EFFECTIVE VOICEMAIL MARKETING

Let’s face it, like it or not our business lives are centered around technology.  From the e-mails we check each morning, to the texts we send to friends and associates, to the voicemails we listen to incessantly, if we’re going to successfully compete is this digital environment, we must ensure that our communications are up-to-date and our messages are noteworthy.

We all complain we no longer seem to talk to a human being when making a business call. Therefore, we must leave voicemails for existing customers as well as potential clients. While the computer on the other end of the line may sound efficient, personality is not key to a mechanical voice.  Therefore, it’s important that your live messages be engaging enough to warrant a callback.  Whether you’re cold calling, contacting a referral or returning a call from an interested prospect, remember that this is a valuable form of marketing, and your approach and delivery could make or break its effectiveness.  Here are some tips for leaving voicemail messages that will precipitate a follow-up call:

1.    Be quick and to the point. Your voicemail should never be longer than 30 seconds.  Make sure that your messages are focused and succinct.  This means you should probably practice before calling to ensure you don’t ramble and waste precious time.
2.    Time stamp it. Not everyone checks their voicemail regularly.  Leave the date and time you called so that the listener knows when the message was left.
3.    Keep the message in context. If you’ve met this individual before or have been referred by someone they know, you need to say so immediately.  If a cold call, stipulate the frame of reference by informing listeners that your services are useful to small business owners like them.
4.    Don’t give the store away. If you give the listener a complete pitch, they will have no reason to return your call.  Give a couple of “come ons”, but don’t give it all away; hint at bigger and better profitability, more useful information, etc.  Like a beautiful woman in an evening dress, leave something to the imagination.  Then the listeners will be intrigued enough to call you back.
5.    Provide contact information. Seems an easy concept, but sometimes we overlook providing enough contact information to enable the listener to get back with you.  Make it easy for them and leave your e-mail address or if you want total access, leave your cell number.  Make it as convenient for them (not you) as possible.
6.    Include a call to action. Like any other marketing technique, your voicemail must include a call to action.  Whether it’s a simple request to return your call or take advantage of a free consultation or limited time offer, a good message must end with solid instructions on what the prospect should do next.  You must verbally get across what the print ads usually say, “Call Today!”
7.    Smile when you speak. It’s important that you sound enthusiastic when leaving your message.  If you’re a morning person, record it then, if not, wait until you have your third cup of coffee!  In any case, sound enthusiastic without being overly solicitous.

Most of us think leaving a message is more an inconvenience than an opportunity.  While it’s not the most personal method of contact, a voicemail can be a great opportunity to peak a prospect’s interest in your services quickly and succinctly.  A little thought beforehand will go a long way.

Wolf Tracks: Protect Your Personal Information

July 2010
By Wayne Kinsey
INSCOM OPSEC

Nothing is more important than your personal information. If an adversary acquires enough of your personal information, they can use it to steal your identity, to present themselves as you to your friends, and to gather information that they can use against the national security interests of the nation.

One can find Personal Identity Information on numerous information systems. Security experts will say that the weakest link in any information system is the user. Why? It is easier to gather information from or about the user than it is to attack the system itself. Two examples of how adversaries might collect PII follow.

The U.S. Navy reported that certain cigarette manufacturers gave military members free packages of cigarettes after scanning a document, such as a Common Access Card or driver’s license, to verify the age of the recipient. These documents, however, contain PII, such as the individual’s social security number, birth date, address, and other personal details. CACs also contain sensitive information on PKI certificates that one uses to access government computer systems. Adversaries are always on the lookout for this type of data to use in attacking Department of Defense information systems. The stated purpose for scanning these documents was to verify the person’s age before giving them packages of cigarettes. However, was it really necessary to scan these documents and what happened with the information after the scan? Is the potential loss of PII worth two packs of cigarettes to an individual? One should know that the CAC should only be used in government facilities and one does not need to scan your driver’s license to verify your date of birth. Currently there are no indications that anyone has used the information gathered to the detriment of an individual or the government, but that is no guarantee that they won’t use it in the future.

Wikipedia describes social engineering as the manipulation of people to get them to act or divulge information for use against them or against information systems. The growth of social networking websites has increased the availability of information necessary for successful social engineering attacks. The information available from a CAC or driver’s license is a prime example of the type of information terrorists, criminals, predators and foreign intelligence services need for their social engineering endeavors.

Any of these adversaries can use information from a SNS to cause another individual to act or divulge information to their detriment or to the detriment of a government organization. To add to the problem, researchers have recently developed a program that automates a social engineering attack. The program tracks and correlates information users store in SNS. The programmers then use the gathered information to profile users and to get them to divulge still more information for future attacks. There are a number of other types of social engineering attacks, such as phishing, spear phishing and whaling that adversaries use to gather information to use against us.

Operations Security is a risk management program. Before allowing someone to scan your CAC, driver’s license, or other documentation, consider the risk of an unknown person having access to this information. When you post information on an SNS, be aware of how an adversary can use this information to the detriment of government departments and agencies. In other words, THINK OPSEC.

2010 Tax Changes; Individual

WHAT REMAINED THE SAME?

1. Social Security and Medicare

For 2010, the Medicare tax will remain at 1.45% while Social Security remains at 6.20%. The wage limit, or Social Security maximum, remains at $106,800.

2. Investment income amount

The maximum amount of investment income you can have and still get the credit is still $3,100 for 2010.

3. Retirement Account Contributions

No Changes

4. Energy Tax Credits

Extended through 12/31/10

WHAT HAS CHANGED?

1. Standard Deductions in 2010

In 2010, there was only one change to the standard deductions – the head of household standard deduction went up by $50. The deduction for all other taxpayers remained the same. The standard deductions that apply in 2010 include:

Single – $5,700
Married filing separately – $5,700
Head of household – $8,400
Married taxpayers filing jointly / qualifying widow(er)s – $11,400

2. The maximum amount of the credit has increased.

$3,050 if you have one qualifying child,
$5,036 if you have two qualifying children,
$5,666 if you have three or more qualifying children, or
$457 if you do not have a qualifying child.

3. Earned income amount increased.

You may be able to take the credit if:

You have three or more qualifying children and you earn less than $43,352 ($48,362 if married filing jointly),
You have two qualifying children and you earn less than $40,363 ($45,373 is married filing jointly),
You have one qualifying child and you earn less then $35,535 ($40,545 if married filing jointly), or
You do not have a qualifying child and you earn less then $13,460 ($18,470 if married filing jointly).

4. Mileage deduction rates (Decreased)

Category Rate

Business Miles 50.0 cents per mile
Charitable Services 14.0 cents per mile
Medical Travel 16.5 cents per mile

5. Lifetime Learning and Hope Credits

The maximum Hope Credit, available for the first two years of post-secondary education, has increased to $2,500. This includes 100% of qualifying tuition and related expense not in excess of $2,000 plus 25% of those expenses that do not exceed $4,000.

In 2010, the taxpayer’s modified adjusted gross income will be used to determine the reduction in the amount of the Hope Scholarship and Lifetime Learning Credits. Credit reductions start for taxpayers with an AGI in excess of $80,000, or $160,000 for those filing joint returns for the Hope Credit. The threshold for the Lifetime Learning Credit remains at $50,000, or $100,000 for those filing joint returns in 2010.

Are You Speaking to Your Clients or Past Them?

What is it you have to offer your clients? How do you differentiate yourself from other bookkeepers or accountants?
We are in the process of revamping our web site. Why, because we, along potential customers, found it hard to understand. More importantly, it was loaded with explanations of what we’re all about as opposed to what the clients’ needs are all about. It was intended as a way to persuade the potential client into doing business with us by illustrating the services we have to offer. In a rhetorical way, we presented a technical list of how we could customize functions for the client.
All we succeeded in doing was defeating our purpose and, while we got many hits to the web site, no one stayed long enough to contact us. After weeks of frustration, we determined why:
First, We were using our own accounting jargon, which the vast majority of our clients don’t understand (AP, GL, Balance Sheet, “Special Projects”, etc.) They have no idea what we are talking about, hate the subject, and worse yet, it doesn’t communicate a reason to stop doing it themselves, change accountants, or even to bother with it at all. ”We’ll wait until tax time,” or, “X does an OK job, why change?” Well we change comes to those who make it happen.
Second, we give them a laundry list of WHAT WE DO. But how we can add value to their business is ignored. In an effort to impress them with our knowledge, professionalism and experience, we explained HOW WE DO IT that made it sound complicated and way above their pay grade. Again, this defeats our purpose because it doesn’t communicate HOW WE ADD VALUE to the potential client. We showed a lack of interest in the needs of our potential clients: Instead of taking a proactive stance and finding out what they really want from us, we told them all about us and what we think they need.
We also found resistance to our “pricing.” If the client doesn’t know what you can do for them, they’ll comparison-shop and treat you as a commodity, just like any other bookkeeping “product” they can find online. We found more than a few of our potential clients tried to negotiate our prices down to get our rates as low as possible. Why, because our services provide nothing of particular value to them. They see us as a necessity, perhaps even a luxury. And like most luxuries, they can just as easily “make due.”
In summary, we have to project what unique VALUE we offer and what BENEFIT we provide. It is impossible to expect your clients will be willing to pay for your services if you are not crystal clear about what you’re worth to them and why they should choose you. A web site is just a tool. How we communicate to our clients and prospects depends on being able to be absolutely clear on what VALUE we bring to their business – how we can improve their earnings, image and productivity. Our goal is to master communicating that concept. Then, and only then, will we be the masters of our success.
What is it you have to offer your clients? How do you differentiate yourself from other bookkeepers or accountants?
We are in the process of revamping our web site. Why, because we, along potential customers, found it hard to understand. More importantly, it was loaded with explanations of what we’re all about as opposed to what the clients’ needs are all about. It was intended as a way to persuade the potential client into doing business with us by illustrating the services we have to offer. In a rhetorical way, we presented a technical list of how we could customize functions for the client.
All we succeeded in doing was defeating our purpose and, while we got many hits to the web site, no one stayed long enough to contact us. After weeks of frustration, we determined why:
First, We were using our own accounting jargon, which the vast majority of our clients don’t understand (AP, GL, Balance Sheet, “Special Projects”, etc.) They have no idea what we are talking about, hate the subject, and worse yet, it doesn’t communicate a reason to stop doing it themselves, change accountants, or even to bother with it at all. ”We’ll wait until tax time,” or, “X does an OK job, why change?” Well we change comes to those who make it happen.
Second, we give them a laundry list of WHAT WE DO. But how we can add value to their business is ignored. In an effort to impress them with our knowledge, professionalism and experience, we explained HOW WE DO IT that made it sound complicated and way above their pay grade. Again, this defeats our purpose because it doesn’t communicate HOW WE ADD VALUE to the potential client. We showed a lack of interest in the needs of our potential clients: Instead of taking a proactive stance and finding out what they really want from us, we told them all about us and what we think they need.
We also found resistance to our “pricing.” If the client doesn’t know what you can do for them, they’ll comparison-shop and treat you as a commodity, just like any other bookkeeping “product” they can find online. We found more than a few of our potential clients tried to negotiate our prices down to get our rates as low as possible. Why, because our services provide nothing of particular value to them. They see us as a necessity, perhaps even a luxury. And like most luxuries, they can just as easily “make due.”
In summary, we have to project what unique VALUE we offer and what BENEFIT we provide. It is impossible to expect your clients will be willing to pay for your services if you are not crystal clear about what you’re worth to them and why they should choose you. A web site is just a tool. How we communicate to our clients and prospects depends on being able to be absolutely clear on what VALUE we bring to their business – how we can improve their earnings, image and productivity. Our goal is to master communicating that concept. Then, and only then, will we be the masters of our success.

Customer Acceptance – Bending Resistance to Overcome Passivity

Faced with what is right, to leave it undone shows a lack of courage.
-Confucius

There is a reason why many corporations desire previous military experience. Most military and civilian police officers are trained in the methods of interrogation. There are great similarities between the interrogation process and the means by which a prospective customer is handled.
It may sound strange, but the prospect (customer) shouldn’t be allowed to talk much until late in the process. Then again, you shouldn’t be concerned with volunteering information about your product or service until the end of the process either.
So how do you begin? Certainly not by saying how great your service is or how different you are from the competition. That’s a given. So here are some techniques you can apply to the world of competitive marketing.
The widely-used Reid technique lays out nine steps guiding interrogation. Many of these steps overlap, and there is no such thing as a “typical” interrogation. For our purposes, the Reid technique provides a useful blueprint of how to develop means and methods to successfully integrate a customer into your business.
THE POSITIVE CONFRONTATION
Reflect the prospect’s words back by restating what he/she has said so they can see that you are hearing and understanding them. This is a good way to calm an aggressive personality and “buys you time.”
Make your point confidently and be direct. Do not stumble over your words and maintain direct eye contact. This way you communicate respect.
Remain calm no matter how anxious you are to make a sale or land a new client.
Explain why this transaction is important to the prospect and what you will or will not do to make it happen. Present options like, “if you continue to do this, this is what may or may not happen.” Be proactive, but not aggressive.
They’ve been through this before (probably many times) and may try to manipulate you and divert your attention away from the original conversation. You are in charge. To show that, you may have to repeat yourself to bring the focus back to the subject at hand. This may cause tension, but keep your focus.
State possible consequences of them not using your services or product, but NEVER threaten with a specific result. If the end result does not change, you will lose credibility. Use the word ‘may’ instead of ‘will’ when discussing consequences (“the IRS may fine you if you don’t manage your payroll properly.”)
THEME DEVELOPMENT
Theme development is about looking through the eyes of the prospect to figure out why he came to you, why he’d like to do business with you and what type of excuse might give him the out to leave. Does the prospect use any particular mode of reasoning more often than others? For example, does he seem willing to blame his previous accountant? You must lay out a theme, a story, that the prospect can latch on to in order to justify his being there, and you then observe the prospect to see if he likes the theme. Is he paying closer attention than before? Nodding his head? If so, continue to develop that theme; if not, he’ll pick a new theme and start over. Theme development is in the background throughout the sales process. When developing themes, speak in a soft, soothing, yet firm voice to appear non-threatening and to lull the prospect into a false sense of security.
HANDLING DENIAL
Letting the prospect deny his need to make the deal on-site will increase his confidence, so interrupt all denials, sometimes telling the prospect it’ll be his turn to talk in a moment, but right now, he needs to listen. From the start of the process of acceptance, watch for denials and stop the prospect before he can voice them. In addition to keeping the prospect’s confidence low, stopping denials also helps quiet the prospect so he doesn’t have a chance to ask too many questions. If there are no denials during theme development, take this as a positive indicator of susceptibility. If initial attempts at denial slow down or stop during theme development, you know you have found a good theme and that the prospect is getting closer to being integrated. To coin a phrase, “resistance is futile.”
OVERCOMING OBJECTIONS
Once you have fully developed a theme that the prospect can relate to, the prospect may offer logic-based objections as opposed to simple denials. ”I could never turn my back on my accountant, but my business is growing and I need help to make it profitable.” These objections give us information to use to turn the prospect into a customer. You might say something like, “See, that’s good, you’re telling me you would never deliberately turn your back on someone. But circumstances are sometimes out of your control. You understand continuing on this path will hurt your business.” If you do your job right, an objection ends up looking more like an admission by the customer of needing significant change.
THE PROSPECT LOSES RESOLVE
If the prospect’s body language indicates surrender, seize the opportunity to start leading the prospect into submission. He’ll start transitioning from theme development to alternatives that force the prospect to choose a reason why he should consummate the deal. At this stage, make every effort to establish eye contact with the prospect to increase the prospect’s stress level and desire to “get this over with.”
ALTERNATIVES
You must offer at least two contrasting motives for some aspect of the sale, sometimes beginning with a minor aspect so it’s less threatening to the prospect. One alternative is socially acceptable (“everybody has one”), and the other is morally repugnant (“you can’t let your employees down”). The integrator builds up the contrast between the two alternatives until the prospect gives an indicator of choosing one, like a nod of the head or increased signs of surrender. Then, things speed up.
BRINGING THE PROSPECT INTO THE CONVERSATION
Once the prospect chooses an alternative, the consummation has begun. Encourage the prospect to talk about the decision and arrange for at least two people to witness the consummation. One may be your assistant, sitting close by and another may be brought in for the purpose of forcing the prospect to confess to a new detective — Car dealers routinely do this (“let me get my manager”). Having to confess acquiescence to a new person increases the prospect’s stress level and his desire to just sign a contract and get out of there. Bringing a new person into the process also forces the prospect to reassert his socially acceptable reason for his decision, reinforcing the idea that it’s a done deal.
In closing, getting information is about creating a new reality for the prospect with no hope of escape or freedom. You control every aspect of their world. When it’s time to ask questions, you want them disoriented, anxious, wondering who you are and what you can do for them. You have to make them understand their entire future, their hopes, their dreams, every breath they will even take from then on – it all depends on one thing: Doing business with you.
A good salesman paints a picture of the world outside for a prospect. Whatever he’s holding onto, you take it away. His organization is crumbling. Friends can’t help. His preconceived notions are useless. Through all of this you have to maintain complete concentration on the job at hand. No thinking about your son or daughter, the wife or what’s for dinner. Remain focused, confident, self-assured. Your objective is to gain information to consummate the deal. You forget that and not only will you fail in your mission, you may wind up a prospect in someone else’s hands.
Good luck.

Virtual Bookkeeping and Tax Compliance

As a co-owner of a virtual bookkeeping service located in New Jersey, my partner and I have a range of clients in diverse businesses. This has given us the opportunity to implement accounting protocols as a tool for increased growth in many venues. Aside from decline in sales to employment issues to poor internal control measures, another major issue we encounter most often with small business owners is neglect to pay their taxes. New programs are under way (by Federal and State tax authorities) to trace non-filers. . Some time ago, we had a prospective client advise us he had not paid income taxes in several years. We resolved that issue and now handle his books at his offices or via our SFTP (Secure File Transfer Protocol).
There is certainly more than one answer to the underlining question but there are two main reasons for non-filing:
1. First, the tax code is so complex it leaves a great deal of “creative interpretation” to be done by accountants/tax preparers. Granted the IRS code stipulates a tax preparer should be an “advocate” for the taxpayer, that advocacy sometimes is supplanted by distortion.
2. Secondly, the high tax rates throughout the US provide individuals with a reason to try and cheat the system or avoid payment all together. Some years ago the American Bar Association Commission on Taxpayer Compliance provided a report that tested every conceivable reason for not paying taxes and the leading cause was deemed to be the high marginal rates of taxation. We won’t discuss the politics of tax increases vs. tax cuts, but tax planning is a major factor in the success of any business, large or small and impacts every part of the decision making process.
Of course, political agendas play a large role in the tax structure, compliance and distribution of revenues. It would seem nothing will happen in regard to tax collection and “revenue enhancement” until after the November elections. Like it’s said…death and taxes.

Tax Changes for Businesses; 2010

Federal Tax Laws have become more complex and confusing each year and 2010 is no different. The cause of this confusion for 2010 is primarily due to Congress making habit of enacting tax cuts along with other tax changes on a temporary basis. When the expiration of these changes is reached, the law will automatically revert back to what it was unless Congress decides to created a extension. This year has already seen both sides of the coin which was the extension of important tax provisions along with the death of others that had been enacted by Congress in ’08 and ’09.

WHAT EXPIRED AT THE END OF 2009 -

1. Bonus depreciation

In 2008 and 2009, a special law allowed businesses that purchased new equipment and other business property to take 50% of their total depreciation the first year — that is, they could write off half the cost of the property the first year it was owned.

2. Bonus depreciation for vehicles

The bonus depreciation law permitted purchasers of business vehicles in 2009 to depreciate an extra $8,000 of the vehicle’s cost the first year it was owned. This, too, expired at the end of 2009. First-year depreciation for vehicles is now limited to $2,960.

3. Charitable deductions of business property

Temporary tax laws provided enhanced charitable deductions to businesses that donated food, inventory, or computer equipment during 2008 and 2009.

4. Other expired tax breaks

A) Special credit for construction of new energy efficient homes

B) Provision allowing improvements to commercial leased property, restaurant buildings and improvements, and retail property improvements to be depreciated over 15 years (instead of the normal 39 years), and

C) Credit for certain research and experimentation costs.

That was a look at the EXPIRED for 2010 but in December 2009, the House of Representatives passed a Tax Extenders Act that extended some of these breaks through 2010. The bill has yet to be enacted into law. Most tax experts expect additional action from Congress extending more of these tax breaks retroactively to January 1, 2010. Now, let us take a look into what will be new for 2010…

NEW FOR 2010 -

1. Section 179 $250,000 deduction amount extended

A provision of the tax code called Section 179 allows small businesses to deduct 100% of the cost of new business property up to an annual ceiling amount. In 2008 and 2009, the annual ceiling was enormous: $250,000. The $250,000 deduction amount was extended for the 2010 tax year under the Hiring Incentives to Restore Employment (HIRE) Act. It is scheduled to go down to $25,000 in 2011.

2. Two new tax breaks for small businesses created under the HIRE Act

A) Payroll tax credit
Under the Act, businesses do not have to pay their share of Social Security taxes (6.2%) on wages paid to qualifying new hires. Qualifying new hires include anyone hired to a new position after February 2, 2010 and before January 1, 2011 who has been unemployed for at least 60 days or only working part-time. Workers hired to fill existing positions qualify only if the worker they are replacing left voluntarily or for cause.

B) Business tax credit
For qualifying new hires, small businesses can also claim an additional general business tax credit of up to $1,000 per worker on their 2011 tax returns provided the worker stays employed for at least a year.

OTHER CHANGES FOR 2010

1. New filing requirements for non-profits

If you run a smaller non-profit organization, you may need to file a Form 990-N “e-Postcard,” or your business could be at risk of losing its tax-exempt status.

2. Deducting losses

Businesses that incur losses in 2010 will not be treated as favorably as those that took a financial hit in 2008 and 2009. Small businesses were permitted to deduct losses incurred during 2008 and 2009 from the taxes they paid in the prior three to five years. Starting in 2010, such losses can be carried back only two years, thus reducing the amount that can be obtained in a quick tax refund.

3. Mileage rate for business driving

For 2010, the standard mileage rate for business driving is reduced to 50 cents per mile, down from 55 cents during 2009.

4. Estimated taxes for self-employed

Self-employed taxpayers who pay estimated taxes for 2010 must pay at least 100% of their prior year’s tax to avoid a penalty. In 2009, this amount was temporarily reduced to 90%.

Importance of File Backup

In today’s economy it is almost certain that a business, whether it be a small mom and pop shop or a national corporation, has some kind of internet presence. In addition to advertising online, most businesses today, due to convenience and the abilitiy to consolidate physical space, store their most vital and irreplaceable business records electronically.
What some small business owners do not realize is that they face a very real crisis, one in which many people do not even consider- the fact that natural disaster whether it be one created by “mother nature” or one created by user error. Once a disaster has taken place, there is no turning back, whatever damage that has taken place is now on the business owner and depending on the extent could have irreversible consequences. Although there is much debate in regards to statistics relating to the number of business’s that fold due to natural disasters, there are also other alarming figures to look at that are more difficult to deny.

Reported by The University of North Carolina’s Information Technology Research…

-A hard drive crashes every 15 seconds
-2,000 laptops are stolen or lost everyday
-32% of data loss is caused by human error
-31% of PC users have lost all of their PC files to events beyond their control
-25% of lost data is due to the failure of a portable drive
-44% of data loss due to mechanical failures
-15% or more of laptops are stolen or experience hard drive failure
-1 in 5 computers suffer a fatal hard drive crash in their lifetime
-40% of Small and Medium Sized Businesses do not back up their data at all
-60% of all data is held on PC desktops and laptops

(Professor David, Smith M., PhD, of Pepperdine Universities School of Business and Management)

Although there is much debate surrounding the statistical figures in relation to the number of businesses that go under after a natural disaster, the fact of the matter is that it is important to backup all financial data somewhere off site. There are several companies that offer services like this but the most convenient out of the group are the virtual accountant service providers. One that stands out is www.virtualaccountingonline.com which offers a flat rate for a bookkeeper/accountant and secure online data backup of all company financials. Whatever path you choose to backup your vital financial information, make sure it includes “off-site backup.”

PRIVATE VS. PUBLIC CLOUD

Aside from the fact that “cloud computing” related articles are printed almost every week in at least one major publication, the total number of cloud based businesses is continuing to grow.  According to the Cloud Barometer Survey conducted by Loudhouse Research, approximately 135 people, from different corporations, stated their office was moving some type of IT service to the clouds.  And 250 others stated they already have some kind of cloud based service implemented in the work place.  Since my partner and I operate a bookkeeping/accounting cloud based service, it is common for me to keep up to date with all cloud based technological advances, as well as changes in types of services provided, and any other related material.

I regularly visit sites that “…supply white papers to business and IT professionals, deliver a range of sales services to business and IT vendors, and conduct in depth research to help marketers maximize the value of their campaigns.” (IDG, About Us) All white papers that I have read have been professional and thorough.  Today, I came across a white paper issued by EMC Perspective who regularly provides studies for this site.

A paper published by this company on January 2nd of this year, is titled “Private Cloud Means Business: Costs Down and Agility Up.”  In short this paper discusses (this file is available for download in the sidebar) the idea behind private clouds.  They are nothing more than a server setup, within the place of business, which is configured to provide some kind of cloud application.  EMC Perspective goes on to discuss how there is significant cost savings with this implementation among several other beneficial factors.  Although there are benefits to owning and operating your own servers, they certainly are not cost effective.

Consider the Difference:  The following is an IT company that hosts Microsoft Exchange for a flat rate in comparison to owning and maintaining in-house servers.

Scenario A: Five Users at One Location

In-House Infrastructure

Server computer with Pentium 4 processor, 1GB RAM, redundant hard drives, power protection                                                                                                                         $2,250.00

Microsoft Small Business Server 2003 Standard Edition with 5 Client Access Licenses (CAL)                                                                                                                                 $557.00

Symantec Anti-Virus for Microsoft Exchange 2003 with 5 CAL                                              $399.00

Tape backup drive and one week’s tapes                                                                                            $420.00

Initial consulting cost to set up Exchange server: $110.00/hour x 16 hours         $1,760.00

Estimated annual maintenance costs: $100.00/month x 12 months                                 $1,200.00

Total First Year Cost ($5,386.00 upfront, $100.00/month thereafter)                            $6,586.00

OR

Hosted Exchange with NetVigour

Initial Setup Charge: $5.00/mailbox x 5 mailboxes                                                                    $25.00

Annual Charge for 5 Mailboxes: $49.95/month for 5 mailboxes x 12 months $599.40

Total First Year Cost ($74.95 upfront, $49.95/month thereafter)                                     $624.40

Savings

Total First Year Cost Savings                                                                                                                   $5,961.60

Total Three Year Cost Savings                                                                                                                 $7,162.80

Of course this company provides high quality and very imformative papers but this one was a real stretch from the truth.  Of course there are funtionality benefits of having servers within the office but when something does break and servers go down, dont be mad if your one man IT “team” has a problem getting the servers back online.  If this service was outsourced there is a good chance you will experience a short wait until the issue is fixed due to the fact that you have an entire company working on the issue.  IT specialists are not cheap.  So most companies that go ahead with in house servers only hire one IT specialist because their salary is not pocket change.  The best advice that can be given when considering moving some types of service to the clouds is make sure you do plenty of research regarding the company that is providing the service and also know what to expect when receiving the service.  There are benefits to both in-house servers and outsourced servers so what it comes down to is:   What will work best for you and your company?