential is there to do much more than simply cut costs, and free up operating cash and capital expenditure. With an in-house IT infrastructure, he points out, it’s often the case that IT decision processes requiring capital expenditure are lengthy and torturous, requiring careful evaluation – which slows down a business’s speed of innovation. But move the relevant infrastructure to the cloud, and both the costs and risks are lower.
“You can start up a new enterprise application project ‘on the fly’, to see how it performs, and what the benefits might be – particularly with ‘Software as a Service’ applications that are purchased through a monthly subscription,” he notes. “You’re up and running far quicker, at a lower cost than an outright licence purchase, and if it doesn’t work out you can cancel the subscription, and haven’t committed to costly hardware investments.”
In short, as AGA Rangemaster found, moving to the cloud can bring definite benefits – delivering a business that is more flexible and innovative, while freeing-up cash, capital expenditure and management time for more strategic matters. What’s not to like?
“Not much,” sums up Watson. “For ambitious medium-sized British manufacturers, the cloud can help them reach new heights”.
