To put it in accounting terms, using cloud computing, the spend on technology will no longer be a capital expense, but rather an operational one
By Daniel Marcus – CEO Magnetic Software
The internet has changed all aspects of our lives. From how we bank, get around, or communicate with friends, or even — as I hear — date. From a business perspective, however, it has radically altered the ways in which businesses communicate with consumers. But did you know it has also changed the very ways in which business owners run businesses? There’re a slew of applications — both mobile and on desktops — which can be used to simplify task, account, and HR management, which often prove to be time-consuming.
The facts are simple. In the dark old days before the internet came along, like buying a CD, you had to buy software (usually with a licence), install it, and then only run it on your computer. Once you had your software, it pretty much was yours to use as you saw fit, but more importantly, manage.
Under the cloud model, however, business software is run online by a third-party provider, and you access it through your internet browser. With the cloud, there’s never a need to actually ‘own’ any software.
While, this may seem to be dangerous, it’s actually a positive. Rather than buying a product, thus making it your responsibility to service and manage, you’re renting a service which is your provider’s responsibility to make sure it works.
In terms SMBs can understand
Just like when you rent a car, you rightly expect to be able to jump in and drive off, safe in the knowledge that your car will work. The same is true of cloud services. When you sign up, you get to use the software without worrying about installing it, maintaining it, downloading updates or keeping it secure.
As a business owner myself, I however, find the greatest benefit of the cloud to be financial. In much the same way in renting versus buying a car, there’s no massive upfront cost when signing on with a cloud-based service provider. Of course you pay a monthly fee, but you can scale your use of the product as per your business demands.
This means that when taking on more staff you can switch on new licences immediately. This also means that unlike with physical business software, which your stuck with once you’ve bought it, you can switch licences off if they’re no longer necessary.
An additional saving found in using cloud computing is the fact that you will never have to “upgrade” your software again. A good cloud service provider — who will always want to retain your business — will ensure that their service is always on the cutting edge of the latest innovations. The cost to upgrade the product is theirs, not yours.
To put it in accounting terms, using cloud computing, the spend on technology will no longer be a capital expense, but rather an operational one.
Though there are many positives, as outlined above, one cannot talk about the cloud without addressing the security concerns many have about it. These concerns are valid, but they can be mitigated.
A reliable cloud service provider ensures that it stays up to date with today’s ever-evolving industry standards and regulations. At the very least, look for a provider that uses 512-bit SSL encryption, which is the same kind of encryption used in online banking. If, when you ask a provider about this, they can’t answer, look elsewhere. The cloud provider you’re looking for should be running periodical backups (at the least on a daily basis). This means that should something go wrong, they will be able to recover your information.
A top-level cloud service provider’s servers run in state-of-the-art data centres with power-redundancy, hardware mirroring, and multiple internet connections.
And finally, the best cloud providers never access your data without your clear, explicit permission.
So yes, if you can find the service provider who can answer all your security concerns about the cloud, the benefits far outweigh the risks.
Few — if any — businesses can escape technological advancements. But just as the fax machine made way for email, and email made way for instant messaging services, technological advancements are a key driver of commercial competitiveness. Today, we’ve entered the era of the cloud. Not making use of it means that you’re not only continuing to saddle your business with unnecessary costs, but also failing to grab the competitive advantage the cloud offers your business.