Over the past year, cloud computing has been positioned as a panacea for corporates looking to cut down on IT spend and infrastructure. While big companies certainly stand to gain from the technology, small to medium-sized enterprises are arguably the best candidates for cloud computing in its current forms. For those who aren’t familiar with the term, cloud computing essentially involves the delivery of computer applications as a service to a community, entrusting services with a user’s data, software and computation over a network. The most common examples that most of us interact with on a daily basis include services like Gmail and Dropbox. There are also more complex forms, such as renting servers, software, applications and databases, all of which can be extremely useful to fledgling start-ups and SMEs.
“In most cases, the cloud does reduce costs as it gives businesses access to economies of scale and improved services, and the cloud provider becomes responsible for upgrades and support,” explains Rick Parry, MD at AIGS, the sub-Saharan distributor of Progress Software. “This reduces the need for in-house IT departments or costly equipment and software upgrades and maintenance.”
Frank Rizzo, Partner in Advisory at KPMG Services, believes that scalability is one of the key benefits of cloud computing for smaller businesses.
“You do not think about scalability when it comes to electricity. It’s a case of plugging in an appliance and it works. The same holds true for cloud solutions. These solutions should be able to scale according to customer requirements, peaking during month-end activities and tapering off as less resources are required,” says Rizzo.
This allows companies to focus on their core activities while the cloud takes care of the management of resources. Rizzo contends that more efficient use of resources and reduction of extraneous infrastructure costs are big business drivers and make economic sense to decision-makers.
“Scalability means that entrepreneurs and small enterprises are perfectly positioned to leverage off the power of the cloud as they do not have to invest heavily in IT infrastructure,” he adds. “But while cutting costs is a big driver for cloud adoption, CEOs need to get the total cost of ownership properly understood before even considering the return on investment they are getting from cloud services.”
However, as Parry points out, not all cloud-based solutions are made equal and some companies find themselves running two systems: one on-site for core applications and one off-site with non-critical data, which impacts the cost-effectiveness. In this case, it’s important to work with a cloud provider that can provide a consultative service in addition to the technology.
So if you’re an SME and looking to make the leap into cloud computing, where should you start?
The first step is to determine whether the cloud solution you are considering will make a real impact on your business. Any company can make use of the cloud – provided the cloud solution is meeting an identified need.
“Some companies have rushed to the cloud with their fear of being left behind as their only motivation for doing so,” cautions Parry.
In reality, most companies are already using the cloud in some way without even realising it. For example, many businesses are already dependent on services such as Skype, GoogleDocs and Salesforce. Moving elements of the business to the cloud – such as documents that require collaboration or monitoring and analysing the sales efforts of staff – can be an extremely useful place to start. The important thing, as Rizzo points out, is to begin exploring the many possibilities that the cloud offers, or risk losing your competitive edge in an increasingly tech-savvy marketplace.
“With services such as Apple iCloud, Microsoft SkyDrive, and Google Drive popularising the commoditisation of cloud computing, we have reached the point where implementation has become a question for the CEO and not the CIO,” adds Rizzo. “Cloud computing is not driven solely by technical experts any more but by business leaders who are looking to leverage cloud computing from an overall business perspective.”
Jessica Hubbard
jessicah@finweek.co.za
