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Why Cloud-based Software is Best for Small Businesses

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When purchasing software for your business, you’re often going to face a decision between cloud-based and on-premise software. At first glance, it might seem like the on-premise option is a better choice. After all, if it’s housed close to where you’re using the software, it should be faster, right? Unfortunately, that’s not always the case, and on-premise software can come with a variety of issues that cloud-based software doesn’t. Cloud-based software is usually the best option for small businesses.

Table of contents

  1. What is cloud-based software?
  2. Why small businesses should look for cloud-based software
    1. Keeps on-premise server space clear
    2. Better security protocols
    3. Less downtime
    4. Remote access
  3. Some downsides to cloud-based software
    1. Less control over backups
    2. Access is dependent on the internet
    3. Expensive migrations
  4. Choosing cloud-based software for your business

What is cloud-based software?

Cloud-based software, also known as software-as-a-service (SaaS), is any type of software that can be accessed through the internet instead of being installed directly onto a device. It’s centrally hosted by the companies that sell the software, rather than the business purchasing it. Cloud-based software is available in almost every software category, from customer relationship management (CRM) and accounting tools to document sharing and project management platforms. Most software companies now realize how limited server space can be for a small business, so they offer cloud-native options.

Why small businesses should look for cloud-based software

Cloud-based software is a better option for small businesses for a variety of reasons, including but not limited to server space, increased security, less downtime, and work from home capabilities. Most of these benefits also lower costs and increase revenue for your business.

Keeps on-premise server space clear

For small businesses, on-premise server space is precious. If it exists at all, it’s usually very limited. Increasing server space is very expensive, because you have to upgrade and buy new hardware. Most software companies know how scarce this server space is for their small business clients, so they offer cloud-based options. Cloud-based software can keep costs low because it doesn’t take up any on-premise server space. Additionally, cloud software companies either don’t charge extra to store your data, or they’ve built that cost into the plan.

Better security protocols

Most small businesses can’t afford to invest in the same security measures that large companies can. With cloud-based solutions, the vendor usually handles the security for their platform. Small businesses can enjoy a greater level of security than they would if they hosted software on their own servers. Because it’s all stored in one place, it’s easier to defend from cyber threats than data and software that’s stored in a variety of locations.

Also read: U.S. SMBs are Ignoring SBA Cyber Security Guidance

Less downtime

As with security, many small businesses don’t have the IT resources or infrastructure that enterprise companies do. If an internal server goes down, it can take them a long time to get the help they need and get it back up and running. Cloud software has one job: to keep that software running at all times, so you can focus on other aspects of your company. Therefore, vendors have an entire IT support team and development team on staff to fix issues as soon as they show up. This can decrease the downtime your company has to deal with when there’s an issue and keep your operations running smoothly.

Remote access

With the COVID-19 pandemic, more employees now work remotely than ever before. Despite this, the actual work hasn’t changed. Cloud-based software allows your employees to work from anywhere as long as they have an internet connection. Most software platforms even offer mobile apps, so your employees can work from their phone if necessary. Even outside of a pandemic, this allows businesses to widen their recruiting pool and ensure they’re hiring the best candidates.

Also read: 34 Percent of Employees Would Take a Pay Cut to Work Remotely

Some downsides to cloud-based software

Generally, cloud-based software is better for small businesses. However, there are a couple of drawbacks you need to be aware of, so you can make the best decision for your company. 

Less control over backups

When you house your servers on-premise, you have complete control over how often you backup the data and where you store those backups. Cloud software companies have their own procedures for backing up your data, and they may not be willing or able to alter those to fit your needs. This means you may not have access to a backup when you need it. If the backup is available, it may not be the most recent iteration of the data.

Access is dependent on the internet

In order to access cloud-based software, you have to connect to the internet. If the internet at your office goes down, you won’t be able to get to the data you need to complete your work. If you’re dealing with a major outage, you could lose out on a lot of production time. Companies in rural areas or places with inconsistent internet connections may not benefit from cloud-based software.

Expensive migrations

If you’re just starting out your business or are purchasing a piece of software you’ve never used before, you won’t have to worry so much about migrating data. However, if you’ve been using on-premise applications for a while and have decided to move to the cloud, that move can be expensive and time-consuming. You’ll want to do a cost-analysis before you decide how to proceed.

Also read: Controlling Cloud Migration Costs: Best Practices

Choosing cloud-based software for your business

When it comes to choosing software for your small business, consider your infrastructure and your needs. Do you have an IT team that can handle issues as they arise? Do you have more server space than you need? If the answer to either of these questions is no, you should be looking for software that can be housed in the cloud.

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