Tactical Advice

The Cloud Has Many Silver Linings

From serious cost savings to improved flexibility, the cloud has plenty to offer businesses.
This story appears in the September 2011 issue of BizTech Magazine.
The Cloud Has Many Silver Linings

While many small and medium-size businesses have been slow to adopt cloud computing, the technology has great potential to support a business’s computing needs.

Only 21 percent of SMBs are utilizing cloud computing — whether by tapping cloud providers for infrastructure and software services or by fielding their own small private clouds, according to a recent CDW Cloud Computing Tracking Poll. That’s the lowest percentage of any of the industry sectors surveyed, which also ­included enterprise business, government, education and healthcare. Yet the cloud holds many silver linings for those ­businesses that use it.

Perhaps the most obvious of the cloud’s potential uses within SMBs is the ability to scale up IT as it’s needed. Cloud services are delivered on demand on a pay-as-you-go basis, so a business that needs ­service for two dozen — or 200 — users can purchase just that amount, rather than making a hefty up-front investment in more gear than is needed at the moment.

The savings don’t stop there. Businesses that switch to the cloud may see a major drop in their ­energy bills, as they have less of a need to use their own servers and storage hardware. Additionally, a study by Pike Research last year forecast that “adoption of cloud computing will lead to a 38 percent reduction in worldwide data center energy expenditures by 2020, compared to a business-as-usual scenario for data center capacity growth.”

Buying cloud services is not only more cost-­effective, it’s also quicker and more flexible. Cloud users don’t need to spend weeks planning and ­ordering IT equipment, then wait for their hardware to arrive, then wait longer still as it gets set up and tested. The service is available as soon as it’s purchased. If a company needs to add more users as its business grows, it can purchase more seats.

And those seats don’t have to stay in one place. When data and applications reside in the cloud, users can access them from anywhere — all they need is a web connection.

The cloud can also improve a business’s ability to provide high-­availability services to users and customers. If an office’s e-mail server goes down, messaging goes with it. But the redundancy offered by the cloud means users likely won’t miss a beat (or a message) if a server fails. And what about the time the IT staff would have spent addressing the server crash (or even on routine maintenance)? With cloud technology in place, that time can be spent improving the business instead.

Savings Today and Tomorrow

Cloud computing also helps businesses save money on applications by delivering them as a service.

The result can be dramatic: Among those surveyed, 75 percent of small-business cloud users and 100 percent of medium-size business users say they reduced app costs by moving to the cloud, according to the CDW poll.

The savings — in capital expenses, energy and applications — are immediate, but there are also longer-term savings possible. The CDW poll found that small-business IT decision-makers expect to save 20 percent of their IT budgets over the next two years by moving to cloud ­computing, and those savings are ­expected to increase to 26 percent in five years.

For medium-size businesses, the savings prospects are even higher, from an expected 20 percent of IT budgets in two years to 31 percent in five. As more companies begin examining the path to the cloud and how it might impact their business, they can take comfort in knowing that the benefits are plentiful.

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About the Author

Jill Billhorn

Jill Billhorn is vice president of small business at CDW.

  

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