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Telstra targets SMEs in next cloud push

‘Small’ means you have a spare hundred a month or more

Internet Security Threat Report 2014

While some providers are looking to free trials to get businesses, particularly small ones, to try out the cloud, there’s no such pussyfooting around from Telstra: it’s launched a small business cloud service that ranges upwards from $AU200 per month.

The Telstra cloud entry level pricing will get you two CPUs, 4 GB of RAM, 100 GB of storage and 40 GB of traffic to and from your personal cloud. And, in a move that’s sure to cause at least some market confusion in a market that’s still unsure what “cloud” actually means, each of these (except traffic) is qualified by time.

The time allowance is slightly greater than the hours in a month. For example, the dual CPU option’s allowance of 1,500 CPU hours per month compares to 744 “real” hours in a month – which means running two CPUs 24 x 7 for each month would see the user only consume 1,488 CPU hours. RAM and disk allowances are similarly over-provisioned.

Telstra’s top plan of $AU4,000 per month provides 32 CPUs (24,000 CPU-hours per month), 64 GB of RAM (48,000 GB-hours) and 3.36 TB (2.5 million GB-hours), and 2 TB of throughput.

All of these are Windows-based servers; Linux is offered on the pay-as-you-go plans, which is available starting at five cents per hour of CPU time with 1 GB of RAM, ramping up to $2.24 per hour for four CPUs and 32 GB of RAM. Storage is priced at $AU0.0003 per GB-hour, access is $AU1 per GB, and public IP addresses are $0.003 per hour.

Add-ons differ depending on whether the customer is running on the Windows or Linux platform. Windows users can also enable a secure Microsoft Web gateway at $AU90 per CPU, Office is either $AU22 per user or $AU30 per user (standard or professional), Windows Remote Desktop costs $8 per user, and there’s a range of SQL Server offerings from $AU0.75 per server, per hour for the Enterprise edition up to $105 per CPU, per month for the Workgroup edition.

Comment: While ostensibly targeting small-to-medium enterprises, the price book looks to The Register too high to attract the small business. To get running – along with Microsoft Office (standard edition) – is an entry price of $100 per month plus the per-user price of the software license.

This doesn’t count the other extras that the intended target might overlook or decide not to add to their bill – like the $AU50 setup plus six cents per hour fee for the firewall, the cost of connections, data import fees and the like.

There’s a good reason cloud providers have fallen in love with attracting the small business customer: there are around 800,000 operating SMEs in Australia (in this, I am counting only the “employing businesses”, so don’t bother correcting me with the couple of million that’s often bandied about).

Almost the entire Australian IT industry wants to imprint itself on the small business in some way or other, and unfortunately, almost the entire IT industry looks nothing like the small businesses they think they’re crafting products for.

I can’t see “the cloud” causing excitement among any of the non-IT businesses in the country – that is, most of those 800,000 SMEs – because they’re already disillusioned with the IT industry.

They’ve been promised a business revolution if they would embrace the world of search marketing, only to find that they have to waste their evenings trying to keep their content “fresh” for Google. They’ve been promised more hits if they sign on with overpriced Web marketing “services”, which in general don’t offer any kind of service beyond the ability for the customer to self-edit their listing.

I don’t suppose this counts as a comprehensive list of the ways in which the IT industry misunderstands its customers, but it will do for a start.

In that sense, the Telstra cloud offering looks like it suffers the same failings. It satisfies the people who demand products be designed to research, but pitches way over the heads of most SMEs, both in price and in its seeming complexity.

And as much as we might try to sell the right buzzwords – like cost of ownership – to the SME, it doesn’t wash. They feel the $100 per month straight away, not as a saving in a notional budget, but as a sting in the pocket.

So it will be interesting to see how many revisions the Telstra small business cloud strategy goes through over the next year or so, before either hitting its straps or being quietly shot behind the shed. ®

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