Does Your Small Business Require Cloud Computing?

By | April 8, 2011

Have you been hosting your website or email on some web hosting company and accessing it over the Internet? Congrats! You have already been into cloud computing. In its simplest terms, Cloud is simply other people’s computers (servers) that you access over the Internet. These computers can be owned by Google (Gmail, Google docs), Yahoo (Yahoo mail), Microsoft (Hotmail) or your company’s head office.

Apart from email and web hosting, there are many other functions that once were the sole domain of the desktop computer that can now be done in the Cloud. To name a few: photo editing, email marketing software, sales CRM software, and many more like document creation, spreadsheet and presentation (Google docs), HR and payroll applications, CMS in web designing, inventory management, accounting, invoicing and payment applications, web-based e-commerce solution, etc.

“Twenty years ago when you were setting up a small business, you had to go and buy a personal computer or a small server… and you had to have an IT professional and you had to run it in-house. The right thing for a small business to do now is to not have any computers except the things which are on people’s desktops and on their smart phones… and do everything in the cloud.” says Eric Schmidt – CEO of Google, which claims to have about one lakh clients, from major educational institutions to SMBs – in India itself.

workers compensation softwareCloud computing in India
The total value of cloud computing market in India stands at US $110 million today and is expected to reach about US $1,084 million by 2015, said a study Zinnov on cloud computing in India.

A report from IDC estimated that there would be a rise in public cloud services amounting for about $55 billion by 2014 over traditional IT spending. It was found that there were about 3.5 million SMEs in India among which many of the firms are involved in accelerating the growth of cloud computing technology.

Cloud computing for SMBs
For most of the SMB owners, cloud computing means just an application running from the web and not directly from one’s own desktop or Internet. However, cloud computing solutions have much broader applications of which most of them are still not aware of.

For a majority of the SMB purposes, it is a software solution that has a low monthly fee rather than a one-time capital expenditure for almost any services including finance, administration, marketing, invoicing, etc.

Cloud computing benefits for SMBs

  • No first time big investments (infrastructure, software, IT people). Pay monthly/yearly and access services, applications based on demand.
  • Updates: You also are relieved of the complexity and expense of loading and maintaining software on your own computers. Enhancements tend to happen more quickly and in shorter development cycles and often occur based on customer requests.
  • One of the biggest advantages of cloud computing is that it is available wherever you have access to a computer and browser. If you are not connected and operating your laptop off-line, the program offer a way to run it off-line and synchronize when you are connected again? Many applications have a mobile version through which you can download and run a lighter version of the software anytime and anywhere.
  • •How quickly do you need a solution? Do you need something right now? If rapid deployment is integral to your project, cloud computing offers a definite advantage. Many cloud computing products are up and running in hours, if not minutes. You may not get every feature configured to your need, but you can often start working right out of the gate.
  • •Traditional and larger software purchases usually start with a request for proposal (RFPs), design, development, testing and negotiations. All that can take months. With most cloud computing systems, the customer can generally see the application working during the trial period, and return on investment (ROI) happens more quickly.

Is cloud computing the right choice for your enterprise?
Not cost-effective in long run: Cloud computing applications are not always cheaper than on-premise desktop software. Gartner says it can be true that cloud computing solutions are less expensive during the first two years, but may not be for a five-year total cost of ownership (TCO). It only makes sense when the business will have to start right away in the application with no initial large investment. They suggest that you should expect to see your TCO rising in the third year and beyond.

  • Transition to cloud: If you are a pre-existing business – applications in cloud may sound economical but transformation to the cloud is expensive and takes time and effort.
  • Data security: A major concern which many SMBs show when talking about cloud. 1) The data is held by a third-party vendor and 2) you are accessing over Internet which is a wild-west today.
  • Performance: The speed at which you can access the data on your local drive is never great (at least today in India) compared to the data you access remotely.
  • Uptime: Suppose you are running a mission critical application like a CRM on Cloud – you can never predict the uptime of servers of the service provider or the uptime of Internet at your place or the service provider’s place. Who loses here?

If you are planning to set up a company but are concerned about initial investment on software applications or if you think your company’s growth is affected due to your limited investment on software applications, then you can rely on cloud computing. It brings many benefits through which you can take care of your company’s needs without larger investments in the initial stages.

However, there are certain parameters to consider before consider going to cloud like

  • How long will you rely on cloud computing? Does it match with the TCO when you go for in-house solutions in the long-run?
  • What is the impact on your business and your customers, if data is lost or a data breach occurs on the cloud services provider’s end?
  • Are you planned for a downtime? What will be the impact if the services are down for a day or 2?

You may require many applications, software or infrastructure to run your business. If you have decided (or are thinking to try) to use cloud computing – running all of them from cloud definitely doesn’t sound viable. Choosing which application to shift (or run from) cloud is also one of the major choices to make.