How cloud computing can help small companies compete with industry giants
- Leveraging the flexibility and scalability of cloud solutions to level the playing field
- Benefits of cloud services include scalability, reduced costs, real-time connectivity and easy software and app interaction
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From public to private and hybrid, cloud technology and its adoption have grown exponentially over the past decade and along with that comes a slew of technical jargon that promises to confuse even the industry professionals.
As with a lot of technology products, they achieve their fullest potential only in the hands of the right people. So today, the purpose is to simplify cloud technology and explore how small businesses can capitalise on it to achieve success.
Despite the seemingly astronomical figure, the cloud can’t be more abstract. It does not exactly present itself in the physical sense, but rather, is defined as a set of services or features that are hosted in the digital space, carrying out functions such as data storage and real-time collaboration.
Peeling back the apparent complexities of cloud, here is what you need to know about cloud and how it can benefit small businesses and drive up competitiveness.
What is cloud computing?
Cloud services in the market – with names such as such as SaaS, PaaS and IaaS – can be somewhat confusing. To simplify things, imagine they are basically three different layers of cloud and you can access the cloud computing system through software, infrastructure or platforms.
The three ‘as-a-service’ models ...
1. Software-as-a-Service (SaaS): When accessing the software, ie SaaS, you are simply subscribing to a service that is delivered via the internet.
This form of cloud is the most widely consumed version and includes streaming services (Netflix, Spotify), business collaboration tools (Google Docs, Office365) and file management (iCloud, Dropbox). For small businesses, this model is highly scalable and allows them to allocate resources accordingly or proportionately as the business grows.
2. Infrastructure-as-a-Service (IaaS): Infrastructure-as-a-Service (IaaS) will be more relevant to businesses that need to consume more computing power and require access to computing, storage and networking capabilities.
It can be likened to renting physical hardware for data storage or server hosting without upfront investment to build your own data centre. A common IaaS example would be Amazon Web Services. It is similarly highly scalable.
3. Platform-as-a-Service (PaaS): Platform-as-a-Service (PaaS) enables businesses to develop apps without having to build complex infrastructure. It delivers the back-end of these programmes so businesses won’t need to engage technical professionals to do so and, instead, can focus on the user experience and design.
PaaS also enables the creation and delivery of application programming interfaces (APIs), which lets different software “talk” and work with each other – giving businesses the benefit of being able to integrate different apps and software.
It is through APIs that accounting software such as Xero is able to integrate with banks and third-party apps to facilitate the flow of data in real-time.
Range of benefits for SMEs
Reduced costs: One reason is that cloud enables the storage and analysis of massive amounts of data without requiring a business to buy expensive on-premise servers to store all the information. When small businesses use software via the cloud, they can readily store and manage data on it, as well as share analytics reports with relevant users.
Seamless real-time connectivity: Using cloud tools can provide a business owner with real-time access into their company’s data. For instance, if your accountant or bookkeeper adds an entry into your books using a cloud-based accounting software, you can see it immediately, any time, anywhere and on any device, making it convenient for business owners on the move to still retain control and oversight of their business.
Time saving: Cloud allows the automation of a large chunk of business processes that are manual or repetitive, such as e-invoicing, payment reminders and bank reconciliation. This form of automation ultimately saves business owners both time and money.
Scalability and flexibility: Cloud solutions are scalable, meaning users pay only for what they need. A business may subscribe to a SaaS solution based on the features, the number of users and the amount of data that will be stored. They can choose to increase or decrease these capabilities as their business evolves. For small businesses where cash flow management is essential to success, prudent spending can go a long way.
Access to latest technology innovations: Being on the cloud allows the platform to be constantly updated, ensuring that users are always accessing the latest technology, such as data analytics, automation, machine learning and artificial intelligence (AI).
Time for SMEs to get smarter
One might say cloud-based tools are only for multinational corporations and large enterprises. But the forces of disruption play no favourites.
The neighbourhood noodle shop and the regional food and beverage franchise both need to contend with changing customer expectations, new payment options, global and local buyers, online reviews, rising costs and the constant battle for both growth and survival.
With their vulnerability to cash flow ebbs and economic volatility, not to mention better-funded competitors, SMEs need to get smarter about making their processes more efficient and reducing time spent on routine tasks to focus on growth.
They need to understand where they can squeeze out more savings, as well as useful insights, by leveraging the latest technology to put them on an even playing field with larger competitors.
Ultimately, all these – and more – can be found in the cloud.
Learn more on the Xero website