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Your first thought when someone mentions clouds may resemble puffy white cotton balls. But if you are a business owner, you should be changing your train of thought to opportunity because that is exactly what cloud computing offers to small businesses.
Modern hosting, and, more specifically, cloud computing, means having your computing infrastructure, platforms, and applications hosted in a location other than your facility. It offers the ability to access storage or computing or processing power on demand through web-based cloud platforms. It benefits small businesses in many ways, including reduced investments in software and hardware, because companies can pay for computing needs on an as-needed basis. [1]
An example of cloud computing architecture.
While some people may be hesitant to embrace modern hosting solutions, it’s clear that small businesses are flocking to the cloud. A recent study conducted by Microsoft revealed that 39 percent of small and mid-sized businesses expect to pay for at least one cloud service in the next three years, and that 43 percent of computer workloads in the United States will shift to paid cloud services. [2]
What Types of Clouds Are There?
Forget the things you learned in science class about stratus and cirrocumulus clouds. Today, the cloud is about IaaS, PaaS, and SaaS; which respectively stand for Infrastructure as a Service, Platform as a Service, and Software (or application) as a Service. [3]
Software as a Service typically involves accessing software applications via a web browser and includes functions such as accounting and invoicing (think Quickbooks Online), human resource management, content management, and other functions. This typically covers the needs of most small businesses that are not in the IT field. [3] [4]
Platform as a Service is the deployment of a computing platform or solution stack on the cloud. Often, it offers the increased ability for development and team collaboration. In simpler terms, PaaS is used to support multiple users simultaneously. PaaS also offers developers greater flexibility by allowing them to work in any programming language, any database, and any operating system. [5]
Infrastructure as a Service typically involves a platform virtualization environment. Clients buy resources such as servers, software, data-center space, and networked equipment as a fully outsourced service that is often billed based on resources consumed.
The Bottom Line
The bottom line for small businesses depends on increasing revenues and cutting expenses. If used properly, modern hosting platforms can contribute directly to the bottom line through savings. The old model involved buying servers, routers, and storage equipment. It meant expensive software that ran in the hundreds, if not thousands, of dollars, plus the cost of updates.
With cloud computing, small businesses can limit the risk and financial impact by renting these applications. Online application stores allow small business owners to discover professional applications and services for areas such as customer resource management, marketing, accounting, and collaboration. [4]
Scaling
Scaling is arguably the most attractive feature of cloud-based computing for small business. As Microsoft’s research revealed, growing companies want a scalable environment that meets expanding needs with a pay-as-you go pricing model and one that also eliminates the need for major investments in IT. [2]
This chart shows a model for “on-demand” computing infrastructure. Note that the infrastructure costs rise only as actual demand increases and are not based on anticipated demand.
A company engaging cloud-based computing services pays only for what it needs. What this means is that costs increase only as business grows. This allows for tremendous flexibility for businesses using a new application. The business can start with fewer users, features, or support, and upgrade as needs increase.
Furthermore, the cloud is a great option where frequent spikes or surges in computing demands are a normal part of business. Cloud computing services have the ability to quickly increase resources as demand increases, and then scale the resources back as demand recedes. Often, this change in available resources can be automated by creating trigger actions. [4]
Convenience and Flexibility
In many ways, the cloud “understands” that business has gone global, mobile, and is a 24/7 pursuit. Applications on the web can be accessed from any computer and from many mobile devices. The cloud helps small businesses mobilize their employees, thereby reducing operating costs. [6]
Additionally, many small businesses will find it easier and more convenient to access data stored on the cloud or with application providers. Employees, vendors, and others will be able to access the data stored on the cloud. For example, a CPA would be able to access a company’s cloud-based accounting records, therefore eliminating the need to transfer paper files back and forth. [3]
Cloud computing also makes it easier for small businesses to engage in conferences and business meetings without expensive travel costs. By launching web-based, cloud-powered conferencing platforms, users can give online presentations and conduct meetings and trainings to anyone with a computer, and small business owners can connect quickly and affordably without the need for travel to other locations. [3]
Additionally, the cloud offers reliability. A business owner will no longer need to worry about a server crash losing important documents and files. [7] Documents created in and accessed through the cloud are also saved in the cloud, providing for continuous access and prevention of accidental erasure of files. [6]
Working Together
The cloud makes collaboration with vendors and experts easier. It also makes teaming with remote employees a realistic alternative to pulling everyone into a central office. A small business may grow to develop its own applications through PaaS and then host those applications through IaaS on the cloud. [3]
Furthermore, simplified document storage makes it easier for employees to upload, store, and share important documents, videos, and files. [6]
Security Concerns
A responsible business should always be concerned with online security. When a story about wrongful access to information breaks, it generally makes headlines and can have a negative impact on a company’s reputation. However, the cloud is a safe computing platform, and in most small businesses a reputable cloud vendor will offer a much higher level of security than what can be achieved in-house. [3]
This chart shows the different layers of cloud security in one cloud platform. The different layers require passwords for access.
Similarly, when an application goes down or is temporarily offline, the headlines and Twitter broadcast this immediately to the world. However, this is unlikely to occur with a reputable vendor, as there are frequent redundancies in place – redundancies a small business can’t generally afford to build on its own. A thorough review of the vendor’s Service Agreement will inform a business owner about important factors such as back up plans, redundancies, and how emergencies are handled. [3]
Hybrid Hosting
Using cloud computing offers small businesses many benefits and advantages that they would not be able to afford otherwise, but there are situations when a company is better served by having a dedicated server running an application. For example, if a company needs to guarantee that its sensitive data will be secure, the data should be kept on a server used exclusively for that data. Furthermore, a business website that generates heavy traffic may perform more efficiently if it has its own server. [8]
For these situations, hybrid hosting is a viable alternative to using only cloud computing. Hybrid hosting involves using a combination of cloud computing plus dedicated servers. It has the same advantages as cloud computing – scalability, affordability, increased availability of services, etc. – but instead of having a business share a server with other companies, the Internet service provider (ISP) dedicates an entire server to the company’s network. The ISP is responsible for the maintenance and security of the server, and the company is reassured that its data is as secure as possible. When the company needs to add services or scale up, hybrid hosting can accommodate this. [9]
Why Wait?
The cloud is a great equalizer. It allows small and mid-sized businesses to innovate, grow, and compete with their much larger counterparts. They can expand and contract computing power as needed based on demand, and access platforms and infrastructure that were previously unaffordable to them.
Keeping up to date on emerging technology, as well as maintaining current technology, is an expensive and time-consuming task. It is an area in which many small businesses struggle, which takes a toll on their bottom line. However, cloud computing services level the playing field by removing the costs of technology investment and maintenance, giving small businesses the flexibility they need to grow.
- Sources
- 1. http://en.wikipedia.org/wiki/cloud_computing
- 2. http://smallbiztrends.com/2011/03/microsoft-global-smb-cloud-adoption-study-2011.html
- 3. http://www.getapp.com/blog/cloud-computing-help-grow-small-business/
- 4. http://en.wikipedia.org/wiki/software_as_a_service
- 5. http://en.wikipedia.org/wiki/platform_as_a_service
- 6. http://esbjournal.com/2011/02/5-reasons-why-clouds-in-the-forecast-is-good-news-for-small-business/
- 7. http://www.youtube.com/watch?v=g17alupnbyg&feature=related
- 8. http://hosting.reviewsgurus.com/guide/hybrid-hosting-best-of-managed-cloud-8.aspx
- 9. http://www.gogrid.com/cloud-hosting/hybrid-hosting.php
) After all of the long hours our team spent wrenching and welding, getting sunburned and dehydrated, we still had a damned good time and we’re looking forward to doing it again. Maybe we’ll get to go head-to-head with other hosting providers the next time, 
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