by Byron Connolly

Australian Property Institute to save $1.94M with cloud service

Sep 24, 2013 3 mins
Cloud Computing

The Australian Property Institute (API) expects to save $1.94 million in IT costs over the next five years by moving to a public cloud service.

The 87-year-old, not-for-profit organisation – which represents 8600 property professionals – has moved its core enterprise resource planning (ERP), e-learning software and some pre-production systems into the cloud.

Under the hosted service – supplied by Amazon Web Services (AWS) – the organisation will cut operational costs by 50 per cent year-on-year, freeing up funds to develop other member services.

Last year, the company spent $40,000 on operational costs and $20,000 on capital. But this year, API’s operational expenses will be halved to $20,000 due to the service being hosted in Sydney rather than Singapore (meaning its data now resides in Australia), new system architecture changes and a reduction in AWS’ service costs.

Over the next five years, the API estimated it would have spent $2.11 million on upfront capital and ongoing running costs if it continued to run its ERP system in-house. This will drop by $1.94 million to $168,000 due to the cloud deployment.

Related: Amazon set to shake up cloud market.

According to the API’s CIO, Joel Leslie, it made sense for the geographically-dispersed organisation, which operates in every Australian state, to move to an infrastructure-as-a-service model.

Leslie said the ‘old way’ of procuring IT services, finding rack space, hiring internal IT staff and creating business continuity plans was becoming too expensive for the not-for-profit organisation.

“It also presented a concerning level of reliability for both national and state staff in terms of Internet access and access to the organisation’s data,” said Leslie.

“There were major concerns about the negative flow-on effect to members in regards to compromised services and a reduction of funds available for member activities and education resources.”

Leslie said one of the main benefits of cloud computing is the opportunity to replace up-front capital infrastructure with low variable costs scalable as the organisation grows.

“We can instantly ‘spin up’ hundreds or thousands of servers in minutes and deliver faster results, drastically eliminating capital wastage which is common with traditional procurement,” he said.

Leslie said the API had previously chosen a cloud service that wasn’t quite designed to be delivered over the Web.

“It was more of a solution that was developed to be housed as a locally run service. In this day and age, this type of solution is much less efficient – a waste of resources, especially in a not-for-profit membership organisation,” Leslie said.

Leslie said that there has been “some noise mostly through the Internet” about privacy and level of security provided by public cloud service providers.

“Yes the laws change in each country concerning privacy, however the API is comfortable with the rules, policies and frameworks Amazon has in place in regards to risk minimisation,” he said.

“We also run our own intrusion testing regularly and make sure our instances and services are up to date. We also employ IT service management methodologies to assist with security and data integrity.”

Leslie believed the API was leading the pack in the property industry with its adoption of cloud services. The organisation also recently shifted to Microsoft Office 365 cloud service for email and other productivity applications.