Warily, Small Businesses Look To Cloud Computing

As more small and medium-sized businesses embrace the power of cloud computing and other Web-based tools, a growing cadre of vendors is providing such tools -- often at low cost or free of charge.

This week MyBizHomepage announced a new online platform for small companies' financial records, aimed at small-business owners who need fast and easily understood insight into key accounting data. Founded in 2006, MyBizHomepage offers a free service that pulls data from the small businesses' QuickBooks software and pushes it to a desktop via a Web browser.

"We help small-business owners better understand their financial information and react to it," said MyBizHomepage founder Peter Justen. The service, which is free to users, has customers in 42 countries. While Salesforce.com has been offering CRM tools online for almost a decade, entrepreneurs and heads of small businesses are just now starting to fully embrace the power of Web-based, on-demand computing and software as a service, said MyBizHomepage CTO Jim Bird.

"Our users are definitely headed in that direction," toward cloud computing, Bird said. "But they're not really there yet."

Matt McAdams, CTO of TrackVia, a Denver company that offers Web-based databases to small businesses, said that the cloud revolution has just begun to reach the millions of small businesses in the United States.

"My perception is there's been a sea change" in the last year or so among small and medium-sized businesses , McAdams said. "The idea of cloud computing and putting your data online has become drastically more palatable" to small-business owners.

It's not just startups going after the SMB market. IBM said in May that it will launch a global online marketplace that will feature business applications and services aimed primarily at small and midsize companies.

QuickBooks, by far the dominant accounting software program for small businesses, itself began offering a software-as-a-service version, called QuickBooks Online, in 2000. And it's not just back-end systems -- SMBs in general have not mastered the Web as a marketing and commerce tool, compared with large corporations.

"The Internet has become an incredibly important mechanism for consumers, with e-commerce growing quickly even in a downturn," said Ivan Croxford, managing director for BT Tradespace, "but that spend is not going the way of SMBs."

That's because most small-business owners lack the time and expertise to develop and maintain a dynamic and attractive Web presence. Tradespace, a division of U.K. telecom giant BT, is trying to change that by offering Web hosting and tools to allow small businesses to use some of the new social-networking tools that consumers have embraced in their personal lives. Launched in the United Kingdom last year, Tradespace is a sort of Facebook for small businesses, where they can communicate with customers, attract new business, add Web 2.0-style applications -- and sell products and services.

"With Tradespace you get a very simple toolset that requires no technical knowledge to create a vibrant online presence," explained Croxford. "We give our small-business customers simple-to-use marketing tools all based around social media."

Croxford says there are some 165,000 businesses on the Tradespace platform. They're still early adopters, though: According to a survey released in June by the IT reseller CDW, only about 27% of small businesses have adopted some form of Web 2.0 technology. That's still way behind large enterprises (67%) and 53% of midsize businesses.

InformationWeek recently developed a guide to cloud computing that looks at the offerings from Amazon, EMC, Google, IBM, Microsoft, Oracle, Salesforce, and Sun Microsystems. You can download the report (registration required).