Cloud is on the horizon for small businesses
Industry sectors have been experiencing dramatic changes in the way they operate. The UK has seen manufacturing activities move progressively off-shore while design and development remain here. In these situations, an effective communications network needs to be created to span the geographically dispersed parts of the business.
But these business applications are an expensive proposition, especially in the current economic climate. This is making it increasingly difficult for small businesses to compete with large corporations who hold seemingly infinite budgets. But now, with the emergence of multi-tenanted, price-per-user, Cloud hosting, small businesses can enjoy enterprise level services, security and products, at a fraction of the cost.
Now is the time to start "Thinking Big" – and using communications to get there. With Cloud Computing, instead of running Desktops, Applications, Exchange or Voice through physical in-house servers, they are hosted on centralised virtual servers in a data centre. This whole process is instantaneous to setup and effortless to use; you just login, customise and begin. Applications are more scalable, more secure and more reliable as you don't need a copy of an app for every department using it, just one app which is flexible enough for everyone to customise for their own specific needs. You can instantly provision applications whenever you need them as the end user directly controls the resources they require. This allows companies striving to adapt to the pace and dynamism of business today to deploy highly resilient virtual machines for their staff, dawning a new era of flexibility.
Managers are starting to recognise a change in the dynamics of their businesses now that staff can be networked more cost-effectively, no matter where in the world they are. Employees can benefit from increased mobility with access to their individual desktop user profile from any device – Laptop, Thin Client or iPad – from anywhere in the world within range of a 3G network. This makes it easy to connect people and offices in one cohesive, responsive unit in which users share and synchronise emails, diaries and files. Small businesses can hire home-based workers, or open small branch offices, or more effectively connect employees on their mobiles to deliver seamless, customer service as easily as a large corporation. Cloud Computing also boosts employee productivity and innovation by providing access to the latest technology without the need for any investment in upgrades so small businesses get world-class IT on a global scale without having to spend a penny.
IT executives have raised some concerns about the security of their data in the Cloud. But since all data and applications are centralised in a data centre, it is vastly easier to enable and enforce processes and procedures to ensure security, privacy and other best practices. No data is stored on a device, so you never have to worry about proprietary data falling into the wrong hands if the device itself is lost, stolen or breaks. This is especially significant with potentially gigabytes of sensitive corporate data sitting on the desk of every member of staff.
But many executives are still hesitant to take the step: their view is that they would no longer be able to 'touch and feel' the systems which drive their business. Alex Parker, CTO of Commensus PLC is not surprised by this reaction, but feels there is sufficient experience of remote working to allay those fears. "Data centres have been on the scene for three decades or more: Cloud computing is simply a logical progression of that service. There has been little evidence of companies experiencing problems with access to data and with comprehensive service level agreements that specify virtually continuous availability, any remaining concerns should be set aside."
The Desktop Computing era has brought computing power into the hands of the users, but left them still dependent upon IT to provision the back-end infrastructure such as networks, servers and firewalls. Maintenance on in-house infrastructure tends to be daunting and very expensive. What's more, disaster can ensue at anytime from drive failures, viruses, corrupt databases, server patches and the list goes on. You also need to pay for all the hardware and a team to manage it. Since application servers tend to be driven by departmental budgets, IT infrastructures often end up as over provisioned mishmashes of equipment, processes and technology entailing excessive cost and huge inefficiencies with servers running at 15-25% of capacity. Cloud servers, on the other hand, run at 75-90% of capacity. This results in less office space, hardware, staff and power requirements saving a lot of money, and the environment.
Fundamental to the Cloud Computing argument is that software is rented rather than purchased outright. Finance directors will immediately draw a comparison between the two routes and demonstrate that after typically 2.5 or 3 years, the rental payments on exactly the same resources would appear to exceed the capital cost: it would therefore make little sense to accept a rental agreement.
While that break-point may be correct at first sight, Alex Parker of Commensus argues that there are important considerations to be taken into account. "It assumes that any equipment purchased is being fully utilised from the outset. If a company has acquired IT solutions with the capacity to take it forward three or five years, for example, it is paying for resources on which it cannot generate a return on capital. Changed circumstances may mean that the capacity is never fully taken up."
Cloud Computing offers the prospect of moving most IT expenditure from the balance sheet to the profit & loss account. This in turn removes capital expenditure, reducing operational expenditure and gives small businesses the budget predictability they need. IT departments can then concentrate on the front-end issues that will enable business survival and growth.
With Cloud Computing, instead of making one capital commitment to purchase the hardware and another to acquire expensive software, companies effectively rent both the hardware and the software, paying only for the resources that are actually employed. So you don't pay anything when services are not required, doing away with unnecessary overprovision of resources to allow for occasional spikes in requirements. Companies can go from 20 workstations to 80 and back to 50 again in the time it takes to authorise the online paperwork. This "pay-as-you-grow, save-if-you-shrink" model works out much cheaper in the long run.
In the past, it could take a company six to eight weeks to commission an application server. Now, computing power and storage space is becoming a commodity, bought when needed and scaled up when necessary. This dynamic resource management is enabling organisations to respond faster to market changes and gain an advantage over their competitors. It is this agility and scalability that persuades most companies to venture into the cloud.
But Cloud Computing is more than an IT deployment. Moving into the cloud is a cultural shift as well as a technology shift. For IT staff, and especially the chief technology and chief information officers, it requires a rethinking of their roles. 70% of time previously wasted on operational maintenance and upgrades is then available to spend focusing on business strategy. This allows a company to take advantage of new opportunities to innovate and grow.
Most businesses are small (over 98% have less than 100 employees) and they like it that way: they value the flexibility, responsiveness and customer interaction. It is clearer than ever that the competitiveness of an organisation is now less dependent on its size than ever before. By making effective use of today's communications capabilities, small businesses can compete against anyone, anytime, anywhere, of any size. If you think it, you can do it. With the development of cloud technology and the applications and solutions available to small business, the sky really is the limit and size is no longer an issue.