Small businesses seek to take off with the cloud

Cloud computing isn't just for the enterprise; it's likely to bring big changes to small businesses too, survey finds

The co-owner of a small Florida-based company was about to have a baby so she sought a more flexible way to run her business.

She found the answer in cloud computing technology.

Julia Suriano, co-owner of Kebroak BBQ Company, a 7-person operation that imports and distributes charcoal to retailers and restaurants across the country, needs access to company information quickly and from anywhere.

"I may be with my kids but while I'm at their tennis practice, I can access my client information and make decisions and get information to people working in the office," Suriano told Computerworld. "I think this is just a beginning. Let's see what else we can use [the cloud] for our company."

Kebroak BBQ is one of the many small businesses that are making the move to cloud.

According to a recent Emergent Research study, 74% of small businesses (companies with less than 50 employees) report using some cloud-based applications - most commonly email, online banking and social media.

As the gradual start grows, Emergent expects that the cloud computing will change how small businesses operate by 2020.

Considering some small business owners today call themselves cloud champions for using Twitter for marketing or Google's Gmail, there's a long way to go before such companies commit to moving data storage and infrastructure technologies to the cloud.

A lot of small business owners and managers have the same misgivings - mainly security and uptime - as their enterprise counterparts. At the same time, Emergent's survey of 500 small business executives in June found that 37% are completely or very confident in the cloud.

That means 63% are not so confident.

"Even though they're using the cloud, most of them still aren't comfortable with it," said Steven King, an Emergent partner and analyst. "When you start talking about putting your financials in the cloud -- the systems you rely on -- that's when" they cite security and downtime fears. "That's the point where they're not comfortable with the cloud yet."

Suriano, though, says she's confident about using cloud-based services in her small business.

In 2012, the then three-year-old company switched from Intuit Inc.'s QuickBooks' desktop software to the company's cloud-based accounting software.

"I can see invoices or how much a client owes, and statements," said Suriano. "It really helps me be outside of the office and still access information in real time."

Kebroak has since added Gmail and Dropbox, a cloud-based storage and file synchronization service.

Suriano said she hasn't had any trouble with cloud outages or security issues but she has warned employees to be careful wwhen storing information from outside of the office.

"You need to be very clear with your employees about accessing information from home and what they can do at home and what they should do at the office," she explained. "They shouldn't download reports that could stay on their personal computer where others could then access them."

However, she said that warning employees to be cautious is a small price to pay for the benefits of cloud computing.

"I think there are more benefits than risks," Suriano said.

King predicts that Suriano's attitude toward cloud computing should quickly spread to other small business owners.

"The big shift to the cloud is going to give them efficiency - cheaper, faster and easier access to tools and applications," he said. "If you're a small business, you could have a customer relationship management system on your own server but that needs to be installed, maintained and supported. If you do that in the cloud, all of that work goes away so it becomes cheaper and easier to manage and install."

That means small companies will have a better chance to take on not only other small competitors but larger businesses as well.

King noted that a small, boutique pharmaceutical company could, for instance, compete with some of the biggest companies in the field because of access that employees would have to resources like cloud-based computer arrays and lab simulation systems.

"Looking at startups and the one- and two-man shops, the cloud is a godsend because then they don't have to invest in buying servers and getting that IT infrastructure in place to launch or run their business," said Jagdish Rebello, an analyst at IHS iSuppli. "They can host all of that on the cloud and put their focus on their business and not on IT."

Rebello also predicts that small businesses quickly will be moving beyond Gmail and onto bigger cloud-based applications.

"They're already starting to move a lot of their own applications and services to the cloud," he added. "They're looking to Google Docs and essentially moving as much as they can to the cloud. It will make smaller businesses more nimble and efficient. I think you'll see businesses change the way they operate."

Jeff Kagan, an independent analyst, said small companies like Kebroak BBQ are smart to start moving to the cloud now.

"Any time a small business is innovative and does something before their competitors do, they get a big advantage," he noted. "Then later on, it becomes an issue that if you don't do it, you're suddenly behind."

Read more about cloud computing in Computerworld's Cloud Computing Topic Center.

Copyright © 2014 IDG Communications, Inc.

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