Cloud Computing and Your Small Biz: Is It a Match Made in Heaven?

Cloud computing — you’ve heard of it, you may even be using it without realizing it. What is it exactly, and what potential benefits does it offer for your small business?

As the U.S. Small Business Administration (SBA) points out, cloud computing has been around in some way, shape or form for years. Facebook, Gmail and Flickr are just three applications of the technology that many of us use daily to store comments, photos, videos and other content in the cloud. But that are many other applications, says the SBA.

Cloud computing — you’ve heard of it, you may even be using it without realizing it. What is it exactly, and what potential benefits does it offer for your small business?

As the U.S. Small Business Administration (SBA) points out, cloud computing has been around in some way, shape or form for years. Facebook, Gmail and Flickr are just three applications of the technology that many of us use daily to store comments, photos, videos and other content in the cloud. But that are many other applications, says the SBA.

“Imagine being able to log onto a website and access all the tools and programs that your employees need to do their jobs without having to invest in lots of standalone software licenses,” it notes. “What if you could access all your office productivity tools (email, calendar, word processing, databases, invoicing, CRM, intranet, etc.) from any location or device? What’s more, all the software management and trouble-shooting can be done by the cloud service provider, freeing up your IT resources.”

Cloud computing — and cloud providers like Google, Microsoft and Oracle — make all this possible. And the technology is beginning to catch on, according to a 2011 Cloud Computing Tracking Poll conducted by CDW, a provider of technology solutions.

Twenty-eight percent of U.S. organizations were using cloud computing at the time of the survey, with most (73 percent) reporting that their first step into the cloud was implementation of a single cloud application. Services most commonly operated in the cloud are commodity applications such as email (50 percent of cloud users), file storage (39 percent), web and video conferencing (36 and 32 percent, respectively), and online learning (34 percent).

“Many organizations are carefully — and selectively — moving into cloud computing, as well they should, because it represents a significant shift in how computing resources are provided and managed,” says David Cottingham, senior director, managed services at CDW. “With thoughtful planning, organizations can realize benefits that align directly with their organizational goals: consolidated IT infrastructure, reduced IT energy and capital costs, and ‘anywhere’ access to documents and applications.”

There are also cost savings to consider. The survey reveals that 76 percent of the small businesses implementing or maintaining cloud computing have successfully reduced the cost of applications by moving them to the cloud. The SBA points out that there are three main areas where savings occur:

1. The initial capital investment and the ongoing support infrastructure (your IT headcount) needed to install and run hardware and software is done by the cloud service provider.
2. You only pay for the “seats” that you need on monthly basis. If you bring on new employees you can easily scale up without having to invest in new licenses.
3. If you tend to use software in spikes, you pay only for your usage, making it a more cost-effective model than paying a premium for a piece of software that sits idle most of the time.

Besides shifting IT, data storage and backup to the cloud, what other business tools should you move? The SBA suggests cloud email (Microsoft Office 365 and Gmail for Business), invoicing (integrated time sheets, sales data, automatic billing) and marketing (email broadcasts, social media, virtual events).

Since cloud services are delivered over the Internet and hosted on servers that essentially are shared by subscribers of the service, a discussion of cloud computing isn’t complete without addressing security concerns. As a small business owner, be sure to ask questions of your service provider regarding data encryption, assess the security controls your provider has in place (such as firewall controls) and then match them to protect your business and your customers.