As a business owner, you always need to use the most effective methods of computing to keep your business as efficient and profitable as possible. Cloud computing, in particular, can have tremendous benefits for your company’s earnings and operations. Learn what exactly cloud computing is as well as the benefits and costs.
What is cloud computing?
Cloud computing is the on-demand delivery of IT resources over the internet with pay-as-you-go pricing. You can access technology services on an as-needed basis from a cloud provider. Organizations of all sizes and industries can use cloud computing for processes like data backup, email, virtual desktops, software development and testing, big data analytics, and customer-facing web applications. There are different types of cloud deployment, such as the private cloud, the public cloud and the hybrid cloud. These refer to where the infrastructure is located and who has access to it.
“Cloud computing” as a term has been around since the early 2000s, though the concept of computing services dates back to the 1960s. Between the ’70s and ’90s, there were many advancements in computing technology that led to the creation of cloud computing. The ’90s, in particular, saw companies providing virtual private networks (VPNs), a precursor to today’s cloud computing. Some examples of companies offering cloud computing services include Salesforce, AWS, DigitalOcean, Dropbox, Civis Analytics, Carbonite and Forcepoint. See our top picks for cloud storage and online backup providers.
Tip: Many platforms, like Salesforce’s CRM, rely on cloud computing to keep data accessible and secure. Read our review of the Salesforce CRM for more information.
What are the benefits of cloud computing?
As a small business owner, you’ll find many benefits to cloud computing. Among them, using the cloud can drive your business’s growth. Here are some other advantages.
Cloud-powered productivity sites and suites allow multiple colleagues to work on projects simultaneously, which in turn promotes collaboration within a team both in and out of a physical workplace. Some examples of such services are Google Workspace and Microsoft Office 365.
Cloud computing also allows for quick and easy sharing of information between co-workers. This helps maintain consistency among employees as they work together on projects, even if they’re working from different locations or time zones. This ability is more important than ever in the age of working remotely.
Safety and security
The reluctance of many companies to move over to the cloud lies in a misconception that keeping IT operations under tight control in-house is a safer solution than relying on cloud computing. However, while moving operations to the cloud does mean giving up some technological control, often a third-party firm can look after your data more securely than you could.
Solid cloud providers like Oracle have robust security protocols in place and can clearly outline their methodologies to ensure you have complete confidence in allowing them to manage your data. Our review of Oracle NetSuite demonstrates just one way the company’s cloud-based apps can aid your business.
The overarching goal of any business is to make a profit, and cutting operational costs wherever possible can make that goal more attainable. The most significant benefit of moving to the cloud is unsurprisingly a financial one. The financial model associated with the cloud is predictable and economical. There are no upfront costs, you can choose to pay flat-rate monthly fees per user and/or pay based on the amount of bandwidth used, and there is easy scalability in either direction. Furthermore, switching over from legacy servers to cloud servers eliminates the need for continual server environment refreshes, reduces demand for IT support staff and saves on energy use. This all translates to more money in your business purse.
Cloud computing is widely considered a sustainable option for companies. It not only cuts down your paper usage, but also contributes to energy efficiency. Traditional data hardware systems require uninterrupted power supplies and cooling, which take up a great deal of electrical power. Using the cloud means you don’t have to factor in climate control costs for your technology hardware. Cloud-powered companies that allow their workforces to access their programs and data anywhere and at any time also have reduced commuter-related carbon emissions. Additionally, cloud providers also use less carbon-intense power mixes, which are more energy-efficient.
FYI: Environmental issues in the workplace are a growing concern for employees. Workers want to know that their office is a healthy place to be and that the company they work for isn’t harming the environment. Making the switch to cloud computing is one of the ways your business can have a positive environmental effect.
Flexibility, functionality and efficiency
In the ever-changing business landscape, it can be interesting to witness how some companies adapt – often many years too late. While some operations and market changes are harder to adapt to than others, it is important to stay as nimble as possible. Cloud computing allows you to adapt to market conditions with a certain flexibility that is not available when you use on-site, physical solutions.
Aside from adapting to external conditions, this virtual solution also enables quick responses to internal demands. If user demand increases, cloud services can be increased to meet it and then be easily decreased as demand drops. This eliminates the problem of over-provisioning or IT systems overload. In other words, cloud computing allows your company to be flexible, alter functionality and adjust efficiency as circumstances change.
Losing important data to a fire or some other disaster at your business premises can devastate your company. Data backup service providers have preached this message for a long time, but with the availability of cloud services, it is now much more convenient to heed the warning.
Oracle, mentioned earlier, is one of the leading providers of data services, and its focus on innovation and security means cloud storage is being made ever more disaster-resistant. Virtualization technologies enable the incorporation of cloud-based recovery models, which keeps a cloned version of all your data readily available at data centers should something happen due to a natural disaster.
Tip: Create a comprehensive disaster preparedness plan for your small business to withstand anything Mother Nature throws at you, be it hurricane or pandemic.
The main reason companies that invest in big data, security, cloud and mobility gain a competitive advantage is that cloud-based services enable them to seize opportunities faster than competitors. The cloud allows businesses to develop a speed and agility that directly affects their ability to develop products and respond to customer needs in a timely manner. Think of the cloud as a facilitator that helps businesses bring products to market faster. It means that small companies can effectively compete with larger ones.
Big data management
Last but certainly not least, cloud computing makes it easier for small businesses to handle big data. Traditional data storage methods haven’t always provided a simple way for companies to carry out advanced analyses of their databases. In the case of large firms, this process can take many weeks and require highly knowledgeable specialists. The cloud provides the necessary tools to sort through lots of unstructured data quickly and easily. This is yet another area where cloud computing positively affects productivity and profits. Furthermore, the cloud has additional security layers to protect your business’s data. [Read related article: Using Data Encryption in the Cloud]
What are the costs of cloud computing?
The cost of cloud computing depends on the provider you choose and the specific services you need. You’ll have to determine which cloud type best suits your business, how much data you will be saving and your reasoning for switching to the cloud. Your answers will guide you toward a specific solution. However, generally speaking, the budget for cloud computing is typically $5 to $25 per user every month; the usual flat rate is $2 to $50 per month. There are online calculators provided by cloud computing vendors that you can use to figure out how much they may cost for your company.
Besides paying for the technology itself, there are additional cloud computing costs to consider, such as data transfer fees, data retrievals and egress, static resource management habits, over-provisioning, and workload and resource mismatches. To achieve the cost savings associated with cloud computing, it is important to understand how the associated costs work, what influences them and what to avoid. Be sure to also check out our tips to save money on cloud services.
We also recommend weighing the benefits and expenses of each cloud vendor. See our comparison of Azure and AWS as an example.
Chad Brooks contributed to the writing and research in this article.