While more and more large enterprises are jumping on the 'cloudwagon', there is still apprehension amongst the small and medium sized businesses (SMB's), over whether cloud is here to stay or just a passing fad. SMB's still rely on big companies for "trial and error" of such new disruptive technology. The argument is that big businesses have big bucks to spend - and only when a technology or system is proven functional in large companies, do SMB's feel confident in adopting it.
However, these doubts are fast getting dispelled as more and more success stories of cloud adoption by SMB's are coming to light. Groupon is a great example of a company that grew rapidly with a minimal asset base by leveraging cloud solutions from providers like Salesforce.com and Amazon -- it manages a global user base of over 35 million in less than 5 years since inception.
In fact one school of thought is that factors core to cloud-based platforms -easy scalability, lower operational costs, faster implementation and quicker ROI, are more valuable to SMB's since face stiffer competition to survive, vis-à-vis their large counterparts.
Here are some major drivers for cloud adoption by SMB's:
1. Real time data access and ease of scalability
SMB's cannot afford expensive centralized data storage systems, which means their data is scattered across multiple computers and generally may not be remotely accessible. This can pose a significant challenge to SMB's as their business demands flexibility both in terms of use of staff and operations. Cloud based applications allow keeping all the data in a single repository from where it can be accessed easily and remotely 24x7. Additionally since the cloud-service provider owns upgrades and other changes to the application, the SMB can manage their IT operations with lean physical infrastructure and a skeletal support team.
Secondly easy ramp-up or ramp-down feature offered by most cloud providers enables SMB's to scale their resources to mirror their growth path.
2. Availability of end-to-end cloud solutions
Business processes such as storing and distributing data, creating and allotting tasks, communicating and collaborating with colleagues, are valuable for the success of any organization.. The surge in the number of business solutions on cloud platforms that are either end-to-end solutions or can be easily integrated with other complementary cloud solutions in the market, gives SMB's the benefit to leverage the cloud to the fullest extent for their business needs, at a fraction of the cost of traditional on premise solutions.
3. Greater security of data
It is believed Cloud based applications allow keeping data more secure than the small scale hardware storage facilities deployed by SMB's as data confidentiality and security is usually central to a cloud provider's value proposition.
4. Cost Benefits
It is important for SMB's to operate with minimal costs due to the competitive environment they are in. The Pay-per-use models offered by cloud applications means they have negligible upfront costs and can avail of the latest technology solutions with reasonable operating costs. This empowers SMB's to afford enterprise class solutions for their business needs.
All in all, cloud applications are here to stay and although it is still early days, it is clear that SMB's will need to adopt cloud technology in future if they want to stay ahead of challenges and competition.
Software as a service or SAAS is now more commonly referred to as Cloud Service. Essentially, it is a software application delivery method where the vendor of the software hosts the application on line and makes it available to users on a subscription basis.
The benefits of this delivery method include lower overall development costs, centralized upgrades, improved integration and lower initial setup costs. Essentially, all these advantages translate into a lower cost alternative for the end user. However, there are some significant disadvantages mainly in the area of data security.
Any organization considering using a SAAS application for a significant business process such as their CRM should investigate the vendors certification and compliance specifically to ISO/IEC 27001 and, in general to the entire ISO/IEC 27000 series. This standard specifies a management system that is intended to bring information security under explicit management control. Being a formal specification means that it mandates specific requirements. Organizations that claim to have adopted ISO/IEC 27001 can therefore be formally audited and certified compliant with the standard.
It must be said at this stage that accreditation to these standards is not the limit of the concerns. Many SAAS critics believe that the standards should extend much further. Some critics go as far a to say that security standards fail to consider the security issues that SAAS applications pose by their very nature, For example: If you are on business in the UK from your office state side and you access your SAAS software the vendor's server may move that data closer to you UK server for faster access. This process immediately breaches the Federal Information Securities Act that requires information Cloud Security of a secure nature to be kept in the US.
Some SAAS vendors have taken a rather arrogant approach to this expressing in no uncertain terms that this is the way the Internet works while others have introduced mechanisms to ensure that data is only held on servers in the users chosen geographical location.
It is worth noting here that by far the most common security issues lie with the user. This has always been the case and will remain so regardless on vendor's attempts to facilitate the process through forced password changes, strong password policies etc. Salesforce, as an example requires that users logging on from a different location go through an email verification process prior to accessing the application.
Another criticism of SAAS applications is potential data loss and inaccessibility when there are Internet access issues. While it is arguable that the SAAS providers generally have better backup facilities and more reliable Internet access than the great majority of the clients this is still a concern expressed my many. Some vendors provide the option for data to be stored locally which is periodically synchronized with the server data. This is a workable solution for some but for others the volume of transactions and the sheer size of the database makes this impractical.
In summary, while SAAS clearly has a long way to go in addressing security issues this is, at least to some degree because we expect much more of it than we do our own systems. SAAS, for some is a leap of faith and for many the convenience and the cost far outweigh the downsides.