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The Advantages of Cloud Computing Services

24 Oct 2016 by Brigitte Yuille

This article originally appeared on October 8, 2014, and has been revised to bring our readers the most up-to-date technology information.

What are cloud services, and why are they being embraced by companies of all sizes? The technical definition is that cloud services comprise any type of internet-powered service. However, the most commonly used type is Software as a Service (SaaS).

A variety of different types of cloud services have been shown to reduce cost while simultaneously improving efficiency, explains CIO. This works to the benefit of Small and Medium Businesses (SMBs), and enables them to streamline their business model.

"The findings were pretty telling in terms of the adoption of cloud computing and the benefits of cloud computing," explains John Engates, CTO of Rackspace Hosting, in an interview with CIO. "The bottom line is cloud saves companies money and increases their profits."

Reasons companies move to the cloud graphic

Cloud computing services are managed online, and serve to offer a centralized, cloud-hosted location to encrypt and store information. This enables SMBs to immediately reduce costs, because the cloud eradicates the need to purchase expensive hardware such as: Hard drives, memory upgrades and backup devices. Furthermore, the cloud helps to reduce the reliance on physical on-premise hardware, as well as lessens the cost of maintenance, repairs and other technological investments. A cloud computing service can also rid business operations of complexities with automation, while increasing productivity and agility.

Cloud computing provides SMBs with the opportunity to innovate. Many small businesses operate without an IT department, and may outsource their storage and data. The cloud enables midsize companies to add or test new applications or processes without having to take on the costs of hosting an in-house IT infrastructure. In addition, cloud computing adapts to a business’ growth model. SMBs can utilize it to create more accessible workspaces that their staff, clients and suppliers can access remotely from connected devices. Doing so leverages the skills of any back office team. Since SMBs can acquire cloud computing services through third-party providers at a low and often predictable cost, it makes good sense for their bottom line.

Benefits of moving to the cloud graphic

Choosing the right types of cloud computing services

Cloud market spending for SMBs is predicted to increase by around 50% globally from 2015-2018 according to the chart below. This is because public clouds are more convenient for a small business model, namely because they are hosted, managed and maintained by a third-party service.

Size of SMB cloud market in U.S. 2013 - 2018 graphic

Since a private cloud allows for the sharing of resources within a more trusted environment, it benefits SMBs to have internal IT resources because it helps better secure their sensitive data. This type of private cloud service requires a high-level of expertise because it is deployed on the company’s network by the internal IT staff. Therefore, it is more expensive than public cloud in the short-term to integrate.

Private cloud services, which can act as an extension of an on-premise data center, are generally used by larger companies, but vendors are recognizing the demand for this platform among SMBs. Some vendors that are already offering solutions include: Amazon Web Services, Rackspace and VMware. According to the IDC, two out of ten midsize firms plan to add midsize cloud solutions this year to meet growing demand.

SMBs can also take advantage of hybrid cloud services. These provide a flexible solution for SMBs because they combine private and public cloud platforms. SMBs benefit from the cost-effectiveness of the public cloud and bypass security issues with the private cloud. An increasing number of SMBs are calling for cloud customization, which means more cloud service providers are likely to offer a hybrid cloud solutions in the near future. Current vendors include: McAfee and Websense.

SMBs concerned about security should look for third-party providers who are committed to their security measures. A good example is Microsoft’s Office 365, which has the “Trust Center.” Integration and interoperability has challenged some SMBs. Therefore, it’s important to find vendors who offer additional training and support.

As cloud reliance expands, expect to see these services become more widely used in the future. With a variety of cloud services companies striving to meet business demand, newer solutions are being introduced each quarter.

Insight partners with the leading cloud computing companies to deliver end-to-end solutions for SMBs. Find out how we can help you migrate to the cloud today. Talk to a specialist today by calling: 1-800-INSIGHT.