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Why Should Small Businesses Look at Cloud Computing Solutions?

March 5th, 2013

 

Why Should Small Businesses Look at Cloud Computing Solutions?

The business world has seen several new advances in technology and has undergone many trends over the years. Whether it’s BYOD, social media explosion, or the Blackberry craze, there always seems to be something new in the world of business. Some of these trends last over time, and most are eventually phased out or replaced by something new. One innovation that seems to have taken over and is here to stay is Cloud Computing.

cloud_businessThere are a few different reasons why it’s fairly safe to assume that cloud computing will continue to be an integral part of the business world. For one, the advantages (which we’ll take a look at) are too good to be ignored. Unless there is some radical new technology that is released in the next decade, cloud computing won’t be knocked off any time soon. Also, cloud computing is still a relatively new technology. Cloud technology first became being offered as a service for businesses and consumers in 1999 by companies like Salesforce and Google. But it really hasn’t been until the past 5-10 years that companies and individuals really started to grasp what cloud computing is all about. What this means is there is still plenty of room for growth and development in the cloud computing industry.

Small businesses and even aspiring entrepreneurs need to seriously consider cloud computing and start taking advantage of all it has to offer.

Emerging Business Models

 The rise of technology and the birth of the “Digital Nation” have opened the door for many new business models.  If a developer wanted to sell software years ago, they developed their program and sold licenses to use it. This is still a business model that many companies such as Adobe, Microsoft, and others use for their products. However, because of cloud computing, that industry has seen a change. Instead of selling licenses to use software, companies have begun seeing the potential in simply letting consumers pay a monthly or yearly price to use their products or services.

This model has been applied in many formats including:

  • Software as a service (Saas): Amazon web services, Salesforce, Google Apps
  • Platform as a service (Paas): OpenShift, Google App Engine, App frog
  • Infrastructure as a service (Iaas): RackSpace, Gogrid, Cloud Sigma
  • Storage as a service (STaas): Dropbox, Google Drive, iCloud

Cloud computing allows businesses to offer their products to consumers on the cloud so that the software, platforms, or storage are essentially offered as an “on demand” service. All of the models listed above have created small businesses that would not be possible without cloud computing. For entrepreneurs or existing small businesses looking for new products or services to offer, consider using cloud computing in some form. Whether it’s launching a new Saas or creating cloud apps, the possibilities are endless.

Global Business and Collaboration

Today more than ever, companies are conducting business all across the world. Whether employees are allowed to telecommute or if companies have offices in different states/countries, cloud computing makes it much easier for employees to collaborate. Doing business globally is no longer just a trait of large corporations. Small businesses are being formed by people in different states thanks to some of the industries mentioned in the previous section such as Saas or Paas.

Cloud computing allows businesses to share documents, media, and even work on complete projects without having to physically be in the same location. Services like Salesforce and Dropbox eliminate the need to rely on emails, flash drives, and other tools that were once required in order to collaborate on projects together.

The OpEx Model Benefits Small Businesses

Without launching into a complete debate on Operational expenses (OpEx) vs. Capital Expenses (CapEx), many believe that the OpEx model that cloud services are pretty much built on are much more favorable for small businesses. As a small business, money is typically tight when starting out and you might not have the capital to make long term investments in IT infrastructure or other assets that will require a long term commitment. Since nearly 50% of all businesses fail within the first 5 years, it might not be a great idea to rack up tons of debt by leasing or buying IT infrastructure or programs on credit.

Cloud computing gives small business owners the opportunity to use tools as they need them, rather than make an investment that they may never get a ROI on. This is one of the most overlooked benefits that Cloud Computing gives small business owners. Small businesses should aim to have as little capital expenses as possible. Capital expenses create huge overhead that small businesses can and should try to minimize. With operational expenses such as cloud computing services, you can cut your ties at any time and discontinue services if the costs become too much or if you simply no longer need the service.

Extra Security Measure

Very often, small businesses can forget the importance of IT security. Things like backing up your files properly or limiting which employees have access to certain information aren’t at the forefront of concerns for some small businesses. Since small business owners have to juggle a million things at once, it doesn’t leave much time to concentrate on all of the IT needs of a business. This is where cloud computing can be very handy. Services such as Dropbox or Mozy allow you to back up all of your company information to the cloud rather than on your physical computer. This service can be a huge life saver if anything ever happens to your computer.

Many Cloud Backup services offer cloud sync services that will automatically perform backups for your computer daily, weekly, or whenever else you would like. Trying to recover lost files after your company computer has been infected with malware and viruses can be a huge pain and cost a lot of money. Cloud storage offers small businesses a cost efficient way to backup all of their important information without having to make it a long, boring, time draining process.

On the other end of the spectrum, security has been a concern for some businesses that use Saas or cloud storage. Because users don’t necessarily have control over the data stored on the cloud, they have concerns over how secure their data is. I think you simply have to look at the fact that you seldom ever hear of cases where cloud data is stolen, but there have been plenty of issues with data taken from large corporations (Apple anyone?).

Easy to Scale

Every small business aspires to grow at some point. Can you imagine an entrepreneur deciding to create a cap on how much they want their business to earn? So naturally scalability becomes a factor for any small business, and cloud computing and scalability pretty much go hand in hand. Whether you’re dealing with cloud hosting, Saas, or cloud storage, cloud computing gives you the opportunity to scale as your business grows.

Most Saas products are offered on a tiered price plan that might look like:

  • Standard: $10/month
  • Pro: $30/month
  • Premium: $60/month
  • Enterprise: $100/month

The higher up you go on the plans, the more benefits you will get. The higher priced plans are reserved for larger sized businesses and businesses that have greater needs. This model fits perfectly for small businesses because as you grow, you can upgrade to get the resources you need.

The same general idea applies to cloud storage or any other cloud service. You can easily scale up or down based on the needs of your business.

Cross Functionality

A new trend that is emerging in the world of cloud computing is the cross functionality of different cloud services. For instance, the popular email marketing software Mailchimp integrates with a wide variety of cloud tools including Google Apps, Salesforce, Wufoo, and many more. This cross functionality makes it much easier for small businesses to use multiple cloud computing services seamlessly. You can even take it a step further by using services such as IFTTT (If this then that) to link multiple cloud based services together for your small business and automate certain tasks.

Cloud computing seems almost as if it was made with small businesses in mind. The financial benefits, ease of use, and efficiency make choosing cloud computing a no brainer. Cloud computing is here to stay, so small businesses can either start taking advantage or get left behind.

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Boney Pandya is a Marketing Manager with WebNet Hosting, a company providing fully managed cloud vps and dedicated servers since 2002 for online media streaming. Boney helps small businesses and entrepreneurs move their website on the cloud

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  1. March 21st, 2013 at 08:30 | #1

    Obviously the particular benefits of cloud computing vary depending on the nature of a business. I do believe, though, that every business can benefit from it in one way or another as it covers so many different areas. For example, most businesses can benefit from using software hosted in the cloud or by storing their data in the cloud. There is also hosting websites in the cloud and many other things.

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