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Welcome to today's CIT Tech for Business podcast.

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Today we are sitting down with Chris and Kyle and we're going to discuss cloud versus on

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prem the smack down is what we're going to call it today.

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I'm going to kick it off by introducing the marketing gals on the podcast today but we're

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also going to ask you guys while you're introducing yourself tell us about your favorite cuisine.

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So I'm Tara one of the marketing gals that you'll receive all the emails from my favorite

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is my homemade shepherd's pie and Kelsey I'll kick it over to you.

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I was like dang girl that sounds good and I love the whole marketing gals term I'm here

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for it.

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I'm Kelsey one of the marketing gals favorite cuisine man I'm boring can we say that chocolate

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is a favorite cuisine because if so live it for it 100% but I'll pass the baton right

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on over to Chris.

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Thanks Kelsey well good morning everyone and I'm Chris Taylor one of the founders of CIT

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and for 28 years I led the organizations or present CEO until I handed the reins over

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to Kyle who will talk about his favorite cuisine next but I think my favorite cuisine is anything

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that has really good flavors right so I think you know I'm all about flavor I'm all about

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creativity and flavor and fusion of flavors so that's my my favorite cuisine.

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Kyle that's a big list.

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I'm Kyle as Chris mentioned I've been at the organization for 29 years I was the chief

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technical officer before Chris turned the reins over a couple years ago now the president

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and CEO from a cuisine side of it but like Chris I like flavors so Mexican pizza Italian

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you know those are those are go-to's for me big chipotle guys so we've done about five

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days a week a couple days of pizza there we go.

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Awesome I did want to kick it off so thank you guys for all sharing about that now I'm

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hungry because I did not have breakfast yet but I'll survive I got my coffee.

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Why don't you guys kind of start us off by telling us what's the difference between cloud

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versus on-prem those are two terms that we hear quite often but let's break those down

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first.

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Do you want me to take that one I can I can start that out I mean really now it's different

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to your on-prem means you're going to be having servers and systems within the walls of your

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business in some location could be potentially a data center but you own the systems that

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host your data you install and support the applications maybe have a contract vendor

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come in and access your systems to do some support on it but primarily you're in charge

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of hosting the actual compute power systems for for that data and system side of it with

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a cloud that means the provider of the application is actually hosting the actual hardware and

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systems at a time so the accessibility the internet the security around it those other

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components handled by a provider.

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Yeah and kind of just extend on that I mean I think our industry back and you know if

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you look through the mid to late 80s when the PC was introduced we moved towards client

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server computing right where we put a server in and we put PCs on the desktop and that

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was all pretty much on-premise because keep in mind back then the internet really didn't

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exist as a business tool yet so everything really had to go on-premise and we were we

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were transitioning from mini and mainframe to putting in this client server world deploying

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desktops and putting in servers now you know roll forward 30 plus years and we're and we're

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putting we're really driving where the application sits based on where if it's on-prem or in

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cloud and I think you know to we'll talk about this but I think the the application side

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is really driving that that on cloud or on-prem discussion and I think more and more in general

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are being moved to the cloud but it's funny to look back because if you look back 30 years

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ago there was applications like ADP payroll application that was already in the cloud

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but people really didn't think of it in the cloud it was just it lived there nobody really

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thought of it as a cloud app it was just a payroll app but it's been in the cloud as

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long as I can remember and that's kind of the drive of what's changed and where we're

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going today that it's really application driven yeah it was green screened back in the day

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I mean it was just a terminal you know with a motive dial up at at one point but yeah

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yeah I mean it's kind of come full circle again but you know I do think the application

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you know provider that is definitely the leading factor most application providers nowadays

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are you know eliminating their on-premise options and I think there's a lot of reasons

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for it you know from the support being the big part of it because it has been it is difficult

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to keep on-premise customers on the same versions from a support standpoint and to maintain

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a lot of versions of of the application going back and with the requirement now to have

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so many security updates and patches it's just gotten to be too big of a too big of

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a mountain for them to tackle for resources continuously go back and patch multiple versions

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of of their application so they want to support a consistent application across their customer

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base and the best way to do that is host themselves and there's obviously benefits for the for

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the customer at that point too because it's that security is a big part of it real big

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part of it yeah and I think you know just one of the first questions I asked when we're

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talking clients about that discussion around cloud versus on-prem and you know what's right

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is you know what it what are those core business applications and where where do they live

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today what what's the future of them what's the manufacturer doing with them and if you

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look at our industry especially in the last five years most of those manufacturers of

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those primary business line of applications are providing them as a cloud-based app for

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all the reasons Kyle has talked about you know control of code control of versioning

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control of upgrades control of security so you know I think the biggest and and and

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probably our biggest transitional product that over the last 10 years has been the migration

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of the Microsoft platform to the Microsoft cloud right it's an easy example right to

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to host your email on-premise became expensive and difficult and it was labor-intensive so

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Microsoft really developed the platform to allow us to move that that application right

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strictly email but then they along with that they gave us all kinds of other things we

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can do so that's probably the easiest right but it is a change because you know like how

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talk to this to some degree we're moving our cost from you know kind of capital cost buying

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gear putting it in the server room wherever it may be to now we're moving to subscription

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to operational costs where it's it's monthly or annual subscription based we really don't

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own any that year we don't have the capital expenditure but we do have that longer term

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operating expense and subscription based and maybe you can add more to that but it's transitional

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of how you pay for it yeah you know that operational move and that covers you know across the whole

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use cloud that's typically comes with it there you're moving from capital expense to operational

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expense Chris mentioned whether you pay annually or monthly and it's always you know seat based

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licensing typically you're going to have a headcount you have a user they have associated

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license with their product and services they use which again is is a little different the

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on-premise side of it would have some version but typically you just you'd either you could

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do per device or per seat and you could do some troops with an annually side of it so

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you know you had a little more freedom with your license on-premise across a lot of applications

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on-side of it so it was a certainly a little more easier to work but you know we did also

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see some concerns with that come up over the years between software audits and different

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things that come up that you would find that customers would fall behind on licensing or

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they didn't really know what they had for licensing really became a great unknown and

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they would be audited and in some cases a really bad surprise of what they would owe

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in what could be very expensive licensing because the product didn't stop you but you

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could definitely be out of compliance and legally you'd have to true that up yeah and

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the other piece that that really I think drove a lot of cloud expansion especially in the

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last two years if you look at the pandemic and you look at the workload shift from moving

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a lot of workload from in-office personnel to remote or home workers those cloud applications

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were fairly easy to just turn over and connect to the cloud the on-premise gear was a little

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more difficult to move everyone remote and get remote access to all that with the security

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so I think that the last you know we'll call two and a half three years now really even

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pushed harder on that cloud-based experience because the mobility of it right it's very

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easy to attach to that wherever you are if you're mobile if you're at home you're working

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remote or you're in the office the experience is pretty much the same which is which is

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really good for a user experience right because in the old days when we had to design these

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systems to remote access and it was cumbersome and the experience for the users wasn't as

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good now as the manufacturers build out these cloud apps for that specific purpose of remote

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access and cloud access the experience is really good so that's another thing we talk

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about yeah that that the last few years I mean that's exactly right last few years but

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huge on that I mean you had to adopt to be able to work outside the office because while

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we had no choice and if your if your systems were all internal or percent of them at least

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you had to have some kind of VPN to connect into those systems to do that some secure

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method and that brought its own challenges to many customers VPN has overhead it introduces

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some performance related issues and in scalability I mean a lot of customer systems really meant

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to have X you know a few number of users working outside the office so they weren't scaled

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to have the entire organization come in so we ran a lot of scaling challenges that had

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to be adjusted very quickly there in that side but those customers that key systems

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outside there are you know they were already acting externally for everything so Chris's

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point it was it was a lot easier transition so that's made a lot of customers I think

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look at that oh and you know we really need to be able to stand as if it comes again because

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it's all fresh of mind right now people are you know we had to go home again for period

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on if you know somewhere to come up again you'd want to be able to not have that problem

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yeah you need to look at the other thing to look at and I think a lot of people thought

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about is you look at our traditional voice our traditional telephones in our voice world

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right that that was always a very typical premise based platform and then you know let's

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say 10 years ago we really started to see more and more cloud offerings for that traditional

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telephone business service right and today I think a lot of people don't really understand

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that they're running on a cloud phone system and they have been for a number of years so

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I think transitions happened in the background to the cloud and some users really don't even

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understand that they're running in the cloud and and there again that transition when that

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user went to work remote the transition for the phone system just followed them just like

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the rest of their apps that were in the cloud so really good business you know experience

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there and I think you know it's made that that cloud acceptance much more adaptable

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I think the biggest challenges we have are what do you do with the legacy stuff how do

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you handle stuff that really just isn't cloud enabled isn't cloud ready what do you do with

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it right because if you were a new business starting from scratch day I think it would

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be fairly easy to put it all in the cloud but now we've got businesses that have been

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running technology for 30 plus years and it's a bunch of different legacy product that may

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or may not be cloud available so we have to help them blend what we call hybrid environments

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where it's still some premise based stuff but the majority of the move is to cloud yeah

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yeah that's a very good point there's not for many customers it doesn't just happen

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you know just make a switch over a week and you're in the cloud typically if you're small

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and you're nimble as Chris mentioned you can find cloud applications pretty easy and certainly

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on a startup but you know there's tremendous ways I don't think it's been any easier to

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start a business than it is in in 2022 you can literally have a very robust business

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set of applications and those things without any you know upfront investment you just start

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paying monthly fees and away you go so you can have tremendous power and you know but

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when you have legacy system sides I mean to put those into cloud systems like Azure AWS

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you know our ways you can make some inroads to move those to cloud platforms you know

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kind of extend your corporate infrastructure to those cloud platforms that gives you some

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of the cloud security cloud scalability of those platforms without having to build out

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data center or physical security and power and uptime side of it many of those legacy

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systems were predicated being close to it so you have to bring in some kind of remote

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desktop technology like you know RDS from Microsoft or virtual desktop solutions of

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those things where you're connected to that desktop and then access those applications

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you know we still definitely deal with that because it takes time I mean substantial investments

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in those platforms for a lot of customers and it just takes a lot of time you know so

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many cases we work with the customers to just plan the transitional because again you know

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just the want to move doesn't mean you're ready to move so you can it takes planning

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in many cases it goes back to that first point your applications when your applications are

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ready when their provider says that they could move you for that application or you rewrite

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it then you can potentially be all cloud but for many customers that's a long road.

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And on the flip side of that you know that old legacy premise stuff there are new apps

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that are developed now that are only cloud enabled right you really can't install them

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locally anymore on a premise based platform so to some degree I don't think it's a choice

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anymore it's really look at the applications we what's best for the business what's best

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for the business line of business applications and then based on those applications and their

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availability is going to drive you know if it's more cloud if it's more prem based but

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if we look forward future wise more and more that is moving to cloud cloud based platform

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for all the reasons we've been discussing but the migration and move is to more cloud

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more cloud more cloud but that puts you know that puts you know a lot of pressure on some

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of the other components of the network right so connectivity becomes a huge thing endpoint

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management and connectivity and redundancy become that much more important right because

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if you're a business and you've started and you all your applications are in the cloud

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and you're running on a single non-business grade internet connection that internet connection

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goes down you've just lost access to all your core business functionality so now we have

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to shift a lot of our conversation around connectivity redundancy reliability and performance

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of those public connections because they are now even more important and to even make it

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more important if they've moved their phone system to the cloud not only do they lose

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access to their primary core data applications they've lost access to their phones so connectivity

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and redundancy has become even more of a hot topic than it was yeah and we've seen that

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I think even more you know the biggest vertical I see that in schools you know schools have

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made that transition most schools now are pretty much a hundred percent cloud on their

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applications and we spend work with them on you know tremendous amount and very very robust

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infrastructure you know they have they have very fast you know internet connections redundant

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internet connections you know redundant Wi-Fi you know there's redundancies throughout that

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that's first point you need to be able to access that for them to be able to teach the

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students I think that's a tremendous use case where it's leveraging both those examples

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you know to the fullest you know schools have done a remarkable job of doing that and then

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you know through that pandemic side of them you know they all do education outside the

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walls of the school you know the kids needed internet to be able to get to it you know

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the other component that that layers on there's the security of it you know security is obviously

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a big discussion side of it and that's the other investment that needs to be looked at

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strongly because not only do you have to take in account the security of what used to be

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you know on premise side of it where you just put a firewall in you know and you had your

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endpoint protection and and that was considered you know ample security do your patches and

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go through it well now you have all these access points to your data across these cloud

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systems so you have to take a very unified approach and look at single sign-on solutions

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and other component sides of it where you can unify your usernames and passwords through

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products like octa or you know Active Directory or Azure AD should call it into those areas

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and bring in multi-factor and bring in conditional access where you can geofence say you can't

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log in say outside the United States or in certain locations you only allow geographically

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to log in and access there's all these other controls you want to take into account because

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the only thing that's predicated for the core requirement for cloud is internet access the

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internet's global so you have to you know the the threat actors are able to potentially

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gain access to that data without having to break through a firewall in this case you

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know that you traditionally think to get to your on-premise systems so you have to have

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other other ways to measure and protect your data within those cloud platforms yeah like

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I mentioned that mean it really puts pressure on identity management access control you

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know who are you where are you how do you gain access is is it you right how do we know

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it's you if we're all out remote we're all in the cloud how do we know it's you on the

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other end of the device so that puts a lot more pressure on the security of identity

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management access control multi-factor authentication so we have some challenge of is it you is

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it really you out there and that's that's some of what Kyle's talking about is how do

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you do that with all these varied cloud applications that are all over you really need to put the

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kind of that unified platform in place to help manage that those functions so it's just

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shifted you know really the the old you know on-premise client server into more of a global

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access technology in the cloud and how do you manage how do you secure how do you get

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redundancy and performance things like that become more top of mind yeah it used to be

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with that identity management you know Active Directory has been the legacy one for for

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the last number of decades sides of it and it was even Nobel then before that side of

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it but it we know where is your source source of truth where your users their information

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at and really it's starting to see you know the you know I let's call it kind of this

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the beginning of the death of Active Directory side is starting to occurring in Microsoft's

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roadmap side of it where the legacy Active Directory has started to you know it has been

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that on-premise location for your usernames and passwords and systems but from a security

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standpoint it is plagued because its legacy with a tremendous amount of security holes

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you know and it's being compromised consistently with privilege of escalation techniques and

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other sides of it if they gain access to a device that's within the Active Directory

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they will be able to get privilege escalation and get administration access through you

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know hundreds of potential vulnerabilities you know sometimes thousands if they're old

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enough it's a it's a big it's a big thing to try to try to mitigate from a security

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person standpoint and it's been a problem and continues to evolve so you know the answer

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to that is start to modernize that and that's your as your Active Directory it's your octets

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those other you know those other places where those identities can go and they have more

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modern approaches that are again cloud-based and have modern security they don't have to

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have the legacy side that Active Directory is carried forward you know and that's usually

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what plagues legacy systems is they have to support so many far back you know the fact

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that they're doing that also introduces a lot of issues too so it's the planning through

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that and how do you make these transitions and how do you continuously grow you know

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that we have to work with customers to say how do you start moving forward because you

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just can't flip the switch and say we're moving over to Azure AD or octet it's a it's a process

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and it takes time but you know it's something that you can get there you just have to start

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planning for it and give yourself a give yourself a runway to get there.

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I know we're coming somewhat up on our time here Tara and Kelsey but did you have other

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specific things you want to talk about regarding the you know is premise the solutions cloud

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the solution are there other specific things that that you have on kind of your task list

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that you wanted us to discuss them?

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Yeah that's a great question Chris one of the things I did want to talk about is what

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these Microsoft subscriptions that we were talking about monthly and annually how do

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we ensure that our customers are up to date on any end of life or end of operating systems

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tell me a little bit about what those subscriptions help with.

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Why I think anytime you move from you know keep in mind originally we would just buy

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the license and we would sit on the device and that we would kind of it was kind of up

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to the user to say oh it's coming into life or we need to upgrade it or we need to change

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operating system when you move to subscription based most all those subscriptions are going

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to require you now to stay up and current because they're going to discontinue supporting

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the older subscription version you're on so it does help with that management of those

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you know versions and that's quite frankly I think one of Microsoft's goals is because

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for them to support all these different various versions of OS and products is very very difficult

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but if they can subscribe you and they can make you stay fairly current it helps all

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of us from a support ability and they're helping us manage you know when it's going into life

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so in that subscription model it's a lot easier to help with that legacy management of versioning.

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Yeah that's you know there was a period of time we dealt with a lot of what was called

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that OEM license or what you bought with the computer stayed with the computer when you

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ordered it and you know the advent of the subscription side really really eliminated

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the problem from that because what would happen is is your version of Office was always as

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old as the computer and that was the version of Office you had so you have many customers

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with you know kind of a tossed salad of Office versions from you know multiple year side

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of it could cross a five to six year or more span of different Office versions and now

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it's descriptions because everybody's on the same version it'll automatically stream and

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everybody stays up to date automatically so you know it really has helped you know from

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a network administration standpoint of you know knowing that everybody's on the same

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version and if you're trying to share an Excel file you don't deal with the compatibility

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problems you know so there has been a huge problem eliminated with the advent of that

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for the customers that made the shift and for us it's a high percent of them I mean

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we don't have too many customers that aren't using a subscription license in some form

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of their for their Microsoft Office at least and even if they still have exchange on premise

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that component is subscribed now and it's it's eliminated a lot of support problems.

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I think it's been one of the biggest advantages of the Microsoft 365 platform is that Office

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version control right I mean I think if we look back 10 years ago plus when we were buying

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like Kyle mentioned licenses right we were buying them with the PC or we're buying an

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open license for our company that didn't force us to keep up to date right all it did is

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we bought volume licensing on but what we were challenged with is customers had multiple

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versions of Office which led to Kyle's point about different versions of Word documents

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and Excel spreadsheets and you know the one of the huge advantages of Microsoft 365 is

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made everyone consistent right we're all running the same product we're all running the same

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version that compatibility that we used to deal with 10 years ago has really gone away

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and that's now that's now pushed itself through the whole Microsoft platform so Microsoft

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even if you're going to continue to run some of their product on an on-premise basis it's

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still subscription based and they're still saying hey in order to keep your subscription

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going that platform is going to have to be updated or else it's going to go end the life

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and it's not going to be supported right so they've moved pretty much their whole platform

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to that model even if you're going to run it still on-premise which is great it's easier

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to manage for us for sure.

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Even the Windows OS itself is moving in that direction has moved with these feature updates

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so that aside to that I mean they no longer want to have they don't want to revisit the

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XP problem where people stayed on Windows XP for for 15 years it you know that that

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stayed on so long they want to be able to move the operating system along from the

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supportability and security of it so you know even the transition even though they call

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it say Windows 11 it's still a it's still Windows 10 it's the same core just continuously

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refreshed through there with a little different UI refresh on it but you know the the streaming

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and operational side of that that's they're doing the same thing with the Windows OS at

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this point too and they're bringing in the Windows licensing into their Microsoft 365

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licensing so you get you know enterprise licensing as part of your subscription which gives you

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all kinds of additional security and additional you know business-based access capabilities

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and it's you know I think it's great it allows you to have consistency across that OS as

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well it's been another another challenge.

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What else Tara?

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Well I was just getting ready to say let's kind of wrap that up you know if you guys

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want to talk about some key takeaways about this discussion today we'll kind of kick that

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off and wrap her up and we'll let everybody get back to their day.

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Yeah I mean I think the key things we talked about it's really application driven you know

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where are your prime business logic applications right are they cloud enabled already do you

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have cloud access so look at the applications we know where is it best to be housed and

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supported as we go forward right and then and then how do we deal with our legacy stuff

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you know have a plan for that it is the migration path from the manufacturer that's moving to

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cloud so and then understand supportability around it right how do we support you know

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how do we support that hybrid environment we still have some premise based stuff but

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we maybe don't need all of our you know IT support on the premise based stuff we need

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to move that more to cloud-based support so I think look at the application understand

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your current infrastructure and application and then have a good roadmap to you know what

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does that cloud integration look how do we move workload to the cloud and does it make

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sense yeah yeah I think I think that's start having the plan you know work with your application

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vendors understand those know where know where they're going with their application base

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or understand are they going to end a life your applications things like great planes

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for example have you know approach end-of-life side of it so you know Microsoft has dynamics

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in the cloud at their business central your customers look at net suite there's all kinds

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of things you start to start having those planning processes and those will be your

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be your your your leaders into making some of these transitions if you're still on prem

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with exchange you know that may not necessarily be wrong but you know consider some of the

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other benefits sides of it map those out you know if 365 is something you need to get through

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we understand customers have made capital investment into infrastructure and systems

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and licensing you want to be able to to maximize those investments but you know make the plan

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so the next you know upgrade around make sure you do the assessment look at the at the full

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value state where it's at before you just reinvest into it as well and then the Chris's

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earlier comment you know invest in that infrastructure you know and continue to prep yourself for

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you know things like redundant internet redundant firewalls you know build a robust infrastructure

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if you're going to have those things in the cloud you know don't don't overlook those

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those key variable sides with it and the only last point I you know we didn't I didn't get

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into the conversation side with it one one other distinct benefit we've seen with the

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accessibility of cloud applications has been the ability for people to work anywhere any

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place which does open up hiring opportunities for companies to be able to open open up hiring

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you know not they don't have to travel to your office they don't have to be within driving

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distance of your office either so you know and then this tough job market it does provide

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some other key benefits there too.

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Yeah and we didn't spend a lot of time about the the capex opex and the budgeting and the

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cost side of it I think there is still some confusion on you know total cost of of cloud

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versus prem and I think and I think if you look at it from a holistic 50,000 foot view

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I don't think either is any cheaper than the other it's understanding it's a different

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cost model and I think there is efficiencies to moving workload to the cloud when you take

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in total cost of operating that platform and I think that's one of those bigger benefits

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but some of our clients will look at it say well I bought it I own it I can run it as

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long as I want I don't have to pay subscription forever but when we start to walk through

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total cost of all that and supportability it does really shift that conversation that

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yeah it probably makes more sense to move to more cloud-based subscription based and

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have a predictable cost versus this variable cost over time so I think understanding capex

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opex and total cost operate are key pieces that we didn't spend a lot of time but it

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doesn't need to be talked about and put into that budgeting process so.

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Yeah we could probably talk about our on that one.

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That might be a whole other podcast about that capex opex and total cost.

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I would concur with Chris I think when it's all said and done when we run the comparison

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I think when you take total cost in there you're going to find you know there isn't

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much of a cost delta side of it and you can bring in so many other you know soft cost

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components into the discussion side of it that you need to really take into account

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that you know I wouldn't let that be the term there because it's just far more than the

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initial this is why I pay for the license this is what I paid to purchase that's the

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difference you need to take more into account there's far more there to take an account

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I think you look at holistically there's that that's not enough to deter anybody from moving.

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Yeah that could be a whole other podcast here talking about cost.

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For sure.

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For sure.

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I love that I know Kelsey and I are going to be like feverishly writing down we got

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lots of podcasts coming here just out of this discussion today but thanks again Chris and Kyle

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really do appreciate you taking time to talk through our subject on cloud versus from the

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smackdown as always you know we love to talk about technology so please let us know of any feedback

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or any additional topics you guys would like to hear us talk about you can visit our website

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which is cit-net.com backslash podcast or you can send us an email at info at cit-net.com and we

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certainly look forward to chatting with you guys more next week have a great day.

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Thanks everyone.