One of the biggest headaches for any new business is the potentially huge cost of starting up. Today more than ever investment is needed, but with the banks looking to build up their reserves and blatantly ignoring government instructions to lend, finding investment is tougher than ever. With new businesses continually looking to reduce initial costs and ongoing outlay, cloud computing is proving to be a popular and prudent strategy.
Amongst the many considerations for any start-up business, investment in infrastructure is probably one of the biggest issues. Although office premises are not so necessary in these mobile working times, to have a chance of success it is increasingly essential to have the best communications and IT systems in place to maximise every opportunity.
Historically, a new business owner would invest many thousands of pounds in servers, networks and applications to enable the business to function, but not only is this a huge outgoing when money is at its tightest but there are associated ongoing costs such as management and maintenance to consider.
The future for all SMEs
Cloud computing can sound like a very amorphous concept, perhaps even conjuring up images of important business data floating around in the skies above us. It often raises questions about control and security, but the reality is a lot more down to earth. It involves state-of-the-art security, is the future of computing and enables businesses to grow and win new clients whilst saving money.
Cloud computing is a simple principle. End users have a device, which is typically a PC in the office and a smartphone or laptop when they are mobile. Instead of connecting to software and hardware installed on the user's business premises, software and applications hosted in a secure environment (the Cloud) are consumed over the internet on an on-demand basis. There is no need to own depreciating infrastructure or software or to enter in to maintenance contracts. Cloud computing allows businesses to ‘consume' pooled resources of software and hardware and pay for it per month, per user.
The analogy I use is that of nineteenth century electrical power generation, which was done on site by individual businesses keen to embrace the new technology. Today, businesses do not have to invest in infrastructure and specialist personnel to manage it as electricity is purchased from a power company and they pay only for the energy consumed, which is distributed via a network. With cloud computing, a non-IT company buys in IT services from an IT specialist, leaving the IT to the experts and allowing it to focus on its core business. It also does away with the need for capital investment, security and back-up issues, expensive upgrades and costly maintenance contracts.
Cloud's many benefits
For SMEs, the cloud computing model offers many benefits. Anyone who has wrestled with starting or running a small business will know how much the initial IT set up can cost. Not only is there the initial outlay, but there are also ongoing costs as viruses, support, storage and other issues raise their heads. Even a modest email and document server setup, or upgrade, can cost over £5,000 today and it still leaves them with the problem of ongoing support and system management. By adopting the cloud computing model, IT becomes an operating expenditure cost and will deliver most IT requirements underwritten with a 99.9% uptime guarantee.
To conclude, to overcome issues that many new business will have, new practices will have to be adopted and new businesses owners will have to optimise their overheads, invest in the future and embrace technology to improve business processes, increase productivity and enable management to focus on the core business, instead of infrastructure. Historically, using the best applications and state of the art technology has been an advantage only for the large corporations who could afford such six figure investments.
These technologies are now available and wholly affordable to SMEs using the operating cost model that cloud computing companies employ. Cloud computing can supply significant business benefits, and for the first time in recent history, SMEs can access and use the latest cutting edge technology to empower their businesses and level the playing field. The current issues for new businesses to overcome today is that of investment and cash flow and the cloud computing approach offers a highly attractive way forward to all SMEs, allowing them to move forward and expand in a way that suits their businesses and not their hardware supplier.
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