7 min read

The cloud and small business.  Generally speaking, it’s a match made in heaven.

But as more and more small business technology dollars have moved toward the cloud (or considered moving toward the cloud), more and more information has been produced about this major transformation in business practices.

And that has produced an environment that can be confusing.

In this article, we’ll look at some of the more frequent claims and decide whether they’re fact or fiction.

 

The Cloud and Small Business: Facts and Fictions

1. The ‘cloud’ is just a marketing buzzword and a short-term fad.

Fiction.

It is undoubtedly true that the term ‘cloud’ is a marketing term that encompasses several distinct parts and that the term ‘cloud’ gets used casually and imprecisely.

Further, sometimes the time frames that people ascribe to changes driven by the cloud are shorter than what actually occurs in reality.

Even conceding the above points, we’re still forced to acknowledge that the move to the cloud is a fundamental transformation affecting how business is conducted in both Fortune 50 companies and small businesses.

There are a few big facts we can look at to dispel the notion that the cloud is a short-term fad.

The first is the level of capital commitment the largest and most shrewd technology companies in the world are continuing to make toward the cloud today.  Microsoft, Amazon, Google and Oracle are investing billions of dollars in building massive data centers around the world to house cloud computing servers.

These types of infrastructure build-outs (and corporate strategy changes) don’t get made on whims.  Cloud computing is a long-term shift in how business data is stored and accessed.

Gartner predicts the worldwide public cloud services market will grow 18% in 2017 to $246.8B, up from $209.2B in 2016.

Secondly, cloud computing is not really new.  Some of the earliest cloud-focused technology companies started in the 1990s–before the dot com bust.  These large cloud companies are not new upstarts–they’re large, seasoned corporations whose business models Wall Street is beginning to understand and value significantly.

Third, cloud computing has already immersed itself in the fabric of everyday life.  It has won the battle over what people expect from technology products.

As consumers, when we use Gmail for communication or search for the best deal on a travel site or get driving directions from a mapping app, we’re using the cloud.  We’re using those services because they provide the best, most up-to-date information in the most accessible way possible.

It’s what we expect in our everyday lives and it’s what workers and customers increasingly expect from their business software.

 

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2. The cloud is not secure enough for our business data.

Fiction (almost always).

For almost all small businesses (and even medium and large businesses) today, this is fiction.  When working with established, reputable cloud vendors, the resources protecting your business’ data will exceed what you’re able to provide on-premise.

This is because for cloud providers, their core business focus is on offering outsourced cloud services.  Protecting your data is one of the key areas of their business.

So their data centers have both physical and technical safeguards (including encryption options) and are independently audited for rigorous standards such as AICPA Service Organization Control (SOC) 2 reports, which provide assurances about security, availability, processing integrity and  confidentiality and privacy.  Data back-up success and availability and integrity can be remotely monitored.

Contrast this to the resources of most small businesses and the risk to data involved.  Oftentimes, data back-up is a manual process that depends on employees remembering to back up drives on physical, external media.

If this is forgotten, data is not backed-up. And there is no regular testing or reporting to ensure that back-ups are successful and un-corrupted.

Further, this data back-up is usually done on-site at a business which does not have the same level of physical security as a professional data center and is subject to the ‘disasters’ that can affect office buildings: theft, small fires, flooding and power surges.

The one exception that remains for this is that some regulated industries still have compliance standards that cloud providers don’t meet–but this is quickly becoming a rare exception.

In fact, even back in 2013, Microsoft noted that

“94% of SMBs have experienced security benefits in the cloud that they didn’t previously have with their former on-premise technology approach, such as keeping systems up-to-date, spam email management and up-to-date antivirus.”

3. The cloud is not reliable enough.

Fiction.

All of the security issues that affect reliability at small businesses noted above in #2 affect reliability as well.  Established cloud providers also know that this is a key concern of businesses and will often offer up-time guarantees over 99%.

In fact, the opposite is generally true.  In the same study cited above, Microsoft found that 75% of SMBs reported increased data accessibility and reliability.

4. The cloud means we lose control of our data.

Fact and Fiction.

Yes, it’s true that your data will not be residing within the walls of your business in your on-premise server anymore.

But that’s not quite the same thing as losing control of it.

First, reputable cloud companies have privacy policies which limit the access of their employees to your data.  These cloud companies understand the concern here from their clients and are highly motivated to make sure these policies are followed.

Also, although it can be time-intensive and perhaps pricey, cloud companies will allow you to extract your data and move to other providers.

Finally, the amount of control you have over your data in the cloud is relative to the amount of control you have of it on-premise.

Most small businesses do not have stringent identity-defined access management controls over their on-premise network that are actively managed and monitored and are therefore susceptible to employees and others looking at and accessing data they shouldn’t.

This type of access is more easily limited and controlled in the cloud.

SaaS

5. The cloud is about software.

Fact–but not the whole story.

The most common use of the cloud today by SMBs is cloud software, known as SaaS (Software-as-a-Service).  SaaS includes all of the traditional categories of business software–CRM, accounting, HR, productivity, etc…

But the cloud also offers capabilities in replacing on-site hardware (Platform-as-a-Service/PaaS and Infrastructure-as-a-Service/IaaS).  The cloud is also offering to take over (or assist) in things like storage and communication.

In other words, the cloud is not just SaaS.

6. The cloud is less expensive.

Fact.

For most small businesses, the cloud makes huge financial sense.

Upfront costs for multi-year software licenses are eliminated in favor or monthly subscriptions. (Some investments can be therefore be expensed as ongoing operating costs rather than capital expenditures that require depreciating).

These software subscriptions can also be easily added or removed on a month-to-month basis.  And businesses automatically have access to the latest versions of the software.

Businesses are also able to avoid investing in and maintaining on-premise hardware like email servers, AD servers and storage servers.

The cloud provides the ability for more powerful (with less hardware), more flexible and more scalable solutions for small businesses.

The concern that you’ll hear about the cloud and costs is that over time subscription costs add up.  This is true–prudent planning should be used to buy only the services needed.

But this has always been true with IT investments and good management.  And when you look at the deliverables from the cloud in terms of security, added features and updates, remote accessibility, flexibility and the ability to avoid investing nearly as much in on-site support and on-site hardware infrastructure, the cost-benefit analysis for the cloud is an easy one.

7. Moving to the cloud is a massive undertaking.

Fiction (mostly).

The truth is, this depends on what your business is moving and when it is moving it.

First, most small businesses can start using the cloud in a piecemeal fashion.  Not all software will go to the cloud.

And even that software that is moved to the cloud isn’t all moved at once. For instance, as old on-site licenses of software expire, those users (along with new employees) can start using the cloud version of the software.

And when most small and medium businesses migrate infrastructure to the cloud–like data storage servers or email or AD servers–this can be handled routinely by local technology companies.  It may require a few weeks of planning and a couple of weekends of work, but it is not an unpredictable process today.  It’s largely routine and can be done safely.

8. Cloud software is not business-grade.

Fiction.

From government agencies to Fortune 50 companies, large organizations increasingly run mission-critical workloads in the cloud.

Furthermore, while in the past early cloud software offerings may have been less feature-rich than on-premise editions, this situation is rapidly reversing.  Software developers know that their future is in the cloud and they are devoting the development and update resources to the cloud-accessible versions of their software.

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9. Cloud can’t handle compliant industries.

Increasingly fiction.

It is true that if you’re doing business in a heavily regulated industry–such as defense contracting–there will be more cloud providers that you can not use that most businesses (these cloud providers will no be FedRamp compliant and therefore won’t allow you to meet DFARS specifications).

But examples like this are increasingly rare because the cloud providers are highly motivated to win the business of these regulated industries.

In fact, Microsoft, Amazon and Google already offer compliant cloud solutions for defense contractors (along with a number of other cloud providers).  Indeed, Amazon recently won a large contract to offer cloud computing to the NSA, obviously one of the most privacy-focused and stringent organizations on earth.

For more common regulatory regimes like HIPAA or SOX, there are numerous compliant cloud options to choose from today.

10. Customer Support Is Lacking.

Fact and Fiction.

This is vendor-dependent.  But the best cloud providers know that this is a concern and provide at least the option to access great support.

And, in the real world, this support is competing against the support and issue response-times that small businesses access currently for on-premise issues, which isn’t always fast and reliable.