Building growth via cloud-based services is one of the most efficient ways of scaling-up your business and it’s capex free. It also enables you to scale down without incurring any losses and you only pay for what you use.

Growing your business can both be stressful and costly, especially if you’re looking for fast growth. You’ll inevitably need to buy new equipment which means you’ll probably have to visit the bank or your investors, and with the additional pressures on cash because of the current recession, it’s unlikely to be an easy process. It’s also a gamble – if your business doesn’t grow at the rate you predict or if it actually reduces, and you’ve just spent significant amounts of capital expenditure (capex) that relies on an increased cash flow, there’s a danger that it could take your business down. A grim fact is that more businesses go under on the way out of a recession than fail on the way in.

So, if there’s something that enables you to grow without having to spend any capex, and that allows you to scale up as well as down, with no tie-ins, then your FD should be very happy.

Flexibility to suit you

Cloud enables you to grow your business and it’s capex free. It also allows you to scale down without loss. You don’t need to worry about having any equipment sitting around unused as you only pay for what you use.

CRM was one of the first applications to be successfully ported to the cloud. Now there's a long list of other applications that have been successfully adopted as cloud-based services, from accounting packages, servers via Amazon’s EC2 Elastic Compute Cloud, ERP packages, databases services such as Amazon’s S3 Simple Storage Service, and backups, email and ecommerce and general applications.

The most important point about cloud is that it’s an operational cost (opex) not a capex cost.

If you then find that you only need 25 people to have access – you only pay for 25. Because you’re paying monthly and per user, you’ll also know exactly how much your overheads are. Plus there’s no having to calculate what the upgrade costs to say, version 3.0 will be in 12-months time.

This means it’s easy to add costs into a spreadsheet and it makes working out the cost of any process very simple. You can do ‘what if’ type analyses easily as the costs are simple to calculate. It also helps you to calculate some of the more complicated ‘what ifs’ on multiple processes. Most businesses are trying to save costs but it’s hard to calculate the cost of, for example, bringing a product to market when you have costs that are based on capex. Opex costs make things far simpler.

Start right

Let’s think about the time of getting started. With a conventional application, such as an email package, it’s never just a case of installing the application – there’s always much more involved. The server needs to be specified, bought, built and provisioned, which can take weeks, especially if you’re trying to second guess things like exactly how much disk space you’ll need now and in the future. It then needs to be connected and installed and all the PCs and laptops accessing that server need to have their email systems set up. With a cloud-based email system, you can switch it on in seconds, it takes mere hours to create the logins and user data and in just a few hours it can be up and running.

The time to setup a cloud site doesn’t really vary, so if you’re thinking of setting up any other service such as ERP, and accounts packages and so on, it’ll be just as quick. If you’re looking at trialling a new application, an ecommerce platform, or a mobile website, or to create a database for customer details you’ll be able to set a system up in hours.

Hassle-free maintenance

But the benefits don’t just end there. In our email example, a major part of building the email server were the costs and time involved in deciding the specification of the server and the accompanying disk systems. With cloud you don’t need to worry about this either, now or in the future. All of these problems are passed to the cloud business. They deal with the issue of whether the server is going to be fast enough to cope with all the users, and they have to put up with the problem of hundreds of users sending thousands of videos via email. They also deal with all of the backup problems.

Maintenance costs are another area where cloud really comes into its own. When you grow fast it’s all too easy to rack up huge additional overheads, and each additional server you add means there’s yet another opportunity for something to go wrong. Because the cloud vendors are dealing with customers all over the world, there are always people there 24/7 to ensure that the systems are up and running at all times. So if your email server goes down at 4pm on a Sunday afternoon, it won’t be you who gets called in to fix it, and there’s no dreaded £180-an-hour call-out fees to get your server fixed, or £500-a-month server maintenance contracts to maintain.

In most cloud businesses there are people who are employed exclusively to look at security day in, day out, and who are qualified to the highest standard in security.

Security

Security is one of the areas that cloud is often criticised for. By moving an application out of your business and beyond the firewall it’s assumed that you are automatically reducing your businesses security, and opening up your business to problems.

The systems are usually protected by firewalls and security systems that are state-of-the-art, and that could only be afforded by the largest enterprise. Additionally, the servers are normally housed in buildings with high-levels of physical security. On top of this, your access to the sites is via SSL – some such as Amazon’s EC2 will do VPN and restrict the IP addressees that are allowed to log on to the system – so the data is encrypted as it passes over the Internet as well as in the cloud premises.

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