Is Cloud Computing For Small Business?

“Cloud computing” has rapidly emerged from the “what are you talking about?” stage to become a business buzzword. A new survey by Goldman Sachs forecasts software-as-a-service (SaaS) sales of $106 billion worldwide in 2016, up a phenomenal 21% over 2015 estimates. So why are small business owners so reluctant to use cloud services that can make them more nimble and efficient? Let’s talk a look…

Forecast Calls for Increasing Clouds

Huge corporations do cloud computing. You do it when you check your email on Yahoo or Gmail. Teenagers do cloud computing every time they post to Instagram or Facebook. Just about everyone is letting IT specialists handle the complicated, finicky, expensive backend stuff while they merely connect to it via the Internet and pay for what they use.

The Goldman Sachs survey shows that spending on cloud computing infrastructure and services will grow at a 30% compounded annual clip, compared to 5% for all other enterprise IT spending.

Everyone is hopping on the cloud, except small business owners.
Cloud Computing for Small Biz

Another Forbes article reports that only 37% of small businesses (1 to 99 employees) have gone “all in” on cloud computing today, spending $43 billion on it. About 65% have moved backend functions such as accounting to cloud-based apps. The article optimistically predicts that 78% of small businesses will be cloud-based by 2020, but what’s holding them back now?

A lot of misperceptions, apparently. Surveys indicate that many small business owners think “the cloud” is less secure and reliable than their in-house systems. They cite increasingly frequent reports of massive data breaches at companies like Target and Home Depot as their reason for keeping sensitive data “off the Internet.” But those victims of hackers are not cloud-computing services; they’re more like small businesses in their IT management.

IT is a cost center to Target; it’s a revenue source to Salesforce.com. When hackers penetrate a company like Target, it’s always because some basic security practice was overlooked. That happens not because corporate IT workers are stupid, but because they’re overworked and there aren’t enough of them to cover all the bases. Many small businesses have the same staffing vulnerability; heck, a lot don’t have a full-time “IT guy” at all.

The Internet is Down (because the power is out)

“Well, if the Internet goes down so does my business” is another objection that does not survive scrutiny. When was the last time the Internet “went down” at your office and all your computers stayed up, so that you could have done business if not for that flaky Internet? How about the times your in-house system froze even though the Internet still worked? Business interruptions due solely to loss of Internet access are extremely rare, and generally short-lived.

Cloud-computing service providers invest heavily in IT staff, security, and reliability because that’s what they sell. The difference between 99.9% and 99.99% uptime is a meaningful competitive edge in cloud services.

Cost is usually the real objection that small business owners have to moving into cloud services. Sure, you paid off those Pentium 4 computers years ago, and Windows XP doesn’t require an annual or monthly fee. Your IT infrastructure is “free and clear” now, so why spend money you don’t have to spend?

To make more money, of course. That’s what companies do when they invest in SaaS, because the hardware and software they get to use are more efficient and the workflow logic built into them makes employees more productive. Cloud users also get the benefits of mobility, collaboration, and nearly real-time cash flow.

So, if you have objections to moving to the cloud, take a good look at them to see if they’re made of straw. The odds are good that the only thing holding you back is fear, and your fears are unfounded.

Your thoughts on this topic are welcome. Post your comment or question below…


More Posts about Cloud Services:

  • Is Cloud Computing For Small Business?

  • Google Drive for Work vs MS OneDrive for Business

  • Eight Free Cloud Services You Should Know About

Comments

  1. Thanks Bob, I needed that! Your article sites the fears that I have/had which keeps me from jumping into the cloud. You’re quite the sales man. Thanks again.

  2. MmeMoxie says:

    I see that Cloud Computing is really coming into it’s own, these days. I can understand the “fear factor”, for a Small Business owner, but, “nothing ventured … nothing gained.” Plus, the Small Business Owners can always, use External Hard Drives as back-up, too. Accounting, proposals, development, contracts and a whole lot of other ideas, and projects can be saved and protected, by Cloud Computing.

    Two-Factor Authorization can be done, with Cloud Computing, which is an excellent method for security, of vital company information. One only needs to search for a Cloud Computing service, that provides Two-Factor Authorization.

  3. Steven Finell says:

    Most of the individuals and small business owners who say they fear “the cloud” are already using it for their most important communications: email. Unless you have your own mail server hardware and software in your home or place of business–if you are not sure, then you don’t–you depend on “the cloud” for sending, receiving, and in many cases storing your email. Your email may be hosted by Google (Gmail), Yahoo, AOL, Microsoft (Outlook.com, Hotmail, Live Mail, MSN) or any of the innumerable Internet service providers (ISPs), from the largest (AT&T, Verizon, nationwide cable TV providers) to the smallest.

    Furthermore, those who fear “the cloud” the most almost certainly have poorer data security now, based on objective criteria, than any well known “cloud” provider, including the much maligned Dropbox. Hint: unless all your storage devices–including all the drives on desktop and laptop computers, all mobile devices, and all removable storage media–are fully encrypted, you lose: even Dropbox is safer. If you aren’t sure whether your devices are encrypted, they aren’t.

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