Industry Watch: Cloud has more value in smaller shops
March 23, 2012 —
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Among the messages from purveyors of cloud solutions is the notion that hosted software on rented hardware can save organizations money in terms of utility costs, rack servers, and IT staff. They point to large organizations with multiple massive server rooms and say the savings will be in the millions.
But what if you’re a small or mid-sized business? The savings from your own small server room to a hosted solution is not all that much in terms of what the larger companies can save. So what’s the value for a smaller business?
It’s simply this: The cloud gives small companies access to resources it otherwise would not be able to afford at all. And that’s where real value comes in.
I was having this discussion with Siamak Farah, founder and CEO of InfoStreet, a Tarzana, Calif.-based company that makes cloud application management software, and he explained that he is aiming his company squarely at smaller businesses.
“It is my belief that small businesses actually need cloud substantially more than large businesses,” he said. “The reason for that is, if large businesses make a mistake, they have several resources to overcome it, where a small business...any mistake could be potentially fatal to them or very crippling and actually keep them quite a bit behind.
“Secondly,” he continued, “access to resources isn’t as available for small businesses, meaning that if you have a team of star IT people, that’s easy to attract for a larger corporation, especially if you’re in one of the major metropolitan centers. But if you’re a small business in Cheyenne, Wyo. or whatnot, you’re not going to have access to a slew of people, and if you do, you may not be able to afford them. So the cloud provides not only software for them, but also built-in IT services for them, things that they couldn’t afford otherwise, and in a major way levels the playing field for them.”
To put it another way, Farah said, “If you can’t afford a Rolls-Royce, the next bet instead of owning one is to be able to pay a certain amount a month and be driven in it, so that’s just as good as an experience.”