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Everything is moving to the cloud – understand cloud licensing

The cloud lives in huge data centers scattered around the world.

I recently re-watched the second episode of Spilling the IT, in which Adam Burke, Quest’s Vice President for Sales and Partnerships, talked about cloud services and licensing, and I’d like to expand on some ideas he brought up.

By the way, as I mentioned in my last blog post, if you haven’t seen the entertaining and informative Spilling the IT video series, I invite you to find it on the Quest Technology Management YouTube channel.

Early in the Cloud Services video, Adam mentioned something he’d seen—it might have been a bumper sticker or a tweet: “There is no such thing as the cloud. It’s just someone else’s computer.” That’s funny and also somewhat true, as long as you understand that “computer” to be a massive data center often connected to other massive data centers.

What we refer to as the cloud has grown dramatically in just the past few years, and that means bandwidth has increased exponentially. That’s one factor enabling more and more organizations to move their applications and even their entire IT infrastructure into the cloud.

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The cloud is enormous. The leading cloud service providers have experienced such explosive growth, cloud hosting has become core to their business.

Cisco famously predicted two years ago that global cloud data center traffic would reach almost 20 zettabytes (ZB) by 2021, up from 6 ZB in 2016. It seemed like a bold prediction at the time, but it would turn out to be true.

Software keeps evolving. Just as bandwidth has evolved rapidly in recent years, the software tools we use have become more powerful—and they’ve also become far more complex. As I hope most of you know, that means the software needs to be updated continually. So it can be a huge benefit to not have to worry about operating and maintaining updates, optimizations, patches, etc.

Software and cloud services licensing models. Some of you remember when everyone had software installed on all of our machines. If we bought Microsoft Office, we paid a license fee for every computer running those programs. That perpetual-license model has been replaced by a dozen different licensing models that might be based on usage, features, instances, or some other metric. The most common is a subscription-licensing model.

Now, with Microsoft 365, we pay a monthly subscription. It’s the same with Adobe products, such as Acrobat and Photoshop, and many other specialized business applications. (Again, because the bandwidth has grown so fast, these programs operating in the cloud run seamlessly.)

Follow the money. Most organizations are overspending on cloud services licensing. According to reports, up to 37% of cloud spend is wasted due to underutilization of the software and cloud services (shelfware) or overutilization of services resulting in noncompliance costs. We can help you navigate the new vendor licensing models as the industry moves away from on-premises models to cloud and Software as a Service (SaaS) approaches.

The cloud can improve business continuity. It’s easier and cheaper than ever to transport data from a local environment to a cloud environment that you can customize to keep your business data safe. And it is increasingly a competitive necessity.

In the same way that running our software in the cloud adds efficiencies and improves security, many organizations are finding it helpful to outsource the maintenance of the computing infrastructure upon which the software is operating.

So, how do you get to the cloud? In the Spilling the IT: Cloud Services video, Adam tells a story about a long-term client who showed him a cloud-provider’s proposal and told him the monthly charge the provider had quoted. Adam asked the client a question everyone should ask when looking to the cloud: “How are you planning on getting there?”

Our client had assumed the monthly fee he’d been quoted would cover the migration to the cloud environment. It did not. So beware: Because the cloud is creating so much value right now, it is surrounded by a lot of hype. Cloud service providers can be powerful allies, but they will not solve all your problems—and if you are considering a move to the cloud, we are always happy to help.

Contact us anytime about your technology needs.

Until next time,


Meet the Author
Tim Burke is the President and CEO of Quest. He has been at the helm for over 30 years.
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