When we’re discussing the cloud, usually we’re discussing the cost reduction, lowering capital investment, or both. These discussions are mostly relevant for large enterprises because they can gain significant benefits from the cloud environment, by having a well designed and implemented cloud.
But, what’s there for small and medium businesses (SMBs) regarding cloud computing? Is cost reduction everything that a cloud computing business model can offer to SMBs or are there additional benefits?
First, let us explore the characteristics of the SMB information technology (IT) environment and what kind of issues it is facing.
Usually, an SMB does not have fully skilled IT staff to maintain the IT environment, which leads to decreased quality of services provided to the SMB’s internal or external clients. Key issues are always services availability and security issues. Can SMBs provide services under a defined service-level agreement (SLA) and customer expectations, or is there any kind of SLA defined?
Because an SMB might not have a fully equipped IT staff, the SMB heavily relies on solutions from value-added resellers, where providers design, implement, and maintain the solutions for the SMB with minimum or even no influence from internal IT. Here we are again back to the SLAs because of this question: Can SMB’s effectively manage their IT environment?
Finally, because of the limited IT budget, SMBs are not in the position to fully explore IT innovation. Most of the time SMBs are struggling to maintain existing infrastructure to support their core business and cannot invest in enhanced IT environment. Do SMBs really require IT innovations in daily business? For sure yes, but not all the time.
How can cloud computing address these issues and support SMBs in daily business?
Public cloud computing can offer substantial benefits to the SMBs as follows:
- Pay as you go business model:
Most cloud services are available on a month-to-month charge basis enabling the customers to pay for the used services without long term contractual obligation. With the pay as you go business model, clients avoid possible large upfront capital investment for required IT infrastructure.
- Quality of services:
Moving their workloads to a cloud service provider will decrease the need for significant workload of IT staff, which, in the end, will enable internal IT staff to focus on remaining internal IT services, which can lead to increased quality of services. For the workload that is moved to the cloud service providers, defined SLAs are provided by the cloud providers; the clients are responsible to carefully read the SLAs and negotiate them with the cloud service provider if required.
- Access to wide range of applications:
Clients are able to quickly purchase and use additional services or applications if there are business needs without long-term evaluation and upfront investment.
- Management:
Complete management of the IT goes to the cloud service provider. There is no need for SMBs to take care of data centers, power, cooling, patching, and so on.
- Scalability:
Customers can easily scale up and down IT infrastructure as needed based on their business requirements. Even more important, they can do it very quickly — we’re talking about minutes or hours instead of weeks, as before.
- Location-independent:
Because a key characteristic of cloud computing is Internet access, clients are not limited to use a provided service from one place or one device. Service can be accessible from anywhere, where Internet access is provided.
Public cloud computing offers to SMBs business a number of attractive benefits — from a pay as you go model, which lowers the upfront capital investment in IT infrastructure, to the possibility of exploring additional services from cloud environments.
As mentioned, one of the key benefits for SMBs from cloud computing is moving the IT operations to the cloud provider. It lowers the operational cost and gives SMBs the option to concentrate on their core business.
For SMBs, public cloud computing makes the following sentence meaningful: “Do what you are doing the best and outsource the rest.” In this case, SMBs can purchase the services from a cloud provider when they need services and for how long they need them.
Cloud computing is changing the way businesses are done. But there are is still a threat from security point of view. Like as the data can be accessed from any location, chances are that, it can get in the hands of anyone. Also few cloud companies allow accessed data to be modified, which is again a negative aspect of cloud. So it would be great if you provide the positives and negatives of each cloud company. Thanks
This was a good overview. I agree with the comments here regarding the challenges and the benefits. I would say that cost reduction is still meaningful in this environment. If you can extend the life of existing assets, you are saving money.
The key for smaller businesses is working with an IT consultant or reseller/VAR who can help them work with cloud service providers. There are not many cloud providers that can scale to provide in depth services to support needs on on-boarding customers for migration for example.
Lastly, above comment about security concerns – if the customer has control into managing the environment, this can help overcome insecurity. Service providers usually have a lot of thought put into security.
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