Why cloud computing makes sense for small business

in Technology by Justin Lim
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cloud computing small business

While cloud computing is as old as the internet itself, it’s only been in the last few years that the term ‘cloud’ has gained momentum as a powerful business tool. With the potential to revolutionise how business is done, it’s an essential technology – even for small businesses.


According to market intelligence firm IDC’s Australian Cloud Services 2011-2015 Forecast and Analysis report, 32.4 per cent of small businesses are planning to adopt cloud services within the next year, while 20.6 per cent have already done so.

The cloud: what is it?

The cloud is certainly a buzzword that has captured our imaginations. Because the cloud is itself a concept more than a tangible product, defining it can be difficult. Jonathan Crossfield, Community Manager at Australian cloud storage provider Ninefold, says that a good analogy for describing cloud computing is the history and evolution of electricity:

“First, if you wanted power you needed to run a generator. Eventually, electric power stations sprung up and a network grew that meant you could plug in and use as much or as little electricity as you wanted – only paying for what you used. No need to pay for generator hardware, people to service it, fuel, or being limited by its overall output. Cloud computing is providing the same revolution to computing.”

In essence, cloud computing is using services and applications over a shared network: the internet. That network, or space, can be private, public or a hybrid of both. Nowadays, there are multitudes of cloud services out there that are used in a variety of ways. The rise of streaming video services, social media, document sharing services and even backing up family photos is increasingly made possible by the cloud.

Why should businesses adopt cloud technology?

What are some of the advantages of cloud computing for business? The answer to that question could run for pages. One real world example can be seen with the 2011 floods in Queensland. Many businesses that employed traditional forms of IT and data storage were forced to shut down completely because of damage to locally housed servers.

However, Cloud Central founder and CEO Kristoffer Sheather notes that with “secure open cloud-based infrastructure, information is hosted across multiple secure, geographically dispersed data centres. By doing so, businesses are able to build dependable archive and recovery solutions, as well as respond quickly to competitive challenges.”

Besides the security cloud computing provides, the financial advantages are often cited as key benefits. Because cloud services are all virtual, you never have to invest in hardware. Furthermore, since the cloud is accessed and administered online, it doesn’t matter where you are – all you need is an internet connection to manage everything.

“What this means is reduced capital expenditure in favour of operational expenditure,” says Crossfield. “Cloud computing also means faster implementation. No waiting for IT to provision, or for hardware to arrive, be installed, configured on someone else's schedule. You can have an idea and fire up the resources for it straight away, experiment, see if it works, and then power up or down. Therefore it fosters innovation and can-do solutions.”

What’s the catch?

When businesses discuss cloud computing, a common concern for many is privacy and whether the data is secure. Sheather points out that security is not a problem exclusive to cloud networks, but is an issue facing all aspects of IT:

“The increasing tide of successful, high profile hacks has been a direct result of poor security protocols during the development of web applications, so the two shouldn't be confused. We encourage any business thinking of moving into the cloud to consider the security level offered by cloud providers as well as considering what they are putting in the cloud. In the case of Cloud Central, the data centres we use are on the whole-of-government Data Centre Facilities Panel and they are very serious about physical security as well.”

Future of the cloud

Cloud computing has grown beyond the trendy buzzword to become integral to the operation of many companies and will come to underpin more and more of business, consumer and personal online activity in the coming years.

According to Sheather, companies of all sizes are realising that the management of servers in-house can be a costly exercise, especially if the demand for applications and data on those servers fluctuate:

“Infrastructure as a service allows Australian business to invest in their ideas rather than servers and frees up critical financial resources, which can be better invested elsewhere. True cloud offers better control of your computing environment and an improved ability to innovate and respond to competitive pressures. What's not to like?”

This article represents the views of the author only and not those of American Express.

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Justin Lim is a freelance writer and has over four years experience writing on business related topics. Justin is a former journalist at Money Management – a financial trade publication – and is currently freelancing, writing in a number of fields ranging from business to entertainment with regular features in Yahoo Moneyhound and businessroom.com.

Poll Results

How many hours do you work on your business each week?

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Poll Results

How many hours do you work on your business each week?

20-30: 18%
30-40: 18%
40-50: 23%
50-60: 41%