Cloud Computing for Manufacturing (Save Money with Azure Cloud)

Cloud computing in manufacturing has become a hot topic in recent years. At Sabre IT Solutions, we receive numerous inquiries about IT cloud migration, with many businesses faced with the choice of either purchasing new hardware or migrating some of their infrastructure to the cloud. In this article, we’ll provide an overview of Microsoft Azure and how Sabre IT can help businesses leverage its benefits for their manufacturing operations.

One of the most popular cloud solutions available today is the Microsoft Azure Cloud, and at Sabre IT, we have extensive experience in Azure Cloud Migrations, particularly for running ERP systems for clients. When discussing cloud migration with customers, one of the first steps we recommend is to visit the Microsoft Azure website and use the Azure pricing calculator to get an idea of costs. However, this can be overwhelming for those without an IT background, with numerous complex terms and pricing options to navigate.

If you decide to proceed with cloud migration, you will be presented with a wide range of features and choices that are more complex than setting up a server in your office. Many businesses give up on the idea altogether as they struggle to justify the costs and time required to learn Azure. However, with the right guidance and support, the benefits of cloud computing for manufacturing can outweigh the initial challenges, making it a worthwhile investment for businesses looking to stay ahead of the game.

Azure Pricing Risk

Cloud computing for manufacturing can be a game-changer, but it’s important to keep an eye on costs. At Sabre IT, we understand the potential risks of using cloud services such as Microsoft Azure. While Azure is a popular choice for cloud computing in manufacturing industry, it’s important to be aware of potential pitfalls.

One such pitfall is the risk of unexpected charges. For example, it’s not uncommon for businesses to overlook extra charges for backups or blob storage. Even shutting down an Azure server won’t necessarily stop these charges, which can add up over time.

At Sabre IT, we advise our clients to carefully monitor their Azure usage and to make sure they fully understand the costs associated with cloud computing for manufacturing. Here at Sabre IT, we get some Azure credits from Microsoft, and we spun up a “test” system to play with. At some point, we exceeded our credits, so we put a Credit Card in and were paying extra for the extra servers. Eventually, we shut them down and didn’t pay too much attention.

After several months, accounting wanted to know what this “extra” Azure charge was on our credit card.  It was about $200 a month. It took a while to dig into, but it turns out that even deleting an Azure server won’t necessarily remove all the fees. There are backups that might be left behind, blob storage, or any of a number of other fees. Shutting down a server by itself won’t stop the charges. You need to “deallocate” it – and it is easy to miss.

If you take on Azure, you own it. You break it, you pay for it. Sometimes it is not worth the risk.

5 Reasons for Migrating to Cloud Computing in Manufacturing

Let’s look at 5 reasons you should consider an Azure Cloud Migration.

1. Scalability: With Cloud Servers, if you need a new server or more memory, you aren’t going to need new hardware. If your server can’t handle more RAM modules (or as happened to us recently, requires a slightly different set than you bought) then you just click a few buttons, restart the server, and voila. If you need a new server, you spin it up. You never have to worry about upgrading or maintaining hardware. Your server “compute” power becomes a utility bill, just like Hydro or Gas.
2. Affordability: Azure definitely can be affordable for larger businesses. If you have looked at Microsoft Azure cloud pricing, you are probably thinking “this seems expensive.” The Azure pricing model scales best when you have a larger infrastructure and can afford to “reserve” (ie: commit) to the system. Sabre IT helps with this by hosting an Azure Datacenter of our own – with drastically lower costs.
3. Accessibility: Azure is up 24/7, and is managed and monitored every day by a team of network nerds who make sure it is working. You can always access it. There are redundant power backups, redundant equipment backups, and redundant internet connections. It’s sitting behind a gazillion Mb speed internet (it’s a LOT faster than your existing servers), Azure is not going to go down, and it will give anyone from anywhere the absolute fastest connection they can get.
4. Setup Ease: Azure servers are built with templates that are basically ready to go. You want a Windows 2019 server with 4 cores and 16 GB of Ram, with Windows installed and patched. Give me 10 minutes. That’s not as easy to do unless you’ve spent the time to create the templates yourself.  It means that if you are hiring a 3rd party to set up the server, they should never be billing you for a half day or more to get that server ready for you.
5. Choice: Azure offers a lot of choices to the end user and IT manager, more than your on-premise servers can possibly offer. You can run different operating systems, different versions and variations; can run Windows 10 virtually (meaning you can use a Chromebook for instance but have Windows 10 running full screen just like a real PC), and can even run SolidWorks or Adobe Premier on Azure virtual machines. It is designed to give you the choice and flexibility that a regular small business IT environment can’t afford.

IT Cloud Migration is Inevitable

According to a 2018 study of SMBs (small and medium businesses) by Microsoft, 78% of those businesses expected to adopt some kind of cloud by now. We are seeing this in Office 365; Cloud ERP systems (like the Microsoft Dynamics 365 Business Central cloud ERP which is sold by our sister company Sabre Limited); Salesforce or Dynamics CRM; Cloud backup and storage just to name a few.

Your IT system is made up of 2 core parts. The hardware infrastructure that runs your desktops, laptops, routers, firewalls, and critically the servers. For a small business, a Microsoft Azure cloud migration is going to primarily migrate your servers to the cloud.  We all know that the laptops (and fewer and fewer, desktops) that we use today are mobile. Even before COVID-19, there was a rise in remote working, and certainly, people travelling and using their devices outside the office.

As your teams move more and more to work away from the office, the benefits of having your servers actually at the office become much less. In fact, it starts to become a critical point of failure having this critical infrastructure at work.

What is the Microsoft Azure Cloud?

Azure is a service from Microsoft that “rents” computing capabilities under a utility model. Basically, it’s like paying for computer power like your pay for electricity on a monthly bill. Essentially, Microsoft is renting you the CPUs, memory, hard drives, and network hardware rather than you buying it outright.  This is called infrastructure-as-a-service or IaaS to IT nerds.

It lets even small businesses access powerful computing power, storage, backups, security, and disaster recovery services like big enterprises typically have. The Microsoft Azure Cloud is designed for businesses that want the absolute best security and high-performance IT without laying out the massive upfront expense and ongoing maintenance.

Downtime Prevention is a Huge Benefit

One big benefit of an Azure Cloud Migration is downtime prevention. This is a bit hard to quantify, as you may not have any downtime for long runs. Until it happens there is no out-of-pocket cost.

Believe it or not, research says that the cost of system crashes in a small business average $400 dollars per minute! I think that’s a bit excessive, and their definition of small business probably had 400 or more employees. I use an average cost to a business for system downtime of $1 per minute per knowledge worker. So if you have 10 users that use their computer to do their job, and they lose access, it’s about $4500 a day. Basically $450 per employee per day.

This is the average, and it would include those cases where the downtime also resulted in lost work or failed backups.

You may think that is high, but your staff probably spend quite some time (weeks most likely) picking up the pieces of a system crash.

Backups and the server were trashed at a Cambridge, ON based service company due to a Cyber Attack. As a result, a staff member needed to rekey in 6 months of invoices into Quickbooks. They even had some accounts receivable that they may never be able to get back. This 5 user company paid a lot more than $2250 a day for the 4-5 days they were down.

Azure Cloud Cost Comparison to On-Premise Servers

Let’s say you need 4 servers, each averaging about 8 Gb of Ram, 500 GB of Hard Drive (SSD), and 2 CPU cores. Assuming you don’t factor anything for growth, we did a quick check on DELL to the price that out.  For a rack-mounted server with enough CPU Cores, 48GB of Ram, lots of hard drives, and a 5-year next business day warranty the price is about $20,000 after discounts. Add another $5000 for a UPS and a new switch and other ancillary costs. Installation is separate as you need that for either Azure or this server.

$25,000 for a new server. Spread over the 5 years at a 5% cost of money you get $471 a month. Add hydro, overhead, and insurance costs to the server and you might get to $500 a month. So the average hard cost of each virtual server is about $125 (remember, you need 4 servers).

I’ll add an estimate for patching and backup management (often called managed IT services). Whether you outsource or your own people do it, it costs about $75 a month per server. That’s $375 in this case (there are 5 servers total – the host + 4 victuals). For simplicity’s sake, I’ll add $75 to the cost of each.

Purchased Server vs Azure Server vs Sabre IT Azure Datacenter

With the Sabre IT Solutions Azure Datacenter, you’re taking advantage of our ability to purchase wholesale. The benefit to you is about a 37% cost savings over getting the same server (plus free management) from Microsoft directly. Even if you take out the management costs, the price is 20% below the Microsoft List price. We simplify the billing, you have no multi-year commitment and we have taken on the long-term commitment for Azure.

In this example, you’re paying $1 a day for the really fantastic features of Azure data centers. This is a no-brainer.

Here are a few examples of companies that should or do use Azure.

Case Study One – Running ERP in the Cloud

We had a customer in Woodstock, ON who recently purchased a new ERP system. A previous vendor sold them a server almost identical to the one I described above and had set up their virtual desktops. Trouble was, the new ERP needed a lot more server than they had bought. They looked at the possibility of upgrading it, but the hardware would not be able to handle the needs of the new system.  Adding this one additional Virtual server with 24 GB of Ram and enough hard drive space was going to require purchasing an entirely new server!

To add insult to injury, this was only going to be needed for about 2 years. Once the new ERP was up and running the old system could be scaled down or turned off.

With the Sabre IT Azure Datacenter, for about $360 a month (vs $550 with Microsoft), they could spin up a new server overnight. When the old ERP was more or less mothballed, they could shut off that server (which would have been a $300 machine) and pay a few dollars a month to archive it. They would only need to pay extra when they wanted it turned back on.

Azure adds a degree of flexibility that physical hardware just can’t manage.

Case Study Two – High Availability to End Users

We have a long-time customer in London, ON who hosts a custom web application for order entry. This isn’t something that can be hosted in the general “WordPress” type sites. They need to offer reliable 24/7 uptime to their customers, not a high availability like a “failover.” Hardware, hydro, internet, and firewalls need to be extremely reliable. The system can’t go off-line because their office had a storm and the power went down.

They host their server in the Sabre IT Azure Datacenter and have had zero downtime due to connectivity for more than 2 years. That is remarkable. There are (as there always are) a few issues with software configuration – but none with the hardware.

The Hybrid Azure Cloud

IT cloud migration often enters into the realm of hybrid cloud. Some businesses need to store part of their data on their local server. This is because performance and speed are needed for huge files like 3D CAD drawings. Microsoft is designed to connect Azure to your on-site servers, which is ideal for the hybrid cloud. You get the best of both worlds and tap into the powerful and secure Azure systems whenever you need, but keep data local when required.

Worry-Free Azure Cloud Migration from Sabre IT

Let Sabre IT Solutions worry about getting you to the cloud, and you can focus on running your business. Today, most customers don’t have time to worry about IT details or even managing their IT. Sabre IT Cloud Services team are experts with Microsoft Azure. As you can see, we are Azure wholesalers and as such can provide significant price benefits over the standard cloud. We can take care of every detail of your cloud migration, and provide you with clear, easy-to-understand pricing. Sabre IT has been hosting customers in the Azure cloud for over 5 years now. We understand how it can fit your business and offer our advice for free.

Give us a call at 226-336-6259 or contact us at itsales@sabrelimited.com today to learn more.