Should Small Businesses Move to the Cloud? : Under30CEO Should Small Businesses Move to the Cloud? : Under30CEO
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Should Small Businesses Move to the Cloud?

| January 27, 2012 | 5 Comments

The move seems almost natural. As we conduct our daily activities in the “cloud,” it makes sense to take advantage of the technology and capabilities of cloud computing. For small business owners, there are benefits. Instead of buying all the computing powers and maintaining them in-house, businesses can pay for them on the as-you-go basis. This enables smaller entities to set up their shop and get moving in a very short period of time. The cost and time efficiencies can level the playing field. Mobility gives employees the freedom to work from anywhere they wish. So should business owners make the move?

Here are some questions to ask:

How safe is the cloud?

Information security is crucial to any business. When the data is stored in a datacenter run by a third party, the access to data becomes indirect. This also means that the security control is also out of your hands. As cloud computing grows in acceptance, so is its appeal to hackers. The good news is, many established providers in this field are proactive in continuously addressing these issues and they put security front and center. If you decide to go into the cloud, reading and understanding the service agreement with the provider is key.

What are the costs and benefits?

Going to the cloud services typically means paying a monthly fee. A common misconception is that the cloud is free or cheaper than maintaining existing servers. While it is true that the cloud can save you in a monetary sense, however, scrapping the existing systems and moving entirely to the cloud may not be the best approach. CNN reported that, in April of this year, Amazon.com’s web services (a leading cloud provider) went down for more than 24 hours. Many small businesses that depend on Amazon.com could not operate during the blackout. It is hard to calculate the actual damage of individual business. The suggestion here is to move to a hybrid platform, where daily operational data is in the cloud and critical enterprise information is stored locally. Another idea is to build a private cloud. This is particularly attractive to global firms where, for example, they may need to share research and development data with global affiliates. The data is maintained by the company but the cloud offers collaboration.

What if the connection is down?

A key assumption in moving to the cloud is that connectivity is ubiquitous.  The reality is that we are far from that world. Many places still suffer from frequent connection outages.  Since cloud computing is still evolving, it is possible that the service provider may go out of business or become unable to continue supporting the very application you became dependent on to run your business. One way to mitigate the connectivity risk is to develop flexible contingency plans. The plans should include responses to down time, service interruptions and exit strategies.

Cloud computing offers potential savings, ease of collaboration and increased mobility. Whether businesses move to the cloud depends on each unique situation. Business owners who carefully evaluate the pros and cons of cloud computing can best take advantage of all it provides.

About the Author: This article was written by Keitaro Matsuoka, a full-time instructor at the Rasmussen College – Romeoville/Joliet, IL college campus. Keitaro teaches students pursuing an accounting degree through the College’s School of Business.

Sources: CNN. (2011, April 21). Amazon EC2 outage downs Reddit, Quora [News release]. Retrieved from CNN.com website: http://money.cnn.com/2011/04/21/technology/amazon_server_outage/index.htm

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Category: Startup Advice

  • http://getbrode.com Marc Brodeur

    What kind of a question is that? OF COURSE! So cheap + free IT and hosting. It’s one of the best deals ever.

  • Anonymous

    i’m a .net developer working in a small startup; my company is evaluating Windows Azure cloud services to deploy our next web app. So far, it looks pretty promising.

  • http://www.nearcoastmedia.com/ Matt Hamilton

    I still like having docs local on my computers and backed up to a NAS but I love using cloud services to share with clients and enable access from anywhere. I think that small businesses might benefit the most from cloud services because of the cost savings and flexibility with mobile devices. 

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