Cloud computing and what it can do for your small business

by Donna Fuscaldo

Cloud computing has levelled the playing field, enabling small businesses to have computer hardware and software systems that rival those of major corporations.  The entrance of Microsoft and Apple into the cloud market has only served to raise awareness for these types of services.

But for many small businesses the whole idea of “the cloud” is still confusing. Sure they understand the basics behind it but many don’t realise the benefits nor do they know how to go about moving to the cloud.

“The cloud is increasingly popular with SMBs because it allows access to more powerful applications, more quickly and at lower cost than ever before,” says Josh Waldo, director of SMB marketing at Microsoft. What’s more moving to the cloud can save a small business money by helping to reduce overhead and costs associated with physical hardware and software.

What is the Cloud?

In essence cloud computing is the ability to access computer hardware and software from the Internet. Instead of a small business housing a server for email or security or a storage system on-site, the small business would pay a monthly fee to access a data centre’s hardware via the Internet. Same goes with software whether it's email, a customer relationship management program or a Web hosting application. Small businesses can also access their documents and presentations via the cloud enabling employees in different locations to collaborate as if they were sitting next to each other.

“The three tenants of the cloud is economic benefits, flexibility and responsiveness,” says Tim Crawford, CIO of All Covered, an information technology services company focused on the small business market.  For a small business the benefits will either be one or a combination of the three, he says.

Take flexibility. Some small businesses, particularly ones that have peaks and troughs in business demand, need the flexibility to increase their computer systems when demand is high and to reduce it when business is slow. Being on the cloud means the company can order up more processing power and storage space on a need to use basis. If a small business had its own hardware in house it would take weeks to order and install an additional server. Same goes for responsiveness. Small businesses launching a new product would want to quickly increase their computer systems to handle the demand but may not necessarily have the time to order a new server and wait a couple of weeks for it to come in.

On the economic front, Ron Braatz, founder of LiftOff, an information technology services company, says small businesses can save a significant amount of money. In addition to not having to pay for computer hardware, moving to the cloud means a small business may not need to hire a full time IT professional to manage the systems.  Not to mention a small business will save on the electricity required to run the systems.

 “Some of my clients save 60 percent to 70 percent on the cloud versus building an on premise email system,” says Braatz.  According to Braatz, for small businesses just getting their toes wet with cloud computing, the easiest thing to do is to move their email system to the cloud.  “It makes the most sense because it’s a mission critical application for many organisations which don’t have the IT resources to babysit a server inside the office 24 hours a day,” he says.

While small businesses may express concerns that moving their critical systems and applications to the cloud will make their data more vulnerable to a potential breach, experts says that moving to the cloud often times will make the data and applications more secure.

“People choose on premise servers because they think they can secure it better than a hosting provider,” says Braatz. “Most organisations are lucky if they have a single firewall in place where a hosted place has multi layers of security.”

Choosing a Cloud service provider

Moving to the cloud affords small businesses a lot of benefits but it’s not without negatives. For one thing, when a company moves to the cloud it gives up control of their systems which could come as a shock to some business owners. According to Crawford at All Covered to reduce that potential shock, he says a small business should go with a provider that will meet all the needs of the business and one in which the company feels secure with. Since there are a slew of cloud providers popping up just about every day, Crawford says the small business has to do its homework on the providers before choosing one.

“It’s not just a transaction,” says Crawford. “You have to trust that provider has your interest top of mind,” which means making sure the provider understands what your business is trying to do and what the provider can and can’t do.

A small business shouldn’t move to the cloud for the sake of moving to the cloud either, adds Braatz. He says a move to the cloud should be prompted by a need for a new email system, because the company has aging hardware or wants to collaborate better with far flung employees. “Once you establish the need then look at your options in the cloud,” he says. 

is a freelance journalist covering personal finance, technology and the small business market. She's written for Dow Jones, Wall Street Journal, AARP, HouseLogic and Bankrate.com. She currently has a weekly column on foxbusiness.com covering small business and technology. She resides in New York with her husband and daughter.
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