Rajesh Rege, Senior VP, Data center and Cloud business, Cisco-India and SAARC

Over the last decade, technology has become a key differentiator and enabler for businesses. Both enterprises and small business have made a paradigm shift in the way they do business by employing new technologies and are able to tap into new markets of opportunity across industry verticals. One among these technologies is cloud computing, an emerging new computing paradigm for delivering computing services.

Cloud computing is the coming together of a number of existing technologies e.g., the Internet, virtualization and grid computing. It involves the hosting of data, applications, communications and services in a data centre, and enables them to be provisioned on any device, anywhere, at any time, as long as there is an Internet connection.

Like enterprises, cloud computing can prove commercially viable for many small and medium enterprises (SMEs) due to its flexibility and pay-as-you-go cost structure. This makes SMEs nimble, quick and agile, and enables them to conduct business faster and better.
Ironically though, not many SMEs understand the benefits that cloud computing can bring to their business especially with regard to cost effectiveness, operational efficiency and scalability. While many do not use cloud computing, there are others who might not understand the term. Many who understand cloud computing do not deem it necessary to adopt the technology.

The reasons behind the hesitation include security concerns, which have been a cause of concern especially for large organizations, cost and reliability issues. While it is true that adoption of cloud computing is growing at an encouraging rate, SMEs need to do a lot more in order to leverage the technology for maximum effect.
Benefits of Cloud for SMEs

Reduced Costs – Cloud computing helps SMEs to reduce costs, both Capex and Opex especially with regards to IT resources, power and energy. Cloud computing significantly brings down the expenditure associated with the purchase and upgrading of physical hardware because the infrastructure is owned, managed and maintained by the service provider. Operational costs associated with managing and maintaining systems (technical staff and software updates), are also taken care of by the service provider. Reduced power/energy in turn implies that organizations can easily meet their green mandates.

Pay-As-You-Go Model – With cloud computing SMEs pay for a software or service only when they use it instead of buying it. They also do not have to invest in expensive datacenters or maintain them internally. The biggest advantage of cloud computing is, that SMEs can access enterprise level technology which their normal IT budgets may not be able to afford. When there is a need for business ramp up, SMEs just need to turn up the bandwidth, users and processing power as required.
Remote Access and Business Expansion – With cloud computing, employees can access information wherever they are, instead of having to remain in one physical location. This immensely benefits remote/mobile workers. A growing SME organization can add new users on demand, from any location, thereby further reducing the time required to expand operations. The cost of expansion can also be mitigated, because expensive hardware is no longer required for new employees. Power usage, cooling requirements and the costs of internally housed servers also decreases. The best part is that all data and applications are secure in the cloud, easily accessible and always available.

Easy to Implement – Implementing cloud services is easy; the time taken for the process is also less unlike a hardware implementation which can take several hours. The other key benefit is the ability to easily bring different applications together. Cloud services that incorporate open internet standards-based APIs (application programming interfaces), accessible through web services, help diverse systems communicate together easily. In the long run, this helps SMEs develop new applications and bring down the effort associated with integrating cloud computing applications with existing technology.

High availability – Cloud-based services that most service providers offer are backed by SLAs, and have stringent access controls for both physical and remote access to the data centre. In case a line goes down or a power outage occurs, the data centre will have a power and connectivity failover to ensure redundancy and continued uptime. If cloud service providers also ensure that multiple instances of an SME’s information are stored in disparate locations it will provide complete data compliance and peace of mind to the SMEs.

Even playing field for SMEs – Cloud computing allows SMEs to compete more effectively with some of the larger businesses and effectively balances the playing field. With the local hosted and managed services market becoming more mature, the cost per user becomes very competitive; this makes it a comprehensive value proposition for SMEs.

In essence therefore, there is little doubt that cloud computing offers tremendous benefits for SMEs. By putting the power and potential offered by technology in the hands of smaller organizations, cloud computing helps them survive and prosper in an increasingly competitive, dynamic marketplace. The need of the hour is for these organizations to realize the potential of the technology and make the most of the benefits that it offers.