Cloud computing offers more benefits to companies of all sizes, especially to smaller and newer companies, than the standard objections raised for cloud computing, compared to Infrastucture IT Services. And the cloud’s economies of scale naturally make a bigger difference to savings and capabilities on its own for the conpanies.
Economies of scale.
It’s cheaper for bigger cloud computing folks to make efficiency improvements because they can spread the costs over a larger server base and can afford to have more dedicated folks focused on efficiency improvements. Small companies, have more limited resources. Anything that can give them access to scale in purchasing and pricing can be considered advantage.
There’s also a substantial advantage to having “in house” expertise devoted to efficiency, instead of having staff split between different jobs. Technology changes so rapidly that it’s hard for people not devoted to efficiency to keep up as well as those that are.
Diversity and aggregation.
More diverse users in different places means computing loads are spread over the day, allowing for increased equipment utilization. Typical in house data centers have server utilizations of 5-15 percent and sometimes much less, whereas cloud facilities for major vendors are more in the 30-40 percent range.
Cloud installations use virtualization and other techniques to separate the software from the characteristics of physical servers. This sounds like a great thing for software and total costs.
In essence, this technique redefines the concept of reliability from one that is based on the reliability of a particular piece of hardware to one that is based on the reliability of the delivery of the IT services of interest, and this is a much more sensible approach.
Big companies have the heft to create the custom functionality they need. Small companies simply don’t have the resources to do that. In the cloud, though, they can leverage development, maintenance and upgrades across many, many small businesses. And, increasingly, consumers as well.
Startups and small companies are often undercapitalized and pay-as-you-go cloud computing solutions typically don’t require lots of upfront cash. Even if they don’t end up saving much as the monthly fees add up over the long run, avoiding capital expenditures can be a make-or-break issue for cash-strapped small businesses.
Infrastructure vs. Applications.
For the enterprise, cloud computing often means complex Infrastructure as a Service (IaaS) projects that have to be installed and integrated into a company’s existing systems. Cloud computing often means complete cloud-based Software as a Service (SaaS) applications and application suites.
The Legacy Issue.
A common enterprise objection to cloud computing is how will it work with the company’s legacy applications. Small businesses – and especially new businesses – typically have fewer and less complex legacy apps. Taken a step farther, that means startups and small businesses have less installed infrastructure they’d need to throw out to move into the cloud. As for new businesses, why would you actually buy anything you could “rent” instead?
The cloud is more reliable than most people think. When widely used cloud services and applications have outages, it makes national news. When an individual company – large or small – has a similar problem, they work hard to make sure you never even hear about it. The bottom line, though, is that even accounting for network connectivity hiccups, the cloud is probably a lot more reliable than what small businesses can afford to provide for themselves.
When it comes right down to it, cloud computing seems made for startups and small businesses. It’s the best way to get enterprise class – or better yet, consumer class – functionality without having to develop it yourself or lay out a big chunk of cash to buy it. And even though cloud computing still isn’t fully mature, its remaining issues simply carry less weight when viewed from the perspective of a startup or small business.