Cloud computing has proven a boon to businesses - especially small businesses. With cloud services, small businesses reap the benefits of not having to deploy physical infrastructure like file and e-mail servers, storage systems or shrink-wrapped software. Plus, the “anywhere, anytime” availability of these solutions, means hassle-free collaboration among business partners and employees by simply using a browser.

For a small businesses, outsourcing IT to the cloud lowers the need for specialist skills and frees managers to concentrate on the core business. It can allow a small business to take a “big company” approach to problems by increasing efficiency, giving access to sophisticated technology without the need of an IT consultant or tech worker on the payroll. 

In fact, it's not a stretch to say that aside from a locally installed desktop operating system and browser (or increasingly, from a single mobile device) a lot of today's small business technology needs can be fulfilled almost completely with cloud-based offerings.

One thing is for sure – Cloud computing is here to stay and it is growing rapidly. But cloud computing isn't just for data, you can also use it to run applications and software remotely, without being tied to one computer.

Cloud computing is still at a very early stage and will only grow over time. The latest market forecasts predict 30% annual growth in the industry, as more and more people adopt the latest technology to store information and run applications in a virtual environment. Even so, there are already a large number of providers of different sizes offering a wide range of cloud-based services, these range from full blown business applications, to file storage or spam filtering.  For the most part businesses have to plug into cloud-based services individually, but the ability to aggregate and integrate these different services is beginning to emerge.

Cloud computing is usually broken down into three broad catagories; 

Infrastructure as a Service (IaaS):

IaaS is a form of Utility Computing it allows businesses to purchase infrastructure from providers as virtual resources on an ‘as needed’ basis. This virtual hardware includes computers, raw processors, storage software platforms and so on. Instead of being physically based in an office, the hardware is located in the ‘cloud’ and data is accessed via the internet. Early enterprise adopters mainly use utility computing for supplemental, non-mission-critical needs, but one day, they may replace parts of the datacenter. The basic idea behind IaaS is not new, but this form of cloud computing is getting new life from big providers like Amazon, Sun, IBM, Rackspace and Google. 

Platform as a Service (PaaS):

PaaS provides a platform on which you can create and deploy custom apps, databases and line-of-business services integrated into one platform. You build your own applications that run on the provider's infrastructure and are delivered to your users via the Internet from the provider's servers. PaaS provides all the resources necessary for small business owners to create their own software and programmes. Usually this will include an operating system, programming environment, database and web server. This can save you the cost of investing in and maintaining the hardware and software which would otherwise be necessary. However, these services are constrained by the vendor's design and capabilities, so you don't get complete freedom, but you do get predictability and pre-integration. Examples of PaaS include Windows Azure, Google App Engine, Salesforce.com's Force.com and Coghead. For extremely lightweight development, cloud-based mashup platforms abound, such as Yahoo Pipes or Dapper.net.

Software as a Service (SaaS):

While IaaS and PaaS will have some value to businesses large enough to have their own computer installations, it is SaaS, with its access to applications, which provides most value to small businesses. With SaaS a single application is delivered through the browser to thousands of customers on a subscription basis using a multitenant architecture – in other words, you run the software remotely through a browser, without having to go through a lengthy installation processes or worrying about how your hardware will cope with the application. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting. CRM is by far the best-known example of SaaS among enterprise applications, but SaaS is also common for HR apps and has even worked its way up the food chain to ERP. And who could have predicted the sudden rise of SaaS "desktop" applications, such as Google Apps and Zoho Office?

Web Services Integration:

Today, with a lack of integration between different systems and applications, cloud computing might be more accurately described as "sky computing," with many isolated clouds of services which IT customers must plug into individually. The integration of cloud-based services is in its early days, but the new and growing area of web services integration employs 'in-the-cloud' integration technology and APIs which enable developers to exploit functionality over the Internet, and integrate separate best of breed applications into one system rather than having to develop a custom application from the ground up.

The idea of loosely coupled services running on an agile, scalable infrastructure should eventually make every enterprise a node in the cloud. It's a long-running trend with a far-out horizon. But among big metatrends, cloud computing is the hardest one to argue with in the long term.

Potential pitfalls:

Data security

When it comes to embracing cloud computing, the main worry on most people's minds is security. By accessing cloud services over the internet, you are sharing them with people and organisations that you don't know, possibly including business competitors.

Is your data safe? The answer, in most cases, and with reputable cloud suppliers, is Yes. Indeed, the level of security achieved by a good cloud supplier, with in-house experts that follow the latest developments, is generally much better than most small businesses can manage.

Controlling your information

The next issue that comes up is control, as your data is held on someone else's system. It can be hard to get your head around the fact that you don't know which computer – or even which country – it is stored on. So to what extent do you still own it?

It's an area where you need to tread carefully. You may be subject to different laws depending on where the data is held – particularly data containing personal information, such as employee records. You may be in breach of contract with your customers if data is disclosed or withheld by your cloud supplier, and you could face a damaged reputation in such cases. Different cloud suppliers have different contractual terms which you should be aware of as they might impact your ability to fulfil your legal, contractual, and moral obligations.

Flexibility

Finally, some people are concerned by the fact that it is difficult to "mix and match" cloud services. Cloud isn't like the internet in this respect. You can plug in a new internet router or change your internet service provider (ISP) without too much hassle because the internet is based on a few simple standards.

This is not currently the case for software programmes running in the cloud. If you use a cloud service for your records or accounts, you are likely to find it more difficult to change to another similar service. And, if you use more than one cloud service, making them work together will be much harder than making a new router work with your ISP.

Choosing a Supplier

Cloud can provide real benefits to small businesses, increasing efficiency, time-management, remote working potential and saving physical space, but there are also pitfalls to avoid. You should choose your cloud provider the same way you would choose any other supplier and ask a few crucial questions:

• Is the cloud service provider stable and trustworthy, with a reputation to lose?
  
• Are the conditions of contract reasonable and fair to you?
  
• Will it benefit your business?

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SmartCloud can help you evaluate your cloud computing needs, select the most appropriate suppliers and integrate various applications into one integrated solution.