IT and Business Insights for SMB Solution Providers

Azure May Not Be Right for Your Small Business Clients

What's the best cloud solution for small businesses? My friend Randolph sent me a request/challenge. It turns out to be a very typical question in the SMB space right now. "What's the right cloud solution for this client?"

Here's is request:

Looking to make a major dive into increasing my Azure knowledge.
My scenario is
- 10 Person shop
- 5 Users in one location
- 5 users in five scattered locations
- Currently running SBS 2011
- Utilizing Office 365
- Cloud based line of business app
- Server used for AD and file storage.
- Utilize VPN to get into office and server

Want to move everything to cloud – Get rid of the server in the closet.

Want to see if Azure can be used as a replacement.

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And here's my response:

First of all, I don’t see a role for Azure here at all. You don’t need a virtual server. And there are better storage options, including OneDrive.

Second, your request is a perfect candidate for my cloud five-pack (see

Sell them two cloud five-packs. That gives them ten mailboxes (Rackspace, Intermedia, or Appriver).

Location doesn’t matter. Everyone uses Outlook to connect to the hosted Exchange mailboxes. 100% normal Outlook operations whether in location one, location two, home, vacation, etc.

Storage: I prefer Jungle Disk. I understand they’re re-introducing a reseller program. The storage can be on Rackspace or Amazon Web Services. Rackspace is a bit cheaper because they don’t charge for moving data, only data at rest.

Office 365 licenses can be re-licensed through whoever is providing Exchange mailboxes. That way they’re all together and easily managed.

Personally, I would turn the local server into the backup. In other words, bring a copy of data back down from the cloud to an un-shared storage area on the server. (never seen by clients)
I charge $100/month to manage this. All it does is authenticate logons and back up the live data in the cloud.

If you add management of the desktops, that’s ($599 x 2) + $100 for the server. Total income $1,298. Depending on how much data they have, this will cost you about $175/month for Office, storage, AV, RMM, etc.

Since all the services are in the cloud, there’s almost nothing to go wrong onsite except billable incidents because people changed something on their machines. So let’s say it takes an average of .25 hours per person per month, that’s 2.5 hours of labor. If that costs you $125 to deliver, then your total cost to deliver is $300/month. It shouldn’t be this high, but most people tend to give away more free labor than me.

Anyway, your profit is $998/month or 77%.

THAT’s why you need to attend my SMB Roadshow.

- Karl W. Palachuk
Small Biz Thoughts

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The key take-aways here are:

1) Azure is not the cloud. If you a hosted server or an SQL instance, then it's your baby. But there are better overall solutions to cloud services. With Azure, you replace a server in the closet with a server in the cloud. You need jut as much maintenance, backup, AV, RMM, etc. as you would with a physical server. Sometimes that the right solution. But for many small businesses, it is not.

2) If you want to learn how to build butt-kicking, massively profitable cloud solutions for small business, you should attend my 2017 SMB Roadshow - coming to 28 cities this year. See


About the Author

Karl W. Palachuk, is a technology consultant, author, speaker, trainer, and coach. He is the author of fifteen books. He has built several successful businesses, including two managed services companies. His books include Managed Services in a Month and The Network Documentation Workbook. Karl is a frequent trainer and speaker in the SMB Community. His popular blog can be found at He has more than twenty years experience as an I.T. professional and serves on advisory panels for several hardware and software companies.

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