Skepticism Aside, Cloud Computing a Plus for SMBs

Matthew Probst

Cloud computing seems such a hazy term, evoking images of algorithms floating amid large fluffy cumulus clouds. But it's really an easy concept to grasp  -- and it holds major advantages for small and-medium-sized businesses, even though most know very little about its advantages.

The term -- inspired by the cloud symbol used often to represent the Internet in diagrams -- describes anything connected with delivering hosted services over the Internet, whether infrastructure, platform or software.  A cloud service differs from traditional Web hosting because it's sold on demand (almost instantly available when you need it); has utility billing, meaning that the user is only charged for the time and resources used, usually by the minute or hour; is flexible so a user can decide how much or little of a service it needs; and is managed fully by the provider. And as interest in cloud computing grows, so do advances in virtualization, distributed computing and access to higher-speed Internet service.

Enterprises are accelerating their adoption of cloud computing because it can strategically cut costs and drive innovation. In addition, more offerings have been launched for use in enterprise environments. A recent Forrester study found that 5 percent of enterprises have adopted pay-per-use hosting of virtual servers and 3 percent more intend to within the next year.

SMBs Seem Perfect Outlets

But SMBs would appear to be the perfect customers for the cloud. The initial costs are minimal and risks are low. Deployment is also especially fast, implementing in a few weeks or less, with a service that can scale up or down in real time. It promises business results with an almost immediate return on investment, and in this current economic climate, fast ROI is critical.

Why then have so few SMBs moved to a cloud infrastructure? The Forrester study also found that only 2 percent of SMBs surveyed have signed up for pay-per-use hosting and only 2 percent more expect to do so within the next 12 months. Many SMBs simply lack complete trust in cloud computing.

The majority listed their chief concerns as security, slow performance, possible data loss, and not being able to access their data during Internet outages. Indeed, more than half said they would be moderately impacted and nearly a quarter said they would be severely impacted if their Internet access was down for only one hour.

As for the most important criteria for employing cloud computing, SMBs ranked trust and security at the top, followed by ease of use, price and performance, customer service and scalability. How can SMBs be reassured about the cloud? The vast majority of respondents in a survey conducted by Egnyte, a provider of on-demand file servers, recommend creating hybrid online/offline applications that would be available even when the Internet wasn't. A majority are in favor of live, around-the-clock customer service, and one in four want formal certifications. Interestingly, less than 10 percent of respondents favored customer ratings and money-back guarantees.

Vendors Must Deal with Security, Trust, Performance Issues

If vendors can deal with the security, trust and performance concerns, SMBs are likely to begin signing up for cloud computing services in droves. That's because they look to minimize cost and complexity as much as possible, and they can best do that by eliminating the need to own or manage things except the basic technology, such as desktops, laptops, smartphones and the like. SMBs view the cloud as outsourcing, pure and simple, and they will embrace it if they trust it.

A clear leader among cloud service providers to SMBs hasn't emerged yet and it may take a few years and the debut of many more software refinements before the leaders surface. Cloud service providers have a particularly tough job ahead convincing SMBs that their service will be treated with extreme care and not packed onto oversubscribed and underpowered servers.

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Aug 17, 2010 11:08 AM we are cloud we are cloud  says:
We blogged recently about the future of the cloud in SMBs and what opportunities it can afford them, you might be interested in reading it - Reply

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