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What Every Nonprofit Should Understand About Cloud Computing

Compared to other sectors, nonprofits have a technology gap.  A recent Johns Hopkins University study surveyed the root causes of the nonprofit technology gap and identified lack of money, lack of time and lack of expertise as the top three challenges.

What is interesting is that Cloud Computing addresses all three of the challenges faced by nonprofits.  When solutions are resident in the Cloud, nonprofits can buy subscriptions (usually monthly) to application use.  This is often referred to as SaaS or Software as a Service.

So what is SaaS?  At the most simple level, it’s the answer to the question – do you rent or do you own your software?

Software solutions that are “owned” by a nonprofit reside at the physical location of the nonprofit (on-premises or “single-tenancy”).  Every organization has its own copy of the software.  While your organization may have a certain version of the software, the software publisher is regularly issuing new versions and updates of the software.  As a result, it is not uncommon for an organization to be “behind” in terms of most recent version of the software.

On-premises software requires IT support, upgrades, supporting infrastructure (servers, etc.) and the maintenance costs of software and infrastructure.

Cloud solutions are “rented” by the nonprofit organization.    The software resides in the cloud, and is “multi-tenancy.”  Because the solution is in the cloud, the software publisher is always providing the most recent version of the software – so only one version of the software is in use and all users are using the same version.  All server and program upgrades, maintenance, etc., are the responsibility of the solution provider – not the nonprofit organization.

While cloud computing sounds new, you’ve probably been using many cloud-based solutions personally for a long time – online banking, purchasing through amazon.com, booking airline tickets, etc.

So here is a quick and simple compare and contrast between On-Premises Model and a Cloud-based Model:

On-Premises – Upfront License Fees

Cloud – Pay for what you use

On-Premises – 18+% Annual Maintenance Fee

Cloud – Included in subscription

On-Premises – Customer bears all IT infrastructure costs and risk

Cloud – Vendor’s bears all IT infrastructure costs and risk

On-Premises – “Ship and Forget”

Cloud – Vendor Accountability

We see the following as significant benefits for Nonprofits utilizing cloud computing:

  • Anytime/Anywhere access – wherever you can access an Internet connection, you have access to your cloud-based solution
  • Limited IT resources are required
  • Faster time to deployment, faster time to value, and less risk
  • Easier and less expensive to customize/more flexible/ more open
  • Positive experiences with other cloud-based products
  • Better security and operations that otherwise could afford
  • More cost-effective than other alternatives

If you do a quick Google search of cloud-based nonprofit applications, you’ll find brands such as Intacct, Convio, Sage Fundraising Online, Tapestry, Fellowship Technologies, SalesForce.com, WebEx, Google, ADP and PAYCHEX, to name just a few.

JMT Consulting is experienced with both on-premises and cloud-based solutions and can help you find the perfect solution for your nonprofit.

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