How SME’s Can Benefit Big From ‘Cloud’ Computing (And Why They Are Not)

When big businesses decide to go on the ‘Cloud’, they make headlines in technical journals around the world. When governments decide to go on the ‘Cloud’, they make headlines in both technical and mainstream media, wary as governments are in embracing technology. However, when small and medium enterprises (SMEs) go on the ‘Cloud’, hardly anyone notices.

However, such a move is definitely noteworthy, especially since there are so many of them around. Unfortunately, not many realise the benefits that ‘Cloud’ computing can bring to their businesses in terms of cost effectiveness, operational efficiencies and scalability. Although adoption of ‘Cloud’ computing is growing at an encouraging rate, a lot more needs to be done to leverage this amazing technology for maximum effect.

According to a recent survey undertaken by freelancing site PeoplePerHour.com among 1,300 SMEs in the United Kingdom, it was found that as many as 74% do not use ‘Cloud’ computing. What gives greater cause for concern is that43% of the respondents did not even know what the term “Cloud computing” means.

Also, mere knowledge of the technology was no guarantee of acceptability, considering that 36% of those who did understand what ‘Cloud’ computing is, they did not deem it necessary to adopt it into their businesses. As to the reasons behind this hesitation, security concerns, which have been the bugbear for large corporations, came in second behind cost concerns at 9% and 10% respectively. Also, 2% cited reliability issues as the reason holding them back from embracing ‘Cloud’ computing.

We have already addressed the issue of security concerns in our other article (Is ‘Cloud’ Computing Secure?) where we have stated that ‘Cloud’ computing is no less secure than traditional IT systems. Moreover, there is no system that is 100% secure. This document goes to addressing the cost concerns.

It seems to us that SMEs are “missing the wood for the trees” by concentrating only on immediate costs, ignoring the cost savings and possible increased revenue a migration to cloud computing will bring.

Consider: SMEs will pay for a software or service only when they use it, instead of buying it and keep upgrading it over the years. They will not have to invest in expensive data centres and maintain them internally. And very importantly, they will have access to enterprise technology that their normal IT budgets would not, under ordinary circumstances, be able to afford.

Conleth McCallan, Managing Director at a hosting & connectivity provider, Datanet, commenting on the research puts it succinctly when he says, “Cloud enables smaller businesses to access enterprise-class technologies they previously could not afford to buy and/or maintain.  It may be possible to halve IT infrastructure services costs by effectively buying resources on an ad-hoc basis.” He also adds “UK SME owners, ourselves included, have successfully incorporated a wide variety of technologies into their business models over the past few years. This survey highlights the confusion that many small businesses have over ‘Cloud’ computing”

Speculating on possible reasons, Conleth remarked, “Small businesses are yet to be convinced of the advantages of accessing the amount of computer processing power and memory available online. Although the uptake is improving, the vast majority of small businesses are still voting with their wallets.”

It seems that SMEs need more education on the benefits of ‘Cloud’ computing for increased acceleration in the rate of its adoption.

10 Benefits of ‘Cloud’ Computing for SME Businesses

Reduced Capex & Opex Costs – ‘Cloud’ computing offers tremendous advantages to small and medium size business in terms of reduced costs, both in terms of initial outlay (Capex) and ongoing operational costs (Opex) such as IT resource & power/energy.

Pay-As-You Go, On-Demand – You pay for what you use, its as simple as that.  Should you business need to ramp up, for example seasonally, then you can turn up the bandwidth, users and processing power.

Scalable Storage Options – You can scale your companies storage needs seamlessly rather than having to go out and purchase expensive hardware. In addition there is no need for IT to worry about paying for future updates in terms of software and hardware, your hosting provider takes care of all that.

Remote Access – Employees can access information wherever they are, rather than having to remain stationary much of the time, great if you have home/mobile workers.

Green Computing – ‘Cloud’ computing uses less energy than traditional data centres which is important to many in this day and age.

Ease of Implementation – Without the need for implementation of hardware and various other components which can take several hours.  You can be running your business in almost as much time as it takes to setup a twitter account.

Skilled Vendors – Would you rather these guys manage and protect your data – Microsoft, Google, IBM, Yahoo, Sales Force and Amazon or a potentially limited skilled and over paid IT staff?

Response time – ‘Cloud’ computing accomplishes a better response time in most cases than your standard server hardware.

Even playing field for small start-ups – This allows small companies to compete more effectively with some of the larger businesses, effectively balancing the playing field.

Performance, durability & high availability – Run your websites and SAAS (Software as a Service) applications at a much faster rate with the benefits of using a much more durable and available service.

For more information on how you can benefit from the ‘Cloud’ please contact our Solutions Consultants on