Does cloud computing benefit small businesses?

Jodie Humphries

Cloud computing, ranked number two by Gartner in the top 10 technology priorities, listed as the technology that companies must implement over the next year and the technology that many companies such as Amazon and IBM are investing in heavily. Yet, according to a new study, small businesses are less likely to use cloud computing.

A poll conducted by the developer GFI Software found that while 86 percent of businesses employing between 100 and 249 people use IT services hosted off-site or managed by a third party, such services were used by just 39 percent of companies with less than 10 employees, silicon.com report.

In order to conduct the report, GFI Software canvassed the views of up to 250 small organisations with fewer than 250 employees.

Against cloud computing

The main reasons cited by businesses for not taking up hosted or managed services was either that their needs were met by their existing in-house infrastructure, or that the cloud service was too expensive.

With cloud computing commonly regarded as a way for businesses to save money - due to the fact the organisation no longer needs to buy and maintain its own back-end IT infrastructure - the finding that SMEs believe a move to the cloud would be too expensive suggests a lack of understanding about the cloud computing model.

The notion that SMEs are unfamiliar with cloud is reinforced by the survey finding that 62 percent of business decision makers at SMEs claimed not to have heard of the term 'cloud computing'.

"The majority of SMEs are resisting what should be an inexorable shift towards the cloud," the report continued.

The most common type of hosted or managed services being used by SMEs are email filtering and anti-spam, network security, back-ups and web filtering or monitoring, the report found. Server and storagevirtualization were the services with the lowest cloud take-up among small businesses.

The SMEs felt the main disadvantages of relying on a managed or hosted service compared to running services in-house were the increased risk of vendor lock-in and heightened data privacy and security risks.

Considering a move to the cloud

Robert Whiteside, Head of Google Enterprise, UK, Ireland and Benelux has put together the following 10 things to consider when getting started in the cloud, 'Top tips on cloud computing for small businesses' reports.

• Moving to the cloud is easy: The transfer of business information into the cloud is very straightforward. There is no need to install new hardware or software as everything is run by the cloud provider.

• Cost savings could be higher than you anticipate: Businesses that move to the cloud can make savings on many different levels - IT hardware and software expenditure is cut dramatically and fewer staff or support resources are needed for IT maintenance. Last September, analyst group IDC estimated that business can instantly reduce their IT spend by approximately 54 percent by moving to a cloud based solution.

• Improved productivity: One of the key benefits of cloud computing is that employees can access documents and emails whilst away from the office. If your business demands mobility and flexibility or you have staff keen to extend their use of home or remote working, the cloud could be a straightforward and affordable way of addressing these needs.

• Greater level of security: Cloud computing can be more secure than traditional IT. It's all about economies of scale - many established cloud suppliers employ leading security experts, invest vast amounts of money into securing their applications and develop technology beyond the means of any small business. In addition, the risk of losing confidential data on a laptop or aUSB stick is also diminished, as everything is stored in the cloud and not on your devices.

• Manage the cultural adjustment: Today's employees expect to have the same technology at work that they enjoy at home. Google designs its applications with users in mind and many staff will already be familiar with Google Mail and Google Docs. However, internal communication about the change of service and in-house training sessions will help staff to feel more comfortable using the new technology.

• A more collaborative way of working: Using cloud computing applications, people can work more closely together, accessing and working in the same documents in real time - without the need for hundreds of emails with attachments. Improved knowledge sharing and communication encourages creativity amongst your employees which can help drive the business forward.

• Flexibility to scale up or scale down your business: Cloud based "pay as you go" style services allow you to easily increase your use of cloud services as your business grows, or decrease your spend if you need to temporarily scale down.

• Employees of tomorrow: Look at how teenagers interact - on Facebook, Bebo or MySpace - all cloud environments. These teenagers will soon become employees, accustomed to collaborating online and accessing their data from any mobile device at hand, not expecting to work in one location and from nine to five.

• Your business resiliency can be improved: Cloud computing providers should not only offer 24/7 support but also the increased resiliency and redundancy afforded by multiple data centres to ensure your information is always available. This means that you experience less downtime than when managing IT in-house, and any problems can be solved far quicker by being fixed centrally.IDC estimates that businesses operating in the cloud achieve 97 percent greater IT reliability.

• More choice: In contrast to traditional IT models which can involve expensive software licenses and long lock-in contracts, the cloud model offers far more flexibility. You can switch provider far more easily and regularly in order to get the best experience and value for money. However, it is important to check with your cloud provider as to how you retrieve data from their cloud should you choose to switch in the future.

Previous report on small businesses and cloud computing

A previous report on cloud computing with small businesses in January found that half of small businesses will be in the cloud by 2011 and that plans to implement cloud computing are up two thirds in the last 15 months, is4profit.com reports.

Chris Stening, managing director, Easynet Connect,who conducted the report, said "Cloud computing has been on the business radar for some time and our report proves that we are at the tipping point for mass adoption amongst small and medium sized businesses."

He went on to say, "Small businesses are using up more bandwidth than ever before, with applications like video conferencing, IP telephony, media streaming and large file transfers all competing with cloud applications for vital bandwidth. Businesses should specifically consider their upload and not just download speeds, as these can be vital for supporting cloud computing and sending data efficiently. Symmetrical internet connections such as SDSL and leased lines are therefore increasingly attractive for small businesses today. Many companies will reach a point where their internet connection is the most important part of their business continuity plans, which is why it is vital they are aware of how their bandwidth is being used and how reliable it really is."

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