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Cost Savings in the Forecast – Find More Bucks in the Cloud

The definition of cloud computing can be…well, nebulous.  Some call it ‘utility computing,’ some refer to it as ‘software as a service’ (SaaS), still others call it ‘grid computing’ (which was actually its first name, denoted by (MIT).  To establish some clarity, we will look to Gartner, which defines cloud computing as simply “a style of computing where scalable and elastic IT capabilities are provided as a service to multiple customers using Internet technologies.”   Sound simple enough?

Even though awareness is on the rise, some small and medium-sized businesses (SMBs) remain unclear on cloud computing and do not fully understand the benefits it can provide.  That’s unfortunate, because cloud computing is a very wise investment.  Not only does it avoid the upfront cost of having to purchase extra hardware and software infrastructure, but it can more effectively match SMBs’ computing resources to their needs and budgets.  Moreover, instead of pressuring a small (or non-existent) IT staff to perform at a level that will keep up with their larger competitors, SMBs can now access enterprise-class capabilities with low initial investment and massive scalability.

Why Should SMBs Jump on the Wagon?

SMBs typically have the opportunity to get involved in cloud computing through application  service providers and hosted or managed service organizations.  But why should SMBs jump on the band-wagon?  Here are just some of the benefits SMBs can actualize through cloud computing:  

  •   The ability to compute isn’t tied to a specific location, device, or piece of hardware:  Through cloud computing, the location of the computing resources doesn’t matter and you don’t need a lot of dedicated machines at your site.  The cloud (the Internet) acts as your machine
  •    It eliminates the guessing game:  Cloud computing is more of a concept than a process – you know when you send a job out that the computing resources can and will accomplish it.  Think of it in terms of the Internet – to answer almost any question, you are able to access a huge repository of information to find what you need – all with the click of a button.  Similarly, through cloud computing, you use computing resources that scale seamlessly to meet your demand – and never get your hands dirty to acquire them
  •     It’s just easier:  Working in the cloud is like working within a large, open-source, always-on computing platform – you can store and process information over the Internet, which gives your business added freedom because it leaves maintenance, support and expansion to your application vendors.  You can use those freed cycles of time for more strategic activities

Working in the cloud is more efficient, saving time and money for SMBs that don’t traditionally have a lot of IT resources.  Maybe that’s why IDC predicts that cloud computing implementations will double by 2012.

Challenges to Consider

Now that we’ve lifted the ‘fog’ around cloud computing and identified the key benefits for SMBs, here are some easily avoidable challenges to take into consideration:

  •     Staying connected:  Cloud computing implies very fast and complex activity, but efficiency will be hampered if a connection is lost.  Connection reliability is critical to a businesses success when utilizing cloud capabilities.  Additionally, as SMBs prepare for growth, it is beneficial to buy multiple connections to ensure that Internet connectivity will not decrease over time
  •    Security risks:  If applied properly, cloud computing does not increase security risks compared to traditional computing.  Still, proprietary and confidential data traveling across the cloud must be encrypted and operating systems must be designed around a secure core.  As a best practice, whenever a business passes information across a publicly available link, a reasonable amount of data security should be implemented
  •    Understanding and negotiating hosted and managed services:  SMBs may lack the expertise and bandwidth to resourcefully implement cloud clusters internally, but that needn’t be a barrier.  Hosted and managed services providers are a viable, competitive and scalable alternative for businesses of all sizes, and can be especially attractive to small, resource-constrained organizations.  However, working with such providers still requires a sound understanding of the technologies and systems that they provide, so the client organization still requires professional IT expertise on staff

Looking ahead

Cloud computing today is comparable to what the Internet was roughly 30 years ago – it is still in its very early stages.  The capabilities and benefits associated with cloud computing continue to evolve.  Even though it may be a hazy concept presently, SMBs should also consider the multitude of savings benefits cloud computing will provide in the future – and begin to move in that direction along with their larger competitors.

Behind its client interface, cloud computing will undoubtedly become much more sophisticated as time goes on, but SMBs won’t need to master all of those technologies to be successful cloud computing clients.  Their technology partners will also improve the interface to enable delivery to a much broader variety of businesses.

The simple fact that cloud computing reduces spending on hardware and software infrastructure, while increasing computing power and business resilience, is reason enough for it to become more prevalent in the future.  If implemented wisely, cloud computing allows SMBs to grow new functionality, expand resources immediately and prepare for IT advancements they might otherwise forego.  While we’re not saying that cloud computing is your business’s “golden egg,” the benefits it presents can be leveraged today to prepare for future growth and drive IT efficiency.

By David Cottingham, senior director of hosting and managed services

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