US Cloud sent its employees home as the coronavirus pandemic spread throughout St. Louis this spring.
And now the firm that specializes in providing IT and Microsoft support won’t be returning to its Fenton office, but not out of a desire to embrace working from home permanently.
Instead, US Cloud, led by founder Rob LaMear, recently closed on a $4.4 million deal to acquire a vacant 50,000-square-foot office building at 12855 Flushing Meadows Drive in Town & Country from Rodger Riney, a founder of Scotttrade, which once occupied the building.
As companies across the country contend with decisions of whether, when and how to reenter the office, the technology industry is considered by some as the least likely to have employees return to a traditional work environment. Technology and financial services firm Square, which has a prominent office in St. Louis, announced it would allow employees to work from home indefinitely. In addition, commercial real estate brokers have said that deal flow has slowed as buyers paused negotiations due to uncertainties with the market and Covid-19.
All those factors make US Cloud’s decision to buy an office building more unusual. But the company said working from home just isn’t working for them.
“We all felt like we lost something. My office is outside the main engineering area, and I could hear how much over-the-shoulder collaboration could happen, the banter and relationships that happen when folks work together.”
“That building sits right inside a primary fiber hub and decking that building with cutting edge infrastructure is really helpful to engineers. It’s difficult to replace that while working from home,” he said. “St. Louis is becoming more of a tech hub and is getting more competitive. We’re going to use this building to make it nice enough and more useful for folks to work at US Cloud.”
The deal was in the works prior to Covid-19 as the company was beginning to outgrow its 10,000-square-foot Fenton office, at 1714 Gilsinn Lane. US Cloud planned to lease some of its new space to another firm, but the company is exceeding its growth pace. After starting the year expecting sales to grow by 50%, it’s now expecting revenue to double, meaning it will need the entirety of its new Town & Country office.
“The support we offer is more reactive, trying to help clients with problems. You’re not sure what you’re going to deal with moment to moment, so to have a group where you can have cross pollination and learning osmosis is a real advantage,” said Harris, adding that the firm will be flexible with “some level of working from home.”
If you use Microsoft software and services to power your business, chances are you’re also a Microsoft Premier Support customer. These systems and services are critical and require urgent attention to any issues, escalation and resolution of problems. Now, Premier Support customers are being asked to renew with a new offering – Unified Support – which Microsoft says will bring all support for online and on-premises products into one single agreement.
With Premier Support, you purchase a block of hours for different categories of support, such as Proactive and Problem Resolution Support (PRS) – a more flexible, customizable model to fit into your specific needs. With Unified Support, you will pay a percentage of your annual licensing costs for unlimited PRS and unlimited electronically delivered proactive support. The annual cost for Unified Support is 6% to 10% (depending on the level of Unified Support selected) of Office 365 and client software annual costs, and 8% to 12% of other software and online services annual cost.
So what does that mean for the vast majority of Microsoft Premier Support customers today? You won’t need to estimate/track hours, but if you’re a typical organization paying around 7% of annual Software Assurance cost for Premier Support, you will pay 30% to 60% more at Microsoft. If you think this is normal across office software and services vendors, think again: This change will mean those paying for Microsoft Support will pay 33 to 39 percent of licensing costs for maintenance – significantly higher than the industry standard 18 to 25 percent today.
“US Cloud is seeing unprecedented urgency from Global 2,000 and Fortune 500 organizations to switch from Microsoft Premier/Unified support to US Cloud Microsoft support services.”
Basing support charges on annual product and service spending allows MSFT to charge for support of its online (cloud-based) products – which will increase costs for products like Office 365. You may have to spend more to support Office server workloads running in Microsoft’s data centers than when you hosted them yourselves. Doesn’t that defeat one of the biggest purposes of cloud computing, which was cost savings?