SMBs should just give cloud a go

Cloud computing today is a viable option for small and midsize businesses (SMBs) as the benefits outweigh the risks involved in making the leap into this nascent technology, say industry watchers.

Leasing or utility-based IT has now become a more accessible option for SMBs, said Gopi Ganesalingam, managing director of Lava Protocols, a global reseller of Salesforce.com services.

"The cloud option really means that SMBs will not need to fork out huge sums of money for upfront investment as the solution is now based on a subscription model, rather than a buy-and-pay model," Gopi said.

He added that SMBs only pay a small setup fee to put in place its IT infrastructure and configuration, sign up for a software- or IT-as-a-service offering from a trustworthy vendor and pay a subscription for the service rather than buy IT systems--thereby, freeing up its cash-flow to meet other operational expenditure.

"This is an attractive proposition to SMBs," he said.

Steve Hodgkinson, research director for Ovum, noted that smaller SMBs would no doubt prefer generic public cloud services because they are the most mature, proven and affordable option--as long as there are no real concerns with data being stored offshore.

"Public cloud services have the merits of simplicity, and are able to be provisioned quickly," Hodgkinson said in an e-mail interview.

However, he noted that some SMBs may prefer the added security or quality of service that comes from a hosted private-cloud service, though, this will require more negotiation and setup, as well as cost.

Ed Lenta, general manager for VMware Asean, said there is no one-size-fits-all approach to cloud computing as each organization has to define for itself what cloud computing is, and how best to take advantage of it.

"Although the mix for larger organizations may swing toward larger private clouds, VMware believes large companies will also benefit from seeing what IT resources can better be served from a public cloud," Lenta told ZDNet Asia in an e-mail.

He noted that many small organizations today can already set up private clouds, which offer greater flexibility and control in providing hosted IT services. This, he said, also allows enterprises to extend the lifecycle and increase utilization of their hardware systems.

At the same time, small organizations that see IT-as-a-service as a way for them to control capital expenditure and reduce the need to manage IT internally, will also want to deploy some applications on a pay-per-use basis, or software-as-a-service (SaaS), he added.

Tips for deployment
Regardless whether SMBs choose a private or public cloud, there are considerations that must be taken into account before they do so.

Lenta noted that before committing to any cloud model, SMBs should be very clear about the technology benefits they hope to achieve.

"They should do a thorough assessment of their current infrastructure, budget and the expertise and preparedness of their IT department," he advised. "They should consider if they need business continuity and disaster recovery, as well as the kind of security they need, which may be prohibitive for them to do in a traditional setup."

Hodgkinson added that SMBs must always have a backup plan regardless of whether they choose private or public cloud services.

"What happens if a [cloud] service provider disappears? Any business needs to have its data backed up and to know how they would resume operating after the failure of an IT service," he said.

Gopi added that SMBs must also evaluate the reliability, customer base and market capitalization of a cloud service provider. "Successful cloud providers are the ones that have thousands of installed bases worldwide, a strong balance sheet and a clear roadmap of its products and upgrades," he said.

Hodgkinson added: "SMBs should just give it a go and put the cloud to the test. They should anticipate success but plan for failures by having a back up plan. Also, look to the future by keeping up-to-date with the vendors' planned service enhancements and take advantage of them."

Lenta said: "Start by virtualizing current systems, then keep virtualizing. Also, consider hybrid cloud models, a mix of public and private cloud services and see what works."

One SMB's journey toward cloud
Welch Allyn Malaysia (WAM), a medical gear equipment supplier, deployed Salesforce.com's Sales Cloud in 2008, enabling its staff to access the company's customer database in real-time over the Internet including contact information, sales and lead generations, inventory management and budgeting. WAM has 32 employees, 15 of whom are licensed to use the cloud platform.

A. Chandrasegaran, country manager for WAM, noted that its previous customer database system was not dynamic enough to meet the SMB's needs as it could not produce real-time data or mix-and-match its reports, making it a chore for WAM's sales teams to use.

Since deploying Sales Cloud, Chandrasegaran said, WAM's revenues have increased by up to 30 percent and the sales team's productivity has improved because it is able to follow up on leads more efficiently.

"I can forecast and look at sales trends more accurately and I can even track the performance of my sales team and see how they are faring, and address any weaknesses immediately when needed," he added.

"Best of all, I no longer have to worry about issues such as capital expenditure for my IT needs or IT system upgrades, and pay a little over US$1,000 per licence annually to use the system."

Edwin Yapp is a freelance IT writer based in Malaysia.