The cloud can change the business model for small firms - Part I
Have you given any thought to the role cloud technology could play in how you run your business? This blog is the first of two that looks at ways that the transform how you utilize IT in your operations. But first, what is the cloud? The cloud refers to using off-site computing resources and storage to supplement or even replace the use of on-site/in-house resources. Instead of buying hardware and software to support your business, you are basically outsourcing this set of tasks.
There are four different ways that the cloud can contribute to the success of a small business and help make them competitiveness with large companies with deep pockets for capital investment.
Elasticity. With onsite computing, if you need additional capacity you have no choice but to purchase that capacity in discrete steps. When you add hardware, for instance you get the capacity which any individual piece of equipment represents. You can’t just add the precise amount of capacity or storage that you need at that time. This means bearing the costs of being over-capacity for a period of time until growth catches up. On-site computing also means you must have the capacity to handle your own peak computing and storage demands, and resources may go underutilized much of the time. The cloud allows complete elasticity in the utilization of computing resources. You buy only what you need, as you need it. You can grow or downsize as the business demands.
Pay as you go. On-site hardware involves significant capital expenditures. The cloud allows you to pay for only what you use. The cloud also allows you to benefit from economies of scale that aren't available using the in-house model. Labor, equipment, and maintenance expenses are shared across a vast pool of users.
In the next few weeks, we’ll look at other ways the cloud brings efficiencies to your technology infrastructure you could never achieve on your own.
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