It’s Time You Move Your TMS to the Cloud; Here’s Why
If you’re running your company’s Transportation Management System (TMS) or similar software on your servers or from a data center, you’re throwing money away that could be used to grow your business. Plus, that is so 1999.
A decade or more ago every company had to build its own infrastructure to operate a TMS. The expense was enormous.
First, you had to buy a server, which you depreciated over three years, and then you had to license the software; the operating system and the TMS.
Then you had to provide power for it, and that power needed to be reliable and redundant, which meant you needed battery backup and a generator.
Next, you needed to cool everything with an air conditioner. And guess what? If your air conditioner fails the server fails, so you need a backup air conditioner.
Finally, you needed a secure space that was perhaps PCI- or SAS-compliant, which drove up costs further. Oh, and you also needed video cameras to see who entered and exited the building. Ugh.
Perhaps the evolution of hosting our own custom-coded TMS reflects your own experience? LPS went from having servers in our own building to renting rack space in a small data center to just a few months ago when we moved our entire infrastructure into Microsoft Azure’s cloud.
In doing so, we decreased our infrastructure cost to one-fifth of what it was when we were renting a small data center, and that was probably one-fifth of the cost of running our own data center. We’re talking about less than 1 percent of the original cost.
The Cloud Epoch
We are in a new era of information and data processing. It’s a world dominated by three companies offering cloud computing services to millions of businesses and billions of people. It’s the cloud era.
The cloud leaders are Amazon, Google, and Microsoft. The size and scale of the infrastructure these companies have built are beyond our imagination. To be sure, the cost of renting a server for an hour a day for a year is a fraction of what it would cost you to operate your own data center. These hulking data centers are ideal for hosting your company’s TMS. And talk about reliable. The data centers are in secure buildings with redundant fuel sources for the generators and redundant cooling facilities.
These are what’s called Tier 1, 2, 3, and 4 data centers. You’re able to buy infrastructure in some of the most resilient data centers in the world at a very low price. Also, these servers don’t fail as often as the servers you buy for your company. On top of that, they are geographically dispersed.
For example, LPS has instances of its TMS running on the West Coast and in Chicago. If you’re running your TMS in two locations, you can survive major power grid or telecommunications failures. Redundancy also protects you against a denial of service attack.
Choose a Multi-Tenant Software Environment
In a multi-tenant software environment, you pay for your software through monthly subscriptions. The subscription model allows you to match your software needs to the number of employees you have working at any given time. Say, for example, you have five employees using the TMS one month, then 15 the next. You only pay for what you need.
When you’re busy, your software costs are higher—when you’re not busy, costs are lower. In other words, your licensing costs flex as your employee numbers flex.
The same applies to your infrastructure. If you’re in a shared environment where you’re paying for infrastructure, then only buy what you need. Scale up your infrastructure when you’re busy, scale it down when you’re not.
You can adjust your costs to match your business level, which then enables you to create a model where your bottom line and top line can move in parallel as opposed to a traditional model where your bottom line has fixed large costs, like a data center and software.
Instead, when you’re busy, your infrastructure costs increase to match it. When you’re not busy, infrastructure and software costs decline—an ideal model because moving freight can be cyclical.