SMBs can reduce IT costs by embracing the cloud

Tuesday 11 December 2012

For small and medium-sized businesses (SMBs) operating on tight budgets, IT presents something of a challenge - how can they keep up with the rapid pace of innovation with limited finance or in-house expertise? But more so, IT offers significant opportunities. Used in the right way it can deliver real cost savings for small companies, while increasing productivity and creating new ways to engage with consumers and boost trade.

The advent of cloud computing has made a major difference to SMBs. With companies of all sizes able to take advantage of hosted services - removing the need for significant capital expenditure - small companies are actually on a more level playing field than ever before. Rather than spend time and money they do not have wrestling with IT, they can outsource many of the day-to-day technology functions to a specialist provider.

Cloud computing vendors have far greater resources than individual SMBs, and also much greater expertise. As such, by using hosted services, small companies can access online solutions which would be far out of their price range should they wish to buy them outright. They can also access the professional skills needed to obtain value from IT investments, without the need to add to their headcount. By switching to an investment model based on operational expenditure, SMBs are suddenly able to view IT as a key asset rather than a necessary evil.

SMBs must be willing to embrace IT

SMBs are well aware of the need to invest in IT, in one way or another. The revolutionary nature of the internet and ecommerce means few small companies will be able to thrive in the years to come without some form of online presence. Increasingly, consumers are looking to research and make purchases using the internet, rather than through traditional retail channels. Factor in the reduced overheads associated with ecommerce and there is a compelling commercial case for investment in technology. Companies can either keep up with innovation and current market trends or risk being gobbled up by the competition.

Of course, IT also has the potential to deliver significant productivity gains in-house. Access to advanced online solutions through the cloud can enable SMBs to automate more menial tasks, freeing up employees to focus on areas which add value to the bottom line. IT can offer benefits in every area of the business - finance, marketing, administration, HR, product development and sales included - businesses simply need to have access to the tools needed to do the job. And the use of hosted services means they can source the technology solutions they need, as and when they need them, without breaking the bank.

Cloud computing helps reduce business costs

SMBs can benefit in a number of ways from using cloud computing - the delivery model adds flexibility and agility, supports business continuity, caters for easy upgrades and ensures systems are managed and maintained by skilled professionals. But ultimately, it is the potential of the model to reduce costs which is persuading the majority of firms to move to the cloud. A KPMG study revealed that more than three-quarters of adopters cited 'economic factors' as an important driver, with a similar number saying financial savings would be needed for them to use hosted services.

The strong commercial case for investing in the cloud is being reflected in adoption levels, both in the UK and around the world. As the maturity of the service delivery model has increased, SMBs have looked beyond initial concerns over security, data ownership and control to take advantage of hosted services. Research conducted by IDG UK found that 42 per cent of all current SMB cloud users signed up in the last 12 months - highlighting the fact that this is very much a growing market. Just 23 per cent of SMBs have been using cloud computing since before 2009, showing how adoption levels have risen in the last three years. 

Meanwhile, a Microsoft study found that 29 per cent of SMBs were paying for at least one hosted service, a figure which is expected to reach 39 per cent by 2014. The SMB cloud market is growing at a rapid rate, and as more firms take advantage of such solutions, others will be encouraged to as well - eager to prevent their rivals from stealing a march.

Embracing cloud computing

With many SMBs short on financial resources and also technical expertise, simplicity of service delivery is often key. Such companies need solutions which they can understand and use effectively, and are ideally designed with small businesses in mind. While technical support is available through the cloud provider, both during the implementation and operational stages, SMBs can gain more value from hosted services if they fully understand their features and capabilities.

Microsoft Office 365 is ideally suited to small businesses looking to achieve greater value from their IT. The solution brings together online versions of communications and collaboration tools, helping business leaders and their employees work more productively. The service - available online in the cloud - allows users to access emails, documents, contacts and calendars from virtually anywhere on almost any device. This means people can work more flexibly, in a way which suits them best - ensuring they are able to optimise performance levels.

Businesses also retain the ability to scale usage - and crucially cost - according to demand, paying only for services they need and are actually using. This helps SMBs make the most of their limited IT budgets, ensuring they are able to add maximum value from technology with as little expense as possible.

Posted by Alex Boardman