SMBs Will Rise To Cloud Computing

The trend toward Web-based services tilts the IT playing field in favor of smaller companies.

Fredric Paul, Contributor

June 20, 2008

2 Min Read

If cloud computing offers benefits to enterprise IT departments, it's an absolute godsend to small and midsize companies. Instead of making do with a small, underresourced IT staff trying to emulate the productivity of IT outfits with multimillion-dollar budgets, smaller companies can now access enterprise-class technology with low up-front costs and easy scalability.

Important as those things are, they're only the first steps in a larger shift. Cloud computing doesn't just level the playing field--it promises to tilt it in the other direction. Simply put, today's most powerful and most innovative technology is no longer found in the enterprise. The cloud makes leading-edge technology available to everyone, including consumers, often at a far lower cost than businesses pay for similar or inferior services.

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Years ago, most people had access to the best technology at work, Google VP Dave Girouard said recently. "You had a T1 line to access the Internet at the office, for example, then went home to watch three channels of TV."

Those days are gone. Compare a typical Exchange Server, offering perhaps 500 MB of e-mail storage per user, to Web-based e-mail services that give users up to 7 GB of storage at no cost. (Google's corporate version offers 25 GB per user for $50 a year.) Likewise, compare on-premises enterprise content management systems to easier-to-use and more-flexible cloud-based publishing and sharing systems like Blogger, Flickr, and Facebook. They're free, too.

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Cloud Computing's Strengths Play To Smaller Companies' Needs

Those comparisons may not be relevant to big companies, but they are to SMBs. While large enterprises typically use the cloud for infrastructure services such as storage, SMBs are more likely to plug into the cloud for day-to-day productivity applications, says Michelle Warren, a senior analyst at Info-Tech Research.

In fact, as cloud computing matures, we'll see small companies rely on the cloud for more and more of their technology needs, gradually eschewing the costs and complexity of in-house IT infrastructure.

"We're moving toward a world where IT is outsourced," Warren says. "Maybe not 100%, but 95%. It will happen more in the SMB than in the enterprise, for sure."

Fredric Paul is publisher and editor in chief of TechWeb's, which provides practical technology expertise to small and midsize businesses.

Illustration by Sek Leung

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