Small Business Cloud Computing: Is Wall Street Journal Right?
In case you missed it, The Wall Street Journal recently took a close look at cloud computing’s potential benefits for small businesses. The Journal says only about 7 percent of small businesses have embraced the cloud, and the primary business drivers are disaster avoidance and cost cutting. I half-agree with the piece. Frankly, I think the Journal missed the bigger picture and vastly underestimated cloud adoption among small businesses.
Of course, it’s good to see cloud discussions going mainstream. For VARs and MSPs, that means end-customers will ask you more and more cloud questions — setting the stage for you to offer short- and long-term guidance. But now the downside: Too many mainstream media outlets consider cloud computing purely a dollars-and-cents discussion. And when it comes to battling big cloud providers over price, VARs and MSPs don’t have much to gain.
Instead, channel partners need to broaden the conversation. As does the mainstream media. Yes, the cloud can eliminate some immediate/up-front IT costs. But for the vast majority of small business customers I believe the cloud represents a whole lot more, including:
- Speed to market: How quickly can a VAR order, design and deploy an email or groupware system for a small business? How will the system be backed up and secured? In stark contrast, how quickly can a solution provider activate a cloud-based email service with built-in data protection for customers?
- Scalability: True cloud systems scale on demand. Just ask us. We originally launched our websites on a dedicated server in 2008. By late 2009, we ran out of horsepower and switched to a cloud service. We’ve hit some performance bumps here and there. But we’re no longer throwing more hardware at scalability problems. Our cloud service provider simply pumps up the juice when we need it. On demand.
- Predictability: Small businesses hate big, expensive surprises — such as an unexpected server repair, major software upgrade, etc. Over the long haul, cloud and on-premise systems may have roughly the same costs. But the cloud is like a utility, delivered at a predictable cost every month. On-premise systems, in stark contrast, have fluctuating costs based on major upgrade cycles and repairs.
- Reliability: Yes, we’ve all read about cloud outages — including the recent Skype outage, the Microsoft Hotmail problems, and the Microsoft BPOS outages of late 2010. But overall, I suspect most cloud systems are more reliable than individual PCs and small business servers. We read and hear about cloud outages because they impact major communities of users. We don’t hear much about individual PC and server outages because they happen on isolated islands (i.e., within small businesses).
So congrats to The Wall Street Journal for documenting the cloud’s growing popularity in small business. But too bad the Journal spent so much time focused on cost savings. And shame again on The Journal for depending on an IDC statistic that suggests only 7 percent of small business owners use the cloud. Surely, the figure is far higher if you lump in cloud email services, social media services and all the consumer services that entrepreneurs use within their businesses.
As a small business co-owner and co-founder, I can’t how we would have launched, grown and managed Nine Lives Media Inc. without a range of cloud services (email, Skype, Google Apps, YouTube, webcasting platforms, etc.).
To Be Continued
Does the cloud save us money? Frankly, I’m not sure. But I know it saves us time, improves our reliability, and eliminates the need for us to manage our own IT infrastructure.
Oh, and one parting thought: Can VARs and MSPs really profit from the cloud? We’ll share the answers in the days and weeks ahead — as we begin to profile solutions providers that participate in the Talkin’ Cloud 50 Survey.