With the advent of cloud computing, every organization across the globe is driven by a conundrum – to be on the cloud or not? As much as the cloud is a prominent influencer in today’s advanced business decision making, it is always prudent to evaluate the strategic need before jumping on to the bandwagon. This is especially critical for the smaller, upcoming companies who are driven by cost and scalability. This introspection should be a greater driving force than the love to embrace emerging technologies.
For a small to medium size enterprise what could be some of the areas they need to evaluate before opting for a cloud based service, infrastructure or platform?
  1. Business objective – the business objective is reason number one to determine if the organization needs cloud or not. This factor is not restricted to smaller players alone and every organization should drive their cloud initiatives based on their business objectives. The difference for smaller organizations is to keep in mind their core business and evaluate their growth patterns over a time period. They may wish to start off with a smaller cloud initiative, such as using Google Apps for business, and then move on to larger cloud infrastructures over a sustained period.
  2. Scalability – with technology advancements happening by the hour in today’s fast paced world, smaller organizations are faced with the challenge of scaling their infrastructure. Even if they are able to sustain scalability to a certain extent, legacy systems cause tremendous overheads and deter companies from moving ahead at a faster pace. The cloud helps you off-load scalability related decisions on to your service provider without having to worry too much about upgrades and new hardware requirements.
  3. Cost – the popular fear among small organizations is the cost involved in acquiring a piece of software or technology. They assume that this is a one-time cost and conveniently overlook the aspect of cost involved in maintenance and upgrades – an off shoot of the scalability aspect mentioned above. There are costs involved in running an IT department to maintain these systems, especially if the core business of the organization is non-IT related. With the advent of cloud, businesses are able to focus on their core activities without having to worry about technological aspects. This does not necessarily mean lesser IT staff but a more judicious use of skill and talent available.
Small businesses look up to cloud technology to help sustain their IT needs and the above three factors are a good starting point. However, there are other factors that need to be evaluated while choosing an appropriate cloud service or platform. Make no bones – the cloud is definitely sustainable by small businesses, but they need to look beyond the above three core factors before deciding on their choice of cloud-based needs.
Let us consider CRM solutions, one of the most popular applications required by any growing business – small or large. CRM solutions are offered on the cloud as a SaaS (Software as a Service) model reducing the cost of implementation tremendously. For a small business to opt for a cloud based CRM, the following could be some of the driving forces –
  1. Implementation Complexity – how complex or simple is the solution to be implemented; both from configuring business needs and maintenance of data or admin overheads? CRM solutions need to be implemented with great care considering the amount of complexity associated with business processes and customer needs management.
  2. Ease of opt in and opt out – does your cloud solution allow the flexibility to move in from one platform to another platform? Can you expand your platform needs from a custom development to manage your CRM needs?
  3. Space and hardware requirements – will your CRM cloud solution provide adequate storage? How easy is it to scale up your hardware or storage? Many cloud providers automatically provide increased storage or hardware usage, while you don’t want to go through a painful process of obtaining more space at a premium cost. Very often organizations sign up for what seems like the perfect plan only to realize eventually that they require an extra 500 MB of storage or scale from a 2 GB RAM to 4 GB RAM during peak usage. How easy is it to get your cloud service provider to scale up without spending too much time on the paperwork is a critical factor.
  4. Security of data – This is the single largest barrier after cost that stops small (or any) businesses from opting for cloud solutions, primarily due to the fact that customer data is not stored or hosted in your control.
  5. Integration – how easy is it to integrate other aspects like financial systems, back office systems or ERP systems with cloud based CRM offering, without compromising on security of data and minimal business overheads like workflow integration etc.?
  6. Service Level Agreements – The SLA is a commonly overlooked aspect, which if not addressed properly can cause severe business downtime. What kind of SLAs does your cloud service provider offer?
  7. Mobility – This is the natural step after a cloud based CRM solution? How flexible and advanced are the providers in implementing mobile solutions for you?
The above broad guidelines, coupled with the core factors, provide a baseline to evaluate solutions and offerings on the cloud, especially for small businesses. And as we say at SaaSpie, the cloud is indeed the limit!
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6 Responses to “Cloud for small players – to be or not to be?”

  1. ezthde

    Beautifully written. But would you agree to the fact that cloud space costs are lesser? Yes, at the point of starting your business. A typical small business should be going through a tough period may be for the first 2 years. Do you think for a small business to keep its pace with increasing demands of consumers, would cloud ever be their choice or even if it does be a choice, would it be affordable ? Just a thought that came across my mind. No offence pal :)

    • Praveen Prakash

      Hi Ezthde,

      Definitely agree with you that costs are still big factor, at least in the initial phase. Even when business grows, they will need to re-evaluate their priorities in terms of where they need to be investing. For ex: if they are using cloud only for storage, they may want to move away as the space requirements are getting expensive on the cloud. But on the other hand, if the business is growing and they wish to meet customer demand, they may opt for enterprise applications on cloud which would definitely work cheaper when compared to on premise solutions. Bear in mind that businesses evaluate for cloud applications or storage they also need to factor the trade off in terms of setting up an IT Team, procure infrastructure, continuously upgrade hardware/software periodically etc. So I believe that cost aspect has to be evaluated on a trade off basis before deciding on a solution.

      P.S. – appreciate all comments, no offence taken. We at SaaSPie believe in Learn, Share and Grow :)

  2. krishna

    Nice one Praveen and thanks for sharing the post. I think almost all applications are being moved to cloud for its ease of access and availability. But as you mentioned, the cost and security has been the two major constraints for every business in moving towards the cloud. As more and more cloud hosting providers are entering the market, the cost is factor is minimized, but security is still a major concern for many especially domains like banking where the data privacy is of utmost importance.

    • Praveen Prakash

      Thanks Krishna, in addition to security organizations need to evaluate to what depth they wish to be on the cloud – from something as simple as using the cloud for storage to running enterprise applications. Once this vision is clear, then charting the course of action is lot structured though not necessarily simple.

  3. vinayverma2504

    Couldn’t agree more with you on ‘evaluate the strategic need before jumping on to the bandwagon’. But could we also talk about or mention something to understand the potential and the risks of cloud computing for better understanding of its Pros and Cons.

    • Praveen Prakash

      vinayverma2504 – while I would love to have a discussion on the potential and risks pertaining to cloud computing via the comments section, it can be bit cumbersome. Will take this as a cue to come up with a new post sometime end of this week with couple of examples to highlight the pro’s and con’s