How small, mid-sized firms are finding success in the cloud

Why cloud computing?

Information-technology leaders these days are caught in the technology vortex of determining future plans for enhancing their IT infrastructure. Pressured from management to do more with less, IT leaders are looking for simple, quick and cost-effective alternatives to take them and their companies to a new level of performance. Torn between improving financial performance and operational efficiencies, IT leaders are turning to cloud computing to offer an acceptable solution.

Cloud computing in 2013 is becoming more of an acceptable solution to IT leaders as they face more challenges to upgrade and protect their current IT infrastructure. Successful IT leaders are looking to reduce their current cost of computing, limit the need for additional technical skills, and finally, develop a new IT platform that is scalable, secure and cost effective.

Gartner estimates that global cloud computing will grow from $40.7 billion in 2011 to $241 billion in 2020. Gartner further projects that the annual growth rate for cloud computing services will slow to 15.8 percent in 2016. SunGard also mirrors this growth phenomenon and sees CRM leading the way. Forrester also sees a significant increase in cloud services as more and more IT directors of small companies look to cloud computing.

Small and medium-sized businesses, those with relatively small investments tied to legacy systems, have been the quickest to take up the services offered by cloud providers. The cloud provides them with applications, capacity, scalability, and agility that they otherwise would not be able to afford — allowing them to focus on their real business and not IT. Computing resources are looked upon as a utility service with the ability to turn up or turn down utilization on demand through the advent of virtualization which is the key enabler of the cloud. This allows the small to mid-sized company to have the same resources available to them as the largest global enterprises and be able to compete on the technology front.

IT leaders from small to medium-size companies, who have enthusiastically embraced cloud computing, chorus that the utilization of cloud computing has demonstrated a number of worthwhile benefits, ranging from financial savings, flexibility, scalability, security and performance.

IT leaders are jumping on the cloud computing bandwagon in droves. Let’s take a look at what these companies have been experiencing and why they chose to move critical business applications to the cloud.

Financial: Reports from CIOs and directors on the benefits of cloud computing have a common thread: We can outsource our IT infrastructure cheaper that we can build and operate in-house. This has been a “sticky wicket.” Naysayers have claimed this to be impossible. But let’s take a look how this could occur. Successful CIOs have concluded that they save money on software licensing, technical staff additions (including training) and the avoidance of costly capital upgrades. SunGard believes the average savings of moving computing to the cloud is approximately 23 percent. That includes people, hardware, software, telecomm and power. Hard to argue with these kinds of facts, don’t you think?

Security: Reducing risk is an area CIOs have been investigating for some time. Some have had minimal success in this effort. But the real benefit in moving selected applications to the cloud is the enhanced security levels. Various providers of cloud computing services have a proven solution with multiple layers of security. This level of security and availability far exceeds what can realistically be provided in-house.

Flexibility: Most cloud providers can ramp up or scale down within a few minutes to a few hours. Comparable time frames with in-house computing that sometimes takes weeks or months to complete.

Timeliness: It’s is quicker for a reputable cloud provider to provide cloud computing capabilities than it is in-house. Cloud providers have already provided transition services previously to a number of companies and they have completed these transitions flawlessly and refined the processes over time. Whereas it may take months for an in-house solution, most likely the transition can be successfully executed by a proven provider in a matter of days.

Proven: Most cloud providers, e.g. Amazon, SunGard, IBM, AT&T, etc., already have a proven track record, complete with best practices, governance and documentation.

Energy consumption: Power and cooling costs have skyrocketed by 800 percent since 1996, according to IBM. It may be important to your company to enhance your sustainability and become a “greener” enterprise. The average business-class server costs $2,500 annually in power consumption.

Other benefits:

Risk: Cloud computing reduces the risk to the company by providing high availability services, disaster recovery and business-continuity services.

Multiple office locations: Cloud computing is a superior alternative than in-house solutions for companies with multiple geographic locations for the small to medium sized enterprise.

In the final analysis, cloud computing is not just about data center technology. It’s about streamlining business processes to make organizations and people more strategic, more responsive to change and more oriented to service delivery.

Tim Averill is the chief executive officer and founder of Averill Consulting Group Inc., an IT services company headquartered in Sparks. He is also the CEO and founder of SkyBox Cloud LLC. Contact him at Tim.Averill@AverillConsulting.com.