What is the Cloud? Why Should Small Businesses Care?

Getting Started

There is still some confusion behind the term "Cloud." Words such as iCloud and cloud storage are prevalent in the technology space, and people assume they know the cloud. The truth is that cloud technology and its benefits are still widely unknown and misunderstood. Many people are still unaware of how much cloud computing is helping small businesses increase efficiency and save money.

This article reviews cloud technology and covers a wide range of educational topics surrounding the cloud. It also covers the basics of the cloud, explains why the cloud makes perfect sense for small to medium-sized businesses and how the cloud minimizes the disruptions caused by the COVID pandemic.

Cloud Technology

Cloud technology is a widely used term with many different iterations, and we think it'd be helpful to bring a little clarity for small businesses out there. Small businesses have some opportunities to understand how to leverage cloud technology for efficiencies and their operation, so we'd like to help people understand the cloud and what it is.

As an expert, sometimes, when we speak to people, we can tell they don't fully understand the cloud. The cloud is a very broad concept, and we think it's important to clarify what the cloud is, especially for a business owner. The cloud is an abstract concept.

First, the main characteristic that defines the cloud is the ability to access your information from anywhere. Wherever you are on the globe, you should have the ability to gain access to your information relatively quickly without worrying about infrastructure, hardware, or technical issues.

The second thing that defines the cloud is the ability for it to scale with you. If you're a company considering the cloud and have a growing number of employees, your data usage could be going up and down. Generally, you only pay for what you use and don't have to worry about the technical aspects of purchasing or maintaining hardware.

We think the most common cloud that people are used to is probably iCloud. Usually, everyone has heard of iCloud. Because the idea of iCloud is primarily what the cloud is. Suppose you have information and photos on your phone. The cloud or iCloud allows you to detach entirely from the phone. If you lose your phone or get another phone, you'll still have access to your data.

That's the beauty of it. It's the accessibility of information. Often, the cloud is also associated with a service. You have a service that generally you're paying for that enables those benefits. Usually, it's a service that you pay for that allows you fast accessibility to your
information.

Why do clouds make sense for small businesses? Why are so many companies moving into the cloud right now?

We discussed personal clouds such as iCloud, and even in the business world, there are many different cloud services. First of all, we think what will help is if we understand how a traditional company works. Traditional companies and small businesses with a few employees, such as a law firm or an accounting firm, generally would bring everyone to the office. Everyone has their workstations. Everybody's accessing files from an on-premise server that the business owner purchases and then dedicates a room for the server, allowing all employees access that server's information.

The benefits of the cloud

  • You don't have to deal with the hardware: Hardware can be a liability. You need a space for it; you need to purchase it; you need to upgrade it; it will break because electronics, all electronics typically will fail over time. You also have to do upgrades every few years, meaning you have to re-budget, and all of that can be not very easy. The cloud relieves all of that from a business owner's perspective.
  • The other benefit is also the cost: When you go the traditional route and buy stuff for yourself and make it work, it's called an item of capital expenditure. You have to spend a lot of money, sometimes thousands of dollars upfront. Then when it comes time for the upgrades, migrations, and whatever else, you have to spend another five thousand dollars, for example, to do that upgrade. On the other hand, the cloud is designed to be a more predictable expense that you pay for throughout the life of your business.
  • The cloud allows you to pay for only what you use: That means if you're a startup, why buy a server if you're unsure where the company is heading or if you're unsure how fast you're going to grow. With the cloud, you could quickly scale and pay very little and benefit from small fees until you find out what's happening with your business. Then, as you grow, you can spend more to add more data as you add more users. Kind of like electricity, if you use more electricity, you pay more at the end of the month.

There are many more benefits that we can discuss, such as disaster recovery and backup and improved collaboration, that we can have a separate webinar on those benefits alone. We'll say one of the most significant benefits is the scalability and the lower cost of entry than a more traditional technology solution.

What's the process of switching to the cloud?

Often, we are asked the question of what's the process of switching? We understand that small businesses are facing many challenges right now because of the COVID pandemic. Also, companies often have lots of data, and it seems like switching to the cloud right now might not be the best time because a lot is going on. If someone is considering going to the cloud, it needs to be studied just like you would if you were shopping for a house. Fortunately, it's not as large of an investment as purchasing an in-house, and it's a lot smoother, but just like anything else, you want to make the correct decision for your business.

Usually, the transition starts by identifying what cloud is essential to you because "of course," there are competing clouds. For example, Microsoft 365 is a cloud. Microsoft is booming because the cloud is booming because there's so much demand, providing so many benefits. You also have to look at competitors such as Google Workplace. You have to evaluate and think about how your company works and realize what's important to you and your employees. Once you identify all of that, you figure out how to get there.

To answer the question about the process, it depends on the complexities of your business. A lot of traditional firms like law firms and accounting firms have a lot of files. If there's no one on staff with the technical savviness to migrate everything to the cloud, you could hire someone to do it for you—kind of like hiring someone to fix your kitchen sink. You may be able to do it yourself or learn how to do it, but because your time is so valuable to be doing other things, you might want to hire a company to evaluate what you have and migrate everything for you.

Is it a concern for small businesses that their data will be in the cloud and not on-site?

Once your data has been migrated, and it's no longer on-site anymore, and there are no more on-premise servers in the office, you've then eliminated a lot of bulky hardware. However, there is sometimes a concern of people not having their data on-site. Like once the information leaves, people often wonder if they lose access to their data; What if they want to get their data back; Like what happens to the data. These were legitimate concerns when both the cloud and the internet started becoming common.

Many companies can already move to the cloud, but many are hesitant because they aren't sure what to expect. The idea of relinquishing control of your data can be such a scary thing, mainly because the concept of the cloud is such a mystery. It's human nature to steer away from something unfamiliar.

We would say it should not be a concern, mainly because we have reached such maturity in cloud solutions and cloud services. Every company needs to do its due diligence because there are so many cloud vendors that you have to make sure they are reputable and know what they're doing. Microsoft and Google are both reputable companies, and often you may come across some other not-so-known cloud vendors. You definitely would need to research, and once you build that trust, go ahead and take the leap.

Is the cloud expensive?

We understand small businesses are running leaner than ever right now. When should a company invest in the cloud? Here's the truth; Yes, you're getting all those benefits of the cloud, but there is a cost. The answer is it depends on your business. If you believe in the benefits below, then switching to the cloud would be very compelling.

More benefits of the cloud

  • Not worrying about on-premises hardware and maintenance.
  • Not worrying how all that is going to save you money and time. 
  • Not having to troubleshoot hardware.
  • Just wanting things to run smoothly. 
  • Expecting a smooth operation because you're growing and focused on what you do.

Is the performance of the cloud better or worse than a traditional setup?

We talked a bit about performance; it's fair to discuss how the cloud compares with having infrastructures like on-premises servers inside your office, especially in download and upload speeds. We are often asked if there is any difference between the cloud and a traditional setup.

The answer would be yes, but the difference is minimal. Yes, the data is now further away, especially in a traditional setup for a firm. However, the difference is so minimal that you don't even realize it because internet speeds today are super-fast; you won't even tell the difference.

What is the new IT role if a small company adopts the cloud?

What if a company already has in-house servers, some IT staff, and some outsourced IT team that comes in now and then and want to switch over to the cloud? What happens to their IT resources that they currently have?

This is an extensive discussion in the industry about the role of a CIO (Chief Information Officer) or the CTO (Chief Technology Officer), especially in big companies. The role of these individuals used to be to bring in hardware, set up infrastructure, set up networks, and make sure all those networks are communicating.

Business foundations and the dynamics surrounding their information are changing, and these roles have to change along with them. IT companies now have become more reliant on the cloud, so they should understand the cloud better… they should understand the cloud, its benefits and understand the local setups and on-premises computers and endpoints.

There's a role to play for the IT companies, but it will be more blended in with the cloud so that businesses could realize some cost savings. There are things that the cloud is doing that the IT people used to do: infrastructure and setting up servers. Nowadays, servers are essentially hidden in the cloud. The IT guys don't have to update it, and you don't necessarily need to have somebody on site. It would be best to have their support still, but much of it has been offloaded to the cloud. The cloud is just doing its magic which is making your data available to you and your employees.

What is the XaaS (as a service) language that we keep hearing SaaS, DaaS, PaaS, IaaS?

We often hear a lot of talk about the cloud and its impact on small businesses and how it's changing the way companies are working. You often hear phrases floating around with (as a service) attached to them. "As a service" is a phenomenon that started popping up after the cloud became prevalent.

For example, the acronym SAAS is defined as "software as a service." The acronym DAAS is "desktop as a service." IAAS is "infrastructure as a service," and there's PAAS which is "platform as a service." Those are kind of just like umbrella names. An excellent example of Software As A Service in which many you may be familiar is Microsoft Office.

With Microsoft Office, you would buy the software traditionally, install it on your computer, and then you're done. That's called a perpetual license. You usually don't have to pay anything extra. You pay a few hundred bucks initially, you install it on your computer, and that's it.

Then you have the other option: a subscription license where you pay almost nothing upfront and favor a monthly or yearly subscription to get the same products. In this model, you're getting the software as a service.

What are the benefits of the two? One option is just a one-time sale. You purchased it with capital expenditure upfront; then you hold it for life if you want, but you'll need to re-purchase another product when it needs to get upgraded. Also, often you'll need to re-download it, reinstall it, check compatibility issues, etc.

With software as a service, the software automatically upgrades, and you get the latest features and bug fixes almost instantly without waiting until the new iteration of the software. You open up the app, and updates are pushed, for example, while you're working in the background or sleeping.

The subscription model saves companies and small businesses from having to shell out a lot of money upfront, eliminates the frustration of dealing with software upgrades, and gives a lot of predictability to cost. Overall, it streamlines the workforce's flow and avoids surprises, so there's no more middle-of-the-day downtime due to upgrades happening.

Do clouds keep data safe from hackers and other threats?

Transitioning into the cloud is not an issue; the cost is not an issue; the data being off-site is not an issue; what about security? Security is a huge concern right now. You hear about ransomware and malware attacks on the rise, and many people with bad intentions are spending time sitting at home on their computers trying to wreak havoc on small companies and their data. Are clouds safe?

Often, we discuss incidents that happen with clients and potential clients. Some of them even come to us with issues that occurred, and then they start considering and evaluating different cloud models that could work for them. Let's be clear, malware could infect a traditional company, and it could even infect a cloud. However, here's where it's different. A cloud company's sole focus and purpose are to make sure your data is safe.

Your data is always readily available, so they specialize in making sure you don't get any malware and that your information is always backed up. If your job is to be an attorney or an accountant, you wouldn't want to be concerned about fighting and protecting your information on day-to-day. All you want to do is offload your information to a professional cloud service and trust that they know how to manage and protect your data.

Why clouds make sense during the COVID pandemic?

We talked about cost, data access, data security, the basics of the cloud, and the benefits of the cloud to small businesses. We'd be remiss if we didn't mention that we're still amid a pandemic, and it's having a massive impact on companies.

Forbes projects that as many as four million small businesses might be out of work and may be forced to shut their doors by the end of the year. Why does a cloud make sense during this pandemic?

An excellent example of why it does make sense is we have seen firms where nobody can no longer come to the office (a leased office). For some of us, we don't know how long these restrictions are going to last. Leases are becoming less important. It's an expenditure that you have to pay every month for office space which now you can't even use. It's usually one of the most significant expenses that you'll have as a business owner.

The cloud allows you to work and collaborate easier between employees. With everyone working remotely, you could drop the lease and possibly go all cloud. Currently, there is a big transition to the cloud happening. As we know, there are tools like Zoom, Microsoft Teams, and other cloud-based services to allow remote work.

Conclusion

Currently, there's a lot of benefits right now for small businesses to switch to the cloud. Hopefully, this article has cleared up some confusion and has solved the cloud mystery, and hopefully, all small business owners have found this information valuable.

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