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What Small Business Owners Need To Know About The Cloud And Cloud Computing

“Cloud computing” and the “power of the cloud” are a couple of the biggest buzzwords in business technology during the past few years, but what does the “cloud” really mean for small business owners?

Many people assume that “cloud computing” is only a topic of interest for IT professionals, or that it’s a highly technical subject that is hard to understand. The truth is, the cloud is all around us and we’re already seeing amazing developments from cloud computing and cloud-based services in our everyday lives as consumers – everything from smartphone apps to mobile banking to services like Gmail or Google Docs.

If you look a bit closer, you’ll find a number of ways that cloud computing can help your business as well. There has never been a better time for small business owners to connect with the power of the cloud to drive increases in business productivity and profitability.

What Is Cloud Computing?
When we talk about the cloud, we are talking broadly about online storage, tools, and services that make it easier for people and businesses to connect, share, store information, build relationships, make sales, and create value. “Cloud computing” is not just about technology; it’s about finding new ways for your business to work efficiently and access convenient tools and serve your customers better.

In general, cloud computing is a matter of providing certain technology solutions (software, platforms, servers, infrastructure, etc.) as a “service” instead of as a product. With cloud computing, rather than buying software or buying a server that is physically located at your company’s office, you are “subscribing” to a service by paying to use someone else’s software/platform/server, which is accessed online.

Transitioning from the traditional way of managing IT to using cloud computing is like the difference between owning a car and having to pay for oil changes, new tires, the cost of repairs, etc. and using a ride-sharing app like Uber (which itself is an example of a cloud-based service that has become possible with the “power of the cloud”). You still get where you’re going, but at a fraction of the cost.

Why Is Cloud Computing Important For Small Businesses?
Cloud computing is particularly exciting for small businesses because it is creating more of a level playing field. Small businesses now have the ability to access the same types of IT services that used to only be affordable for large companies, but at a cost and scale that works for a small business’s smaller size.

For example, instead of having to pay the costs of owning their own IT servers and systems, small businesses can get access to cloud-based IT providers. Instead of backing up their own hard drives on-site, small businesses can sign up for online backup and disaster recovery services that store and save all of the business’s crucial data online.

Not only is this type of service cheaper than traditional ways of managing IT for small businesses, it’s also safer for disaster recovery and business continuity planning. For example, with traditional IT before cloud computing, companies typically had to house their servers on-site. This made them vulnerable to losing their data in the case of a fire, earthquake, flood, or other natural disaster. With cloud computing, you can store your company’s most important information in a secure cloud-based system that makes it easier for you to focus on doing business instead of worrying about data storage.

How Prevalent Is Cloud Computing For Small Businesses?
Cloud computing is becoming the “new normal” for small businesses. According to a July 2013 article in Forbes, 61% of small and medium-sized businesses (SMBs) were currently using cloud-based solutions, with an additional 5% planning to add cloud services in the next six months. Smaller companies are also more likely than larger companies to use cloud-based solutions: 69% of SMBs with fewer than 20 employees were already using cloud computing, compared to 55% of those with 250-999 employees.

What Are Some Examples Of Cloud Computing Tools For Small Businesses?
Small business cloud services fall into a few main categories:

  • Software-as-a-Service (SaaS): Instead of your business having to own your own licensed copy of shrink-wrapped software (like Microsoft Office, etc.), Software-as-a-Service tools enable your company to, in effect, “subscribe” to an online application or service. Examples of SaaS cloud tools include Google Apps, Salesforce.com, online accounting software, online invoicing or payroll management programs, or any other online tools that help you manage your business and be productive. For example, many of the small business tools in this guide are technically “SaaS tools” because they all rely on storing and accessing key business information in the cloud.

Most small businesses will only need to use SaaS tools, unless they have more complex or expansive information technology requirements. In that case, the following categories of cloud tools might be of interest:

  • Platform-as-a-Service (PaaS): If your business creates apps, you can use an online PaaS tool as your platform to create and deploy custom applications. Examples of PaaS services include Windows Azure and Cloud Foundry.
  • Infrastructure-as-a-Service (IaaS): These cloud tools enable small businesses to buy a share of IT infrastructure such as server space, memory, storage, firewalls, etc. instead of having to pay the higher costs and manage the complexity of keeping their own IT infrastructure on-site. Examples of IaaS services include Rackspace and Amazon EC2.
  • Backup-as-a-Service (BaaS): Instead of using external hard drives or on-site servers to back up your business’s key data, you can use an online backup service to store your business-critical information in a secure online system that gives you multiple layers of reassurance and protection. Examples of BaaS include Amazon Web Services and Carbonite.

Cloud services for small businesses are becoming more popular than ever before. Instead of being bogged down by the costs and complexities of managing IT in-house, small businesses can expand their productivity and reduce their risks by signing up for cloud-based IT services. Cloud computing has also made possible a wide array of exciting, time-saving, money-making tools for small businesses that make everyday life as a SBO a lot easier. For example, cloud services make it faster and more efficient to send invoices, manage sales tax payments, and handle many other operational challenges of running a small business.

There’s never been a better time for your business to tap into the “power of the cloud.” It’s not just an IT buzzword; it’s a new way of running your business.

Are you using the power of the cloud? Which cloud services are most important to your business’s success? Tweet us @KabbageInc and let us know!

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