Cloud Computing and its Benefits for Small Businesses
Nowadays, we cannot talk about conducting business and bringing it online without the phrase “cloud computing” being mentioned. When the concept was first introduced, the big companies were the first to advocate it. This led to the misconception that it is applicable to mid-size to large operations, and that could not be farther from the truth. Today, even small businesses can also adapt cloud computing in their operations, and benefit greatly from it.
In this article, you will learn 1) what is cloud computing and 2) the benefits of cloud computing especially for smaller companies.
But, first things first: what is Cloud Computing?
The simplest description we can probably use to give anyone an idea what cloud computing is would be “internet-based computing”, using “cloud” to represent the internet. But internet-based computing is very broad and does not fully define cloud computing.
Cloud computing has been defined as the practice, or a model, of using a network consisting of remote servers that are hosted on the internet for storage, management, accessing and processing of data. It is markedly different from the traditional practice of storing, managing and processing data on the hard drive of a personal computer or, for many small businesses, on a local server. In other words, the major difference is in the sharing of resources; cloud computing allows sharing, while using only your personal computer or local server does not.
Another way to describe it would be to use the term “on-demand computing”. This is because, in cloud computing, shared data, information and other resources are provided to the computers and devices within the network on demand. And since we describe it as internet-based, all the servers, applications, storage and other services are delivered to the recipients or destinations within the organization through or via the internet.
It sounds very complicated, but the concept is pretty straightforward. In cloud computing, groups of servers are made to run on (usually) low-cost and low-end technology (such as your basic personal computers) that have been configured for specialized connections. These server groups make up networks that, through the internet, distribute all the data processing tasks among them.
Currently, there are no fixed standards for cloud computing, which means it is up to the companies to define and design the cloud computing technologies that they are using. Many find this preferable, since it allows for greater customization and, along with it, control by the company. Of course, companies that provide this type of service are bound to have their own standards, which the businesses availing of their services would have to follow or conform to.
Types of cloud computing
In this type of cloud computing, service providers are the ones who are sought by businesses. The service provider is the one to make the applications, storage and other resources, and make them available to the general public, mainly over the Internet.
Many businesses prefer a public cloud because of its ease of use and installation; they won’t set it up or install it, the provider will. There is also the added advantage of being inexpensive, particularly those who are operating within a tight budget. They no longer have to worry about investing on hardware and application, as well as bandwidth costs, since the service provider will have them all covered.
Businesses that are growing will naturally have to deal with increasing needs in their computing resource. By availing of a public cloud, this would not be an issue, since service providers design their offerings for scalability in order to meet the expanding needs of their clients.
Cost efficiency is a bigger advantage in this type of cloud computing as you only pay what you actually use. There are no wasted resources, such as applications or storage that you are paying for but do not need or actually even using, because you will be given only what you need. Therefore, you will not be made to pay for those resources that you were not able to use to begin with.
As the name implies, this type of cloud is one that is managed by the business or the organization that uses it. Seeing as it is owned by the company, full control and customization is within the organization. The benefits are nearly the same as those that are obtained from a public cloud, except for the issue on ownership.
In addition, private cloud also beats a public cloud in terms of security. By keeping the management of the computing resources in-house, you are limiting access and, consequently, security issues and leaks.
It’s a different story when it comes to costs, however, since the company would have to allocate some of its resources to the payment of salaries and wages of personnel it will assign to manage the cloud. In some cases, the organization can even create a dedicated department or division to take charge of the job. There are also other expenses that will have to be incurred in cloud management, such as the cost of virtualization and other management tools that will be used by the personnel managing it.
This combines features of public and private cloud, so it involves the management and maintenance of internal as well as external providers. Aside from personnel employed by the business to manage the cloud, third party service providers are also called in.
This is generally preferred by many businesses because of its flexibility, as workloads are allowed to be moved between the platforms, especially in the face of changes in the company’s computing needs and the costs incurred in managing the cloud.
What businesses who employ this type of cloud computing do is to entrust their less sensitive and critical resources to an external public cloud service provider, while leaving the more critical ones in-house, in the hands of their IT department.
Others employ what is known as “cloud bursting”, where an application or resource is allowed to run in-house (private cloud) at first. However, when the computing capacity must be increased, such as when there is a sudden spike of demand for it, it will “burst” into a public cloud. Now, some managers may think this could be expensive but, as we all know of public cloud, companies will pay only for the resources they actually use.
This type of cloud deployment is highly recommended for business with large or voluminous transactions, or those with complex operations. Of course, businesses would have to first assess their needs before they can decide which type of cloud computing they should use in their company.
Cloud Computing for Businesses
Compute resources are considered by businesses as a utility – one that is consumed but has to be generated or maintained in some way. It has been likened to how businesses use electricity: many businesses, in their desire to ensure that they get the most of that specific resource, they decide to maintain their own infrastructure for power generation.
That works similarly to cloud computing. With cloud computing, businesses do not have to build and subsequently maintain their own computing infrastructures for their consumption of their compute resources.
If we talk in general terms, we can name three main benefits of cloud computing for businesses and other end users.
- Improved IT adaptability. Also referred to as IT elasticity, this refers to the ability of a company’s IT infrastructure to quickly increase or reduce its capacity and services without compromising its overall stability and performance. It should also be able to easily expand its capabilities without affecting the infrastructure’s compliance protocols. It is not enough for the IT infrastructure to be scalable; it should also have the ability to allow for “letting go” of resources or decreasing capacity, especially when they are deemed to be unnecessary.
- Self-service provisioning. Usually, companies would acquire the services of an external IT company or the expertise of third-party service providers for the setup, installation and maintenance of the applications, systems and services they use in business. However, thanks to cloud computing, the users can do it all themselves. It will be the users who will call the shots in the cloud computing environment.
- Users pay only what they use. Cloud computing allows for a metered or pay-per-use structure of payment, meaning the business will only pay for the actual workload and resources that they use, despite the fact that they have access to resources that can only be described as “unlimited”. In the past, it is common to see third-party service providers charging a fixed amount for its periodic subscription fees. However, these days, there is an evident rise in the number of service providers utilizing the pay-per-use payment structure.
CLOUD COMPUTING FOR SMALL BUSINESSES
We have touched on the main benefits that businesses can derive from using cloud computing, but let us try to be more specific and focus on small businesses. The initial reaction of most small business owners when presented with the proposal of migrating to cloud would be to refuse, saying they are still too small an operation to merit using cloud. Others are also of the opinion that cloud computing is only for tech-related operations.
However, once they realize what cloud computing can do for their small businesses, they will definitely be more open to the idea. Let us run through the many reasons why small businesses – yes, even those mom-and-pop shops – should move to the cloud.
1. Lower costs, more savings, higher profits
Small businesses are fully aware that they need hardware in order to facilitate their operations. But hardware does not come really cheap, and so some of them have to forcibly close their eyes and buy more hardware as their need increases. With cloud computing, hardware becomes more efficient. What they used to do using a roomful of computers can now be accomplished with just one or two units of hardware, situated in one corner of the office premises. In some cases, small businesses do not even have to buy new servers or powerful (and often expensive) machines, because by availing the services of a third-party provider, they will only have to pay a fee corresponding to what they used.
So we are talking about less capital expenditure on hardware and software, less physical floor area and rack space to accommodate hardware, and less electrical usage and power consumption. Even upgrading and maintaining hardware costs money, and those are costs that you can also do away with through cloud computing.
Granted, computing services also cost money, and some even find the offerings of some service providers to be expensive. However, a simple cost-benefit analysis is most likely to reveal that the cost of paying these providers will be considerably lower than how much you would spend by going old-school.
Lower costs mean that the small business will register higher net earnings, as well as more savings. It will also be able to put its resources to other ventures that will boost the business further.
2. Increased flexibility and mobility
Small businesses no longer have to be confined in one location: where their store or offices are located. Going mobile is certainly one of the current trends in business, and it is something that is bound to continue long into the future. Therefore, it would be to the advantage of small businesses to be more flexible and mobile.
The most obvious advantage for small business would be the ability to access files, data and other information wherever they are, any time, using any device. This way, managers, employees and other members of the small organization are able to continue working even when they are away from the office. Being able to work remotely has been seen as an effective way to increase employee productivity.
3. Facilitated collaboration among members of the organization
No matter how small a business is, there are still instances when managers are unable to keep track of everything that is going on, or all the projects or tasks they have assigned to their staff. Through cloud computing, file sharing is enabled, so everyone can collaborate more easily.
In the past, it is a painstaking process for more than two employees to be working on something that only has one source file. This time, though, with the right permission settings, multiple employees can do so. And there is no need to worry about overlaps leading to confusion, since synchronization of all data will be done over the internet.
4. Increased data security and document control
Recent developments in cloud computing technology were focused on improving security of data. Clearly, they must be effective, if we consider how even the largest companies in the world are migrating to cloud.
Cloud now has security certificates and encryption processes that make data secure, thus giving small businesses peace of mind that vital and confidential information will remain so. Backup worries will plague managers and business owners less, especially since automatic backups are built into cloud.
5. Increased competitiveness
Small businesses have a tendency to forever remain in the shadows of their larger rivals. Cloud computing somehow evens the playing field, particularly in terms of their IT infrastructure. As such, it gives a boost to their morale knowing that, at least in that area, they can keep pace with their competitors, even if they are much bigger and more powerful.
6. Faster disaster recovery
Businesses invest so much on high-end components for their IT infrastructure partly because of the fear that, in case of a disaster, they may lose all data and information. Recovery costs a lot of time and money, and small businesses often do not have these resources, so it takes a long time for full recovery to take place.
For example, a simple power surge can have potentially devastating effects on a server, and if a small business stored everything in that server, you are looking at a major loss. There are various actions that may be taken to recover them, but that will take quite a while, so you are looking at lost productivity for days, even weeks and months.
The backup and recovery solutions available in cloud make disaster recovery much faster, easier and fuss-free. Not only does it speed up the entire recovery period, it also saves them from spending money on purchasing new hardware, software and programs. Usually, companies call in third-parties who specialize in recovery solutions to take care of the problem, and these professionals do not charge cheap. That is another cost savings right there.
7. Expedited workflow
Going about things the old way takes time, time that you could have spent doing other better and more productive activities. Communication becomes faster, thanks to cloud computing, and collaboration and sharing cuts down on the time it usually takes for employees to handle the logistics of meeting physically in one place, or doing their work at a designated location.
Cloud computing aids greatly in speeding up the whole business process, so the company can bring its products or services much faster to the market and its end users.
Fortunately for small businesses, there are a considerable number of cloud computing services that they can look into, with the most popular one being AWS, to name a few. When choosing which cloud computing tools to use, you’d have to look into their features to see which ones are needed by your small business.