Benefits of Cloud Computing To Growing Small Companies
During its early years, a lot of business owners believed that Information Technology is just a financial liability and not an asset of the company. Most of them settled for the least expensive alternative because they believed that the company will still benefit if they chose the alternative. However, things have changed nowadays. IT is now being recognized by a lot of entrepreneurs as a great tool in their business process.
Some of these companies rely on in-house IT infrastructure because they believe they can better control circumstances. When they have control, these companies do not have to depend on third-party suppliers. Neither are they bound with long term contracts. Outsourcing IT work to cloud computing suppliers may pose some complications. That’s why a business owner must always exercise great care in signing contracts. Technology often changes rapidly thus it pays to investigate if the company’s chosen supplier has the capabilities to keep pace with these changes.
Another great concern with cloud computing is security. Thus, choosing the right supplier is really significant for small business owners. The cloud computing vendor must not only have the necessary track record but must also exhibit proven skill through client references or certifications. For entrepreneurs, it is best to request a trial period before finally agreeing on a long term contract. This way, the company can ascertain if the supplier’s services meet its criteria. A legitimate and experienced supplier will readily agree with a trial period. In general, the company must be able to compare the cloud computing software performance with its set objectives. If the supplier’s service does not meet the established objectives then it can be penalized.
A small business which decides to own and manage its own IT equipment may think such decision can’t harm the company. It fails to recognize that over time, these equipments and their components will begin to deteriorate thus causing the system to crash or experience latency. This may pose a bigger problem if the company has remote users and satellite offices. Without much thought, an entrepreneur will surely put in more money by upgrading its equipments and adding extra redundancy. He may even hire additional IT support personnel. The cycle will truly become vicious as new equipments will depreciate and break down after a couple of years.
An entrepreneur can settle for a cloud computing service for better forecasting of an IT budget. In general, IT eats up a huge part of the company’s budget not only because of the costly equipments but its maintenance and upgrade costs as well. Upgrades, security threats, and unexpected system crashes often cost a lot of money. With cloud computing, all these IT capital investments and expenses are borne by the third-party supplier. The business owner will just have to budget for the system’s monthly subscription fees per user. There is also no need to invest on IT in anticipation of a future demand because cloud computing can be deployed when needed.
Cloud computing simplifies budgeting. The business owner need not worry about merging projects or complex expansion because he only needs to pay for the resources his company uses. Also, when users are reduced, the accompanying cloud computing costs are reduced also. The traditional IT process of procurement, installation, management, protection, and support of an on-premise system can be a vicious cycle and contradicts the company’s goal of reducing recurring expenses. Cloud computing services and resources are used only when needed which greatly reduce recurrent expenditures and leverage the company in adapting to frequently evolving conditions of the market.
With cloud computing, a business owner can better manage uncertainties. He exposes his company to greater risks if he invests a lot of money on IT. Because of growing demand, a lot of businesses overinvest in Information Technology which eventually increases expenses and uncertainties of IT management and maintenance. Cloud computing vendors reduce the company’s reliance on on-premise IT systems thereby assuming the uncertainties and costs of IT support, security, backups, and hardware. The business owner, therefore, has no more liability in procurement, management, and upgrade of IT equipments. Growth opportunities can then be pursued without having to bear the uncertainties of important capital outlays.
Cloud computing also reduces energy costs because the company has less IT equipment to maintain. IT servers require specific temperatures to run perfectly. When a business owner decides to use cloud computing services, energy bills are reduced because expensive IT equipments are moved to a safe, monitored, and disaster-proof IT center.
When on-site IT problems arise, it is but expected that employee productivity is affected. Because of this, stress levels are elevated. With cloud computing, employees can do their work anywhere and anytime they wish. They can work from home by accessing the software through internet connection. Travel time and costs are significantly reduced. Employee morale is even improved. Each employee who is given access to the software can even ask the cloud computing supplier’s team for support with regards to the problems which may arise while he is using the system. Management can even monitor remotely each employee’s activity through the management consoles provided by the supplier.
Huge multinational companies have moved to cloud computing because it is less costly, efficient, and agile as compared to onsite IT systems. Therefore, small and medium scale enterprise must follow suit. If cloud computing works for these big enterprises, it will surely work for SMEs.
By Florence de Borja
Latest posts by Florence (see all)
- Negotiating Tips On Software-As-A-Service Contracts - August 9, 2012
- How You Can Take Advantage Of The Cloud - August 7, 2012
- How Can Cloud Computing Help Small And Medium Enterprises - July 30, 2012