5 Reasons Why SMEs (Small-to-Medium Enterprises) Should Migrate To Cloud-based Services

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5 Reasons Why SMEs (Small-to-Medium Enterprises) Should Migrate To Cloud-based Services

5 Reasons Why SMEs (Small-to-Medium Enterprises) Should Migrate To Cloud-based Services

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According to Parallels SMB (Small and Medium Businesses) Cloud Insights for Global Markets 2016™, the market for Cloud services is expected to grow to $125 billion by 2016. 67% of the share will be of business applications and Infrastructure-as-a-service (IaaS) providers.

Intended Audience for this post:

  • If you are a Startup, this post can help you understand and leverage the core benefits of cloud services.
  • If you are an existing SME, and wondering how cloud services could be of use to you, read on.
  • If you are a large company, and wondering how you can introduce cloud into your organisation, you may find this post useful to help you seed the use of cloud into your operations.

There is a growing interest amongst Businesses, big and small, for cloud-based services. Netflix, a global provider of streaming movies and TV series e.g. switched to a cloud environment when it began to outgrow its data centre capabilities. The move allowed the company to provide efficient services to its growing customer-base that further enabled its growth and expansion.

Related : For SMEs Cloud Based Services is the default way forward

For SMEs, cloud offers a smarter and leaner technology option that limits cost and multiplies productivity. Here are 5 ways in which cloud-based services can guarantee quick growth and success to an SME.

1. Get Visibility on Resource Utilisation and Manage Costs

From Upfront Provisioning to On-demand Provisioning

By subscribing to Software-as-Service (Saas) for routine functions, an SME can efficiently manage business operations like accounting, billing, inventory, and other back-end work at a much lower cost. The SME can start small, pay less to start with, and scale up only when necessary.

From Upfront payments – Capex (Capital Expenditure) to Pay per use – Opex (Operational Expenditure)

By adopting cloud-based services and paying monthly for the services, an SME can either reduce the size of their data centre or completely eliminate on-premise servers. This can significantly lower the cost and complexity of owning and operating, networks and servers. Cloud computing promises rapid return on investment without the need to purchase any hardware or software licenses. Also eliminating the cost of IT resources required to manage on-premise infrastructure.

Upfront investments in hardware and software licenses, typically has to ensure headroom for growth in capacity requirements, which then introduces over capacity in the system at the start itself. It’s been observed that such setups have poor utilisation of the available capacity contributing to waste in the system.

Related : Getting on the Right Side of the Capex vs Opex Divide

This “capacity guess game” is replaced with a predictable “pay only for what you use” model, when working with the cloud. The resource utilisation can be reviewed daily and adjustments can be done to optimise the Opex on an ongoing basis.

2. Scale or Burst only on demand as your business grows

From Fixed hardware sizing to Stretchable resources | Elastic compute | Elastic Storage | Elastic bandwidth | Infinite computing

Imagine the cloud to be a place of unlimited compute and storage capacity, and design your business with that in mind. Design your systems to start small and build on the automatic scalability provided by the cloud environment. This allows you to experiment at a very low cost and retire resources you no longer have a need for.

A well designed cloud delivery platform will also allow you to automatically scale up during peak loads and scale down once the peak subsides. This on demand temporary provisioning has a big impact on performance without needing to provision upfront for headroom and also has an impact on costs since you pay only for the peak period for the extra resources.

3. Always the latest software

From scheduling Downtimes for Upgrades to Automatic Software updates

Almost all Cloud services without exception are subscription services. In the best interest of the manufacturer and the consumer, the service provider ensures that the service is always running the latest software release and has all the security parameters in place. Typically such upgrades are done continuously, transparently and don’t have much of an impact on the end points, barring a very small maintenance window.

Our own experience with our customers suggests that in premise customers are typically at least 6 months to 1 year behind each release as compared to SaaS customers.

4. Out of the box Security and Reliability

From designing and spending on Security systems to Consuming secure services

Contrary to the popular belief, cloud-based services come with better security mechanisms. For a start, if you don’t have any servers or equipment in premise, there is no risk involved with loss of storage, tapes, or other forms of data theft and therefore no cost associated with ensuring the physical security of these equipments.

Since most cloud services are multi tenant, it is in the service provider’s best interest to deploy a strong security framework to secure their resources and applications, which then translates into a direct benefit to the consumer, who gets to use an app secured with best practices.

From Planning for reliability to Out of the box business continuity

Cloud service providers give guarantees on availability, performance and data consistency delivering better business continuity without large upfront investments and resource planning to get this done.

This underlying reliability sets you free to innovate on your value offering, without needing to worry about the reliability and performance of the base delivery platform for your App.

5. Connecting distributed teams

SMEs are typically agile and flexible businesses and their teams may comprise of internal employees, contract workers, and outsourced partners.

Consuming services from the Cloud enables people mobility, to work together from anywhere and at any time, without having to worry about putting in elaborate security mechanisms to provide and control access to internal in-premise resources.

In conclusion

Cloud-based services can enable SMEs to manage their IT requirements more efficiently and cost-effectively. The availability of ready to use secure building blocks frees up precious resource for core business functions.

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