Cloud Computing for Small Businesses (Essay Sample)

 HYPERLINK "http://writepass.com/journal/2012/10/cloud-computing-for-small-businesses/" \o "Permanent Link to Cloud Computing for Small Businesses" Cloud Computing for Small Businesses
Name
To the Chief Editor
Abstract
Cloud computing is the practice of moving computing resources off-site, to be hosted remotely, usually by a third-party company. This article examines the pros and cons of cloud computing from the perspective of small businesses (defined to be those businesses with 50 or fewer employees). The main finding is that cloud computing offers substantial advantages to small businesses in terms of cost savings and increased reliability of service, especially since it allows these businesses to leverage economies of scale that in the past have only been available to larger organizations (Clearcenter 2012: 56). Moving computing resources to the cloud is likely to realize cost savings for majority of small businesses, and there are few existing barriers to implementation, with the exception of those businesses dealing with highly confidential data, where privacy concerns or indeed legal restrictions on the handling of data may prevent such a move.
Table of Contents
 HYPERLINK "http://writepass.com/journal/2012/10/cloud-computing-for-small-businesses/" \l "Introduction" Introduction
 HYPERLINK "http://writepass.com/journal/2012/10/cloud-computing-for-small-businesses/" \l "Analysis" Analysis
 HYPERLINK "http://writepass.com/journal/2012/10/cloud-computing-for-small-businesses/" \l "Conclusion" Conclusion
 HYPERLINK "http://writepass.com/journal/2012/10/cloud-computing-for-small-businesses/" \l "References" References
Introduction
For all businesses, especially small businesses, the ability to react to change is critical. Demand fluctuates, suppliers come and go, and changes in government policy at all levels can strongly influence the business environment (Burgess 2002: 199). Faced with these changes, organizations need to be able to change the way they do business reasonably quickly, or they risk becoming uncompetitive. Information technology and computing, unfortunately, can become barriers to change. Hardware and software can both represent substantial upfront and ongoing investments for small businesses, both in terms of purchase costs and also in the time and effort required to make these solutions part of the everyday work pattern. Furthermore, computing can represent a source of inefficiency for a small business if a certain level of technical expertise is required, since a small business may not have sufficient scale to fully utilize a properly qualified (and therefore expensive) member of staff dedicated to technical support (Molnar and Scheschter 2010: 333).
Cloud computing is an attractive solution to these negative aspects of information technology, since it enables small businesses to outsource technical support and gain resource flexibility via fee-for-service models, or even via services provided for free and supported by advertising. In the analysis that follows, we will examine the benefits that cloud computing can bring, while also covering several potential barriers to implementation that should be borne in mind.
 Analysis
Traditionally, businesses have physically installed hardware, and locally maintained software, to satisfy their information technology requirements. McAfee (2011: 90) describes the “cloud computing” alternative as follows:
“With cloud computing, in contrast, companies lease their digital assets, and their employees don’t know the location of the computers, data centers, applications, and databases that they’re using. These resources are just “in the cloud” somewhere.”
Small businesses have not typically differed from the traditional pattern of local hardware and software ownership. However, due to their size they will face different challenges to larger businesses when it comes to maximizing the benefits of information technology, as noted by Burgess (2002: 4). In fact, uses of information technology by small businesses are different from those of larger organizations. Dixon, Thompson and McAllister (2002: 16) note that:
“Small firms use ICT more as tools to support specific organisational (sic) tasks such as administration and accounting, rely on standard, off-the-shelf solutions, and on external support.”
Small businesses, therefore, typically rely on off-the-shelf hardware and software, and often restrict the range of products in use to office productivity software running on commodity desktop hardware, supported by entry-level server hardware for file sharing. The remaining typical small business requirements are either specifically on-site by nature for instance, printing or already in the cloud such as company blogs, third-party payment options and many others. Research by the Mississippi State University College of Business’s Office of Business Outreach (2008:77) indeed shows that small businesses are already on a path that sees an increasing share of their computing resources hosted remotely, leading to an eventual situation where only those services that are unavoidably on-site, as mentioned above, remain local. This research does indicate reluctance among small businesses to move down this path, though:
“Unfortunately, many SMBs are slow to adopt Web 2.0 tools because they find the technology too confusing or expensive, or they don’t see its relevance yet.” (Burgess 2002: 12)
Still, the advantages of cloud computing to small businesses, both in cost and flexibility, are clear. In addition to cost savings due to the reduced hardware specifications needed to work on documents that are hosted in the cloud (since the remote server handles most of the computation load and the local machine simply displays output), Dimitrova (2011:19) identifies several additional benefits, including the automatic backup of data, remote availability of documents and ease of collaboration and data sharing, either between employees or with suppliers and clients.
This last point, though does highlight the key concern regarding cloud computing, namely the security of data that is stored remotely via a third party. Unfortunately, no system that allows remote access can ever be entirely secure, and examples of data breaches leading to the sharing of confidential data are all too easy to find (ClearCenter 2012: 109). So for a business contemplating a move to the cloud, the key decision will be whether the risk of a data breach outweighs the obvious benefits of the move in terms of cost savings and flexibility. Some businesses are in fact legally prevented from utilizing remote data storage: for example, the Health Insurance Portability and Accountability Act in the USA exclude many remote data storage solutions for health records.
In making this decision, though, it should be remembered that a small business will in all likelihood not represent an obvious target for data theft, and that even in...