How The Cloud Saves SMB's money

OK. You pay someone to store all of your data in the cloud, as opposed to keeping it on your own server and backing it up. And you pay on an ongoing basis. How is that possibly going to be cheaper than just making a one-time investment and keeping it your self? 

Let’s count the ways:

(1)  You lose the hardware expense –a capital expenditure cost.
(2)  If that hardware fails, you are out in the cold. 
(3)  Someone has to maintain that hardware. In house IT labor is expensive. 
(4)  If you need more capacity, you have to ramp up at a tiered level, which means you may need to buy capacity you don’t presently need
(5)  All of that hardware runs on software, which costs money
(6)  All of that software needs to be installed, updated, etc. (see # 3) 
(7)  All of that hardware and software has to run 24/7. Are you large enough to pay for in house monitoring and support 24/7? (See again #3) 
(8)  All of that data has to be protected with security software, which means skilled IT support and expensive virus protection

Ok. The list doesn’t end here, but this blog will. Talk to Net DirXions, Inc about how the cloud can be a really budget saver for small and medium sized firms.

Using the Cloud to Challenge Big Business

Has anyone suggested you begin moving your business to the cloud? Cloud data storage or cloud computing? What is this, anyhow? And isn’t it something for huge companies?

In a previous post we explained what cloud computing is. Simply put, it is the offsite storage of your data, and perhaps even the software packages you use. The primary benefit is pretty straightforward.  It gives you access to enterprise-class technology, pay-as-you-go service.

But is that all it is? There is a much stronger case for a small business to incorporate the cloud in their business model. The cloud allows you to become competitive with the big players in your industry.

The traditional issue holding back small business: they do not have the capital to create the infrastructure to compete with large firms. They are too small to enjoy economies of scale. One obvious area is software and hardware. Historically, the technology used by big business has been out of reach of the little guys. Most SMBs have neither the hardware budget nor internal resources to own a network infrastructure. A small business does not have capital to buy the equipment. Take a simple example: You run a storefront, but think you might be able to sell a bit more if you went online, but you don’t know how much more. You can’t justify the capital to buy the hardware, software, and the labor to design, build, and support it all. The cost of entry to the online world is just too much.

The cloud ends all of that. In simple terms, the cloud lets you rent just as little infrastructure as you need, and then lets you grow as incrementally as you like, paying only for what you use.Essentially, the cloud has become the great equalizer. The high cost of entry created by IT can be eliminated by the cloud.

The Cloud: Are There Security Issues?

For many, the idea of offloading their data to another physical/virtual location can seem like a security risk. It seems counter intuitive that moving data away from “ home” is safer. But is that really true? Any server stored at your location is probably more physically vulnerable than one protected in a large server farm. If you had a fire, flood, or other physical damage that included damage to your server, what would be the result? Also, are your backups stored on–site? If a major event damaged your entire physical location, those backups would be also lost.

There is a second reason the cloud may be safer: security. All of your data, no matter where it is located, may be vulnerable to cyber attacks and data breaches. However, cloud storage providers probably offer some of the most sophisticated security projection available. It is unlikely that a small or even mid-sized firm has the internal resources and research capacity to maintain an equivalent level of security.

So give some thought to the cloud as tool to preserve your data and the integrity of your business (as an added bonus, it likely will be a money saver, too).

Cloud Technology: What Do You Get?

The cloud refers to using off site computing resources and storage to supplement or even replace the use of on-site/in-house resources. Instead of buying hardware and software to support your business, you are basically outsourcing this set of tasks.

There are 4 benefits for the small firm and today we will look at the first 2.

Elasticity – With onsite computing, if you need additional capacity you have no choice but to purchase that capacity in discrete steps, which means bearing the costs of being over-capacity for a period of time until growth catches up. Onsite computing also means you must have the capacity to handle your own peak computing and storage demands, and resources may go underutilized much of the time. The cloud allows complete elasticity in the utilization of computing resources. You buy only what you need, as you need it. You can grow or downsize as the business demands.

Pay as you go – On-site hardware involves significant capital expenditures. The cloud allows you to pay for only what you use. The cloud also allows you to benefit from economies of scale that aren’t available using the in-house model. Labor, equipment and maintenance expenses are shared across a vast pool of users.

In the next few weeks, we’ll return to this subject to look at other ways the cloud brings efficiencies to your technology infrastructure that you could never achieve on your own.