How Cloud Computing Can Help Small Businesses

These days one of the hottest topics in technology is the concept of Cloud Computing.

The term “cloud computing” encompasses many areas of tech, including software as a service, a software distribution method pioneered by Salesforce.com about a decade ago. It also includes newer avenues such as hardware as a service, a way to order storage and server capacity on demand from Amazon and others. What all these cloud computing services have in common, though, is that they’re all delivered over the Internet, on demand, from massive data centers.

“Cloud computing makes use of the excess server capacity of specialized providers. Work may be split among many machines, sometimes called virtual servers, that also work on the tasks of other individuals or companies. (Software-as-a-service, often confused with cloud computing, is a subset of it.) Cloud computing can help small businesses ease capacity issues and eliminating the need to invest in your own servers or employ staff to take care of them. Instead, you pay only for the capacity you need at a given time. And as demand rises, capacity increases without interruptions.”

How does Cloud Computing apply to a Small Business?

So what can be outsourced to the cloud? Just about all of your business computing needs. Some businesses and consumers simply use the cloud to host productivity applications, such as e-mail, document creation and sharing, and calendars, relieving them of the time and expense needed to run and maintain the software on their own computers. Some companies use it to host their own applications. But there are also entrepreneurs who use the cloud to sell services that would have been impossible to offer before, and those who capitalize on this model to build virtual companies.

Sounds Great, but there are some Caveats

Using cloud computing, in some sense, means giving up control—perhaps of your intellectual property, customer lists, or proprietary applications, depending on which tasks get outsourced. And vendors’ systems, like your own, can go down and you are essentially up the creek without a paddle.

When you are using a traditional hosting package, you have the servers set up and occupying space, you are paying a fixed amount whether those servers are busy or not but you have complete control of the systems. This can be beneficial and more cost effective if you know your usage is more consistent on a month-to-month basis.

So what Providers are out there for a Small Business?

There are many more companies offering cloud computing services. You can choose from a wide range of providers and pricing, depending on the complexity of your tech needs and the amount of capacity you require. Amazon has something it calls EC2. Google has Google Apps, Google Docs, Google Sites, and Google App Engine. Microsoft offers a service called Azure. But there is a sizable group of smaller players as well. These include such companies as 3tera and 37Signals, one of the best-known small providers specializing in project management applications for entrepreneurs.