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:

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.

Software as a service (SaaS). The aforementioned services are available on-demand and are often bought on a pay-as-you go, pay-per-performance or subscription basis (often at a nominal price). Thus, you typically can buy cloud computing the same way you would buy electricity, telephone services or Internet access from a utility company.

Applications to Generate Added Revenue

Online applications can make renting simple, easy and convenient in a number of ways, whether onsite, online or over the phone. Integration with your in-house property-management systems allows customers to do business with your facility from any place, at any time, as long as they have an Internet connection.

Call centers. Many vendors provide cloud-based phone systems, software applications and professional storage teams behind the technology to answer facility calls. The setup ensures the person answering your phone calls knows everything about your facility (location, tenants, available units, pricing, policies and more) and that you never miss an opportunity to rent a unit.

Web applications. Your website visitors can select a unit, sign the lease and pay for their space before even calling or visiting your office. All the paperwork can be completed by the customer in advance from the convenience of a desktop computer, tablet or smartphone.

Kiosks. Using onsite hardware, a touchscreen computer and automated voice prompts (or live assistance via two-way video), customers can purchase a unit, tenant insurance, sign the lease and move in. All the paperwork is completed at the onsite payment and rental station. The service is like having a person onsite 24/7 who collects payments and converts extra rentals each month. A kiosk is always open to handle customer needs.

Implementation

In all, cloud computing means you use a complete application running on someone else's system. Maintenance, upgrades and customer service are all covered by the host. Cloud computing allows you to buy the services you want (when you want them), cutting the upfront capital costs of computers and software. You also avoid the problem of software going out of date and other IT-related procedures like ensuring system security and reliability.

You also can typically add extra services (or take them away) at a moment's notice as your business needs change. This is generally quick and easy to do. Ultimately, the concept of cloud computing should be welcoming to self-storage owners, and has proven effective for those willing to give it a try.

Michael Sawyer is the director of marketing for Phoenix-based OpenTech Alliance Inc., which develops self-service rental solutions for the self-storage industry. The company offers a full range of INSOMNIAC products and services including kiosks, call-center services, website-rental applications and automated unit-security systems. It also provides the Open Self-Storage Cloud, which hosts industry-specific software applications including online Web and mobile rentals, accredited call-center and lead-tracking software, and licensed phone/voicemail programs. For more information, call 602.749.9370; visit www.opentechalliance.com.