Last year, Clint Newell, president of Clint Newell Auto Group, a $60 million car dealership in Roseburg, Ore., decided he’d finally had enough of his IT consultant.
Newell was tired of paying the consultant to put “band aids” on an aging and overworked IT system. He grew frustrated at the system breaking down all the time. And he bemoaned the “vicious cycle” of having to pay the consultant more money to fix it.
“This consultant did some stuff that really wasn’t in our best interest long-term,” Newell says.
And so he fired the consultant and migrated everything to the cloud. Not only has this saved money, the car dealership’s IT is more agile, more scalable, more secure, and faster. Tapping cloud services, Newell also developed and rolled out mobile apps that improved both the employee experience and customer experience.
It’s a cautionary tale for channel companies stubbornly clinging to the old ways. Many lack the wherewithal to embrace digitally transformative technologies such as cloud computing, instead selling customers a sputtering on-premise system. Perhaps they’re just trying to hold out a little longer; a Forrester study found that 40 percent of channel owners plan on retiring by 2024.
But, as the hapless consultant at Clint Newell Auto Group learned too late, time is running out.
Newell is actually a little behind in the great migration to the cloud. IDC reports that 85 percent of enterprises already have a cloud strategy. The top five reasons companies take to the cloud: IT and development cost savings; security and compliance improvement; improved employee productivity; overall business agility improvements; and improved customer experience.
Newell’s cloud journey arrives at many of these business benefits.
In 2016, Newell braced for a hit on his company’s capital expense budget. The on-premise system was nearing capacity, and the IT consultant pushed for an infusion of new hardware and reconfiguration services at a cost of more than $100,000. Even if he decided to go this route and stay with an on-premise system, Newell wondered how long before he’d have to pony up again. Given tech vendors’ penchant for making their own products obsolete, he saw an endless road of having to replace tech gear.
“If I ran the car business that way and told customers, ‘Look, your car is five years old but we’re not going to provide service support on it anymore,’ you’d have a lot of unhappy people,” Newell says. “Yet the IT industry has kind of gotten away with that for a long time.”
Then Ryan Parker, Clint Newell Auto Group’s CTO, suggested a move to the cloud, specifically, Citrix Cloud. The company could gain capacity, stability, security, and a net savings compared to the cost of the proposed on-premise system upgrade. Citrix Cloud also makes it easier to create mobile apps, Newell says.
This is especially appealing to a car dealership. Mobile apps put information into the hands of sales people and customer service employees interacting with customers out on the lots. Mechanics can perform maintenance reports and access technical specs without leaving the garages. Customers, too, could use a mobile app to register their cars, review service history, make appointments, etc.
A convinced Newell moved everything – rental car system, dealer management system, email, business functions – to the cloud, and mobile apps followed on its heels.
Of course, there were some bumps along the way. Downtime still happens in the cloud, although not nearly as often as before. “We had them push a few updates to us that have caused some problems, that have blown us up,” Newell says, adding, “We’re always on guard for the next update.”
Fortunately for Clint Newell Auto Group, Parker has been able to resolve issues quickly, Newell says. This speaks to the advantages of having an experienced technical leader on staff even when operating in a cloud environment.
But the occasional downtime pales in comparison to the way things used to be. What the cloud represents to Newell is freedom. Now he no longer feels chained to tech vendors with shifting product roadmaps, to costly hardware upgrades, and to a consultant holding him to ransom with an on-premise system held together with band aids.
“We wasted a lot of money, and that’s money we’re saving now,” Newell says. “Part of our budgetary forecast was to eliminate those outside services.”
Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is based in Silicon Valley. You can reach him at [email protected].