Sure, cloud computing offers benefits to companies of all sizes. But the clouds’ advantages apply even more dramatically the smaller and newer your company. At the same time, the standard objections to cloud computing matter less to small companies than to large ones.
On the plus side, the cloud’s economies of scale naturally make a bigger difference when your company is too small to generate similar savings and capabilities on its own. And on the flip side, many of the issues blamed on the cloud in large enterprises – security, integration, compliance and so on – often cause fewer problems in small companies that can’t properly deal with them anyway.
1. Economies of scale: This one’s obvious. The larger the company, the easier it can generate economies of scale on its own. Small companies, by definition, have more limited resources. Anything that can give them access to scale in purchasing and pricing is a big win!
2. Enterprise-class functionality. Big companies have the heft to create the custom functionality they need. Small companies simply don’t have the resources to do that. In the cloud, though, they can leverage development, maintenance and upgrades across many, many small businesses… And, increasingly, consumers as well.
3. Money Matters. Startups and small companies are often undercapitalized and pay-as-you-go cloud computing solutions typically don’t require lots of upfront cash. Even if they don’t end up saving much as the monthly fees add up over the long run, avoiding capital expenditures can be a make-or-break issue for cash-strapped small businesses.
4. Infrastructure vs. Applications. For the enterprise, cloud computing often means complex Infrastructure as a Service (IaaS) projects that have to be installed and integrated into a company’s existing systems. For smaller companies, cloud computing often means complete cloud-based Software as a Service (SaaS) applications and application suites. No IT required.
5. The Legacy Issue. A common enterprise objection to cloud computing is how will it work with the company’s legacy applications. Small businesses – and especially new businesses – typically have fewer and less complex legacy apps. Taken a step farther, that means startups and small businesses have less installed infrastructure they’d need to throw out to move into the cloud. As for new businesses, why would you actually buy anything you could “rent” instead?
6. Security Problems. I’m not saying security isn’t important to small businesses (though many don’t take it as seriously as they should). I’m saying that while security in the cloud may still be shaky by enterprise standards, it’s almost always far better than what small businesses are able to provide for themselves.
7. Compliance. Because you don’t necessarily know where your data is stored in the cloud, IaaS can cause confusion as to whether it complies with local, national and international regulations. That’s a huge issue for multinational corporations, less so for most small businesses.
8. Reliability. The cloud is more reliable than most people think. When widely used cloud services and applications have outages, it makes national news. When an individual company – large or small – has a similar problem, they work hard to make sure you never even hear about it. The bottom line, though, is that even accounting for network connectivity hiccups, the cloud is probably a lot more reliable than what small businesses can afford to provide for themselves.
When it comes right down to it, cloud computing seems made for startups and small businesses. It’s the best way to get enterprise class – or better yet, consumer class – functionality without having to develop it yourself or lay out a big chunk of cash to buy it. And even though cloud computing still isn’t fully mature, its remaining issues simply carry less weight when viewed from the perspective of a startup or small business.