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Understanding Cloud Computing and Its Self-Storage Applications

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By Michael Sawyer

Self-storage operators have no doubt heard the term “cloud computing,” but what does it mean, and how does it pertain to your business? Here’s a quick breakdown on how it works and why it’s applicable to the storage industry.

When computerization took off 30 years ago, if your company needed up-to-the-minute sales data, business statistics or accounting numbers, you most likely would have outsourced these services, hiring an outside company (with its own private computer system) that specialized in accounting, number crunching or data reporting. In the early 2000s, people found they could do many of those jobs on their in-house computer systems with off-the-shelf software. Eventually, though, their systems became slow and overloaded due to a lack of storage. To compensate, companies began to build mainframe infrastructure to power their networks in-house. However, due to the high upfront costs, continued maintenance, updates and costly security measures, do-it-yourself networks have largely been phased out.

Today, personalized technology—laptops, tablets and company desktops—have been phased in for plenty of reasons, starting with a huge reduction in costs. Most every company has found that it makes better business sense to store computer programs online instead of accumulating programs offline, in-house or on a desktop. It’s pretty ironic that the self-storage industry encourages customers to do the same when storing their belongings, wouldn’t you say?

This online storage concept is called cloud computing. It’s obviously linked to the Internet (cyberspace: the big storage facility in the sky), a place where rental space is cheap and always available. Let’s take a look at how it applies to running a self-storage business.

The Self-Storage Cloud

In addition to cost savings, self-storage cloud-based applications exist primarily for three reasons:

  • Management technology: To provide storage-specific applications that are automated and task-based to enhance the value facility managers provide by redirecting focus on more profitable tasks
  • Revenue-generating technology: To provide storage operators and managers with tools that generate added dollars
  • Open integration: To provide seamless and more secure connection to the owner’s unique property-management system

Cloud computing is just a trendy buzzword that makes better sense when we highlight real-world applications and show how self-storage owners can benefit, so let's take a look at some examples.

Applications to Enhance Manager Value

Pay-by-phone. This is a cloud application that connects to a facility’s telephone through the Internet. Upon dialing, callers don’t reach the manager directly. Instead, the application first welcomes callers with automated prompts to pay their bill via touch-tone or voice-over rather than take up the manager’s time to handle the payment manually. The service connects with your property-management system to identify callers and collect rent automatically by offering tenants 24/7 payment convenience. The system is proven to address manager tasks more promptly and cost-effectively, and reduces collections by giving tenants the ability to pay every time they call the facility.

Automated collections. This cloud-based technology scans your property management system for past-due tenants on a daily basis. Delinquent accounts are sent a series of automatic, “friendly” payment reminders via text—complete with a link to make a payment or a touch point to call the manager immediately. Many vendors say this service is extremely effective, with conversion rates up to 10 times higher than e-mail, direct mail or manual phone calls.

Call-tracking software. This application is effective in evaluating your manager’s performance by providing owners with accurate data on call volumes. The service gives insight to how many sales are missed when calls aren’t answered immediately. A recent self-storage case study published by equity and fixed-income management firm Chilton Capital Management claims that only 60 percent of calls placed into most storage facilities are answered. Call-tracking software is typically used on a short-term basis to gauge if it’s cost-effective to hire added staff or use a call center to handle rollover calls that would otherwise be missed.

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