The Cloud According to Small Business Enterprises
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With the rising demand of using cloud computing, security, traditional apps (such as work collaboration and email) and online business paradigms have improved a lot in recent history. The new era of the so-called "as a service" business model was born because of the Cloud-SME relationship.
Let's discuss how SMEs helped the Cloud grow to what it is now.
How SMEs Already Use the Cloud
SMEs are taking advantage. We are seeing this phenomenon not just in the United States, but all over the world. A trend in France shows that a third of all SMEs there are expected to use some form of cloud computing by 2014.
It is safe to say that this trend is evident worldwide. Spiceworks revealed that close to half of all SMEs they surveyed are already using services on the cloud.
Spiceworks also said that the top services being used by SMEs were:
- Web Hosting
- E-mail Hosting
- Data-back up and Recovery
- Content Filtering
- Application Hosting and
- Data Storage.
Life in the Cloud: Benefits for SMEs
We all know how the cloud benefits businesses in general. Not having to shell out money to buy data centers, computers and other hardware and software just to jumpstart a project gives businesses the agility and flexibility to operate. Businesses no longer have to spend a lot of time worrying about the project not working, or whether the investments will pay off or not.
With cloud computing, they can forego these initial investments and just start working on the project. What's more, since they do not have any investments to recoup, they can immediately stop using cloud computing services when they decide to terminate the project.
This flexibility magnifies the fact that most small to medium-sized businesses do not have the capital to invest in hardware and software. The cloud has enabled them to push out new initiatives and implement new ideas without having to spend too much.
Cloud hosting services have also made it possible for SMEs to gain access to enterprise technology that they simply could not afford any other way. Another benefit for SMEs using the cloud is that they only pay for what they use and still tap enough resources when they need it. This means that an SME's website would be able to handle the increased traffic during, for instance, the Christmas season, while also not having to pay for that capability the rest of the year.
Furthermore, businesses can have their employees work anywhere they want. If you are a busy business owner and you have to meet with a supplier out of town, you would simply love the ability to still get onto your computer in your office, access some confidential files and be able to work remotely.
And you get all these at a very minimal investment. You could also have your providers do the implementation for you and get technical support from them. This means that you can get the best and the brightest people working for you and this would all be part of the package. For instance, if you need to host your website, there is no need for you to hire additional IT staff to do so. Instead, there are experts from your cloud web hosting provider who would be able to help you.
What all this means is that SMEs can now access the same technologies that bigger and multinational corporations have been able to use almost exclusively for the longest time. Cloud computing has leveled the playing field in that respect.
How SMEs Have Helped the Growth of Cloud Computing
SMEs are reaping benefits out of using the cloud, but they've been generating valuable business for cloud providers, too.
SMEs are considered to be very essential to the U.S. economy. If you have been paying attention to job reports, you would find that SMEs are creating more jobs than bigger companies. SMEs are also key drivers for international trade.
The United States Small Business Administration also reveals that 99% of all US firms are considered to be SMEs, adding up to more than five million businesses. SMEs also hired half of all employees working in the private sector and are responsible for more than half of the GDP.
How does this translate to cloud computing?
Simple. Providers soon realized that their primary customers are not the multinationals or the large companies who can afford to buy the IT infrastructure they need to operate, but rather the small business. In fact, software developer SAP reveals that 80% of their customers are SMEs. The company also acknowledged that to corner this market, their best bet would be to put their focus on the cloud.
Microsoft also came out with a report that showed that very small businesses using the cloud could triple by 2015, a trend that it says could reflect on other segments of the small and medium enterprises.
The study involved the decision makers in more than 3,000 SMEs in 13 different countries. They found that overall, cloud usage is going to double among SMEs by 2015. Here are those margins broken down:
- Project Management: +92%
- Marketing: +73%
- Email: +64%
- IM: +106%
- Online Backup/Database: +111%
- Webconferencing: 110%
- Voice Communication: +131%
- File Sharing: +111%
So what do providers do to capture this cash cow? Bend over backwards to give them what they want. The problem is that since there are a lot of SMEs out there, what they want is very disparate and varied. This is the reason why we currently have so many different forms of cloud services. Providers broke up the cloud into different "as a service" offerings to ensure that they have the solutions that SMEs are looking for.
In short, SMEs helped the cloud to grow exponentially by demanding solutions that are entirely fit to their needs, giving rise to piecemeal services that are offered to them.
Know how cloud computing affects your business with CompTIA Cloud Essentials taught by leading IT pro, David Davis.