As InstaCloud launches a private cloud solution for smaller businesses, co-founder Steve Belton argues it is time more effort was made to explain the benefits of the cloud to SMEs
In the last decade, cloud computing has been a game-changer for businesses of all sizes and particularly SMEs. More than 580,000 start-ups were registered with Companies House last year, and much of this growth can be put down to the fact that cloud computing technology allows new ventures to be in business almost instantly, with an IT infrastructure that would be far beyond their reach if they were required to buy and host it on-premise. Rapid deployment allows new, innovative SMEs to punch above their weight and compete with larger, more established peers almost immediately.
For existing SMEs, deploying cloud services is not – or is not perceived to be – quite so straightforward. Research from the Federation of Small Businesses shows that only a quarter of small firms are actually investing in technology such as cloud computing, even though there are many benefits in going down this route. It seems that new SMEs are more willing to embrace new technologies than their established competitors.
Barriers to entry
Major businesses across the globe have already switched from on-premise IT solutions to the cloud and are enjoying the advantages doing so brings, so why are SMEs slow to make the transition? A survey conducted by Oxford Economics shows that many SMEs, while accepting the need to go global in order to prosper within their own market, are more interested in technologies such as business intelligence and mobile solutions than cloud technology.
Many SME business owners are scared about the concept of cloud and have concerns about the perceived cost,complexity and risk involved. Indeed, 35% of SMEs do not fully understand the benefits that the cloud can bring and are therefore choosing to ignore it. Yet, cloud computing is changing the way people do business, and by ignoring the potential of this technology, SMEs are missing out on its ability to transform productivity and improve competitiveness.
For SMEs, the cloud has four stand-out benefits:
Cloud technology has significant cost advantages through a reduction in infrastructure, upfront capital requirements and on-going maintenance costs. A recent report from the European Commission states that the adoption of cloud computing could enable 80% of organisations to reduce their costs by 10%-20%.
Many cloud computing services offer the option to pay monthly – a significant benefit for SMEs dependent on healthy cash-flow. Pay-as-you-go options allow businesses to access sophisticated software with no upfront fees and no lock-in period.
3 Business agility
With mobile technology, business can be done anywhere there is an internet connection. Cloud computing lets businesses make the most of this by enabling staff to access their applications and files on the go. This can be extremely beneficial for businesses that employ freelancers or have a mobile workforce. The flexibility the cloud brings is also helpful when staff have trouble getting into the office due to travel disruptions;because employees are not reliant on on-premise technology or servers, a business can be run from any location.
Historically, one of the largest barriers to the adoption of cloud computing has been concern over data security, with 66% of businesses citing this as their main worry. However, research shows that, contrary to public perception, cloud providers typically offer increased security at a much lower cost than SMEs could achieve. Hosting data in a UK datacentre can be much more secure than managing it on-site.
With their capacity to adapt to an ever-changing business environment, SMEs are vital to the growth of the UK economy. Innovative start-ups understand the transformational potential of the cloud. It is important now to extend this awareness to all SMEs. The digital and wider business community must continue to encourage and support SME adoption of innovative technologies, including the cloud.
Steve Belton is Head of Cloud Engineering & Co-Founder of InstaCloud. Previously he was a senior partner technology strategist at Microsoft. InstaCloud enables small businesses to enjoy the advantages of a mini private cloud, without the expense and IT overhead of having to set up and manage a platform themselves. The InstaCloud solution is based on Microsoft’s Cloud OS technology and hosted in UK data centres in Slough and London. Customers pay for RAM and storage usage, with fixed monthly billing for convenience and easy budgeting. Capacity can be expanded at any time to meet changing business needs. To find out more or sign up for a free one-month trial, please visit