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Benefits and challenges in deployment of cloud solutions for SMB’s

No technology discussion today would be complete without mentioning the rise of cloud-based computing, especially in the small and medium sized business (SMB) sector. Dubbed Software-as-a-Service (SaaS), the growth in cloud-based business applications is due to an increasing demand for flexibility and predictable costs.

Recently, Forrester forecasted that the SaaS market, by 2014, is expected to grow to $75 billion. SMBs have been the most aggressive segment to
adopt cloud services, becoming the backbone of the SaaS app surge. 

Let us take a quick look at what makes Cloud so attractive for SMBs:

1. Lower Costs and No More Installation Hardship

Expense reduction is a core benefit of cloud-based business applications.  SMBs usually do not have the luxury of a large technology budget that would allow for extensive resources specialization, and rarely do they have a budget for a robust IT staff.  Traditional on-premise software applications carry with
them installation requirements, an initial license fee, recurring fees for support and maintenance, and potential disruptions associated with upgrading
software to newer versions.

In contrast, Cloud customers usually pay a monthly fee to license business apps, which are hosted on the app provider’s server and accessed via the web. Zero up-front IT infrastructure or technology investments and the recurring costs are predictable. Cloud providers the potential to drive down the total cost of
(software) ownership (TCO) and eliminates the capital expenditures in this area.

2. Flexibility and Easy Deployment

An on-premise implementation can be a costly and time-consuming proposition. In addition to the investment in technology infrastructure to run the  application, you must devote resources to installing and customizing the application. Consulting fees can further inflate costs.

Most SaaS instances can be provisioned in minutes and quickly configured with branding, process flows, additional fields, reports and other settings. A
highly configurable product offers a great deal of flexibility without the time and expense of software redesign and coding.
SaaS apps require no additional server or hardware investments, they are very scalable, and they do not require specialized IT staff.

3. Ease of Management and Standardized Solutions

The absence of software installation or infrastructure requirements results in a lesser burden on a SMB and its personnel. Employees do not have to worry about newer versions of the software to install or backups. The app providers manage this part of the equation on their servers.  Cloud-based apps are always up-to-date, so both new and existing employees will have the same version of the application.

4. Less IT Resources Needed

Emerging businesses usually operate with rather lean IT resources.  Cloud-based business applications mitigate this personnel issue to a very large
extent.  As SMBs constantly look for ways to operationalize their approach and reduce unnecessary spending, SaaS apps present an attractive model for
infrastructure and software delivery.

5. Comprehensive Support
Many SaaS vendors provide tiered pricing for different levels of support and service agreements. This way, you can choose the best package, without paying for more or receiving less than you need. Unlike a traditional software license, the SaaS model includes comprehensive support in the subscription fee. This also includes product maintenance and upgrades, so there are no hidden costs or additional fees, nor do you have to worry about hardware maintenance or failures.

6. High Security
When you move important data offsite to a service provider, you need assurance that the system is secure. SaaS vendors house their applications in world-class data centers, with state-of-the-art power, ventilation and security features. They also employ encryption and the latest in security protocols to ensure the safety and integrity of your data.

Challenges

For cloud-based services, network availability is critical. Additionally network security and reliability are among the biggest concerns for businesses thinking about adopting cloud services.

Conclusion

Cloud help SMBs focus more on running their businesses and less on managing their technology. Cloud computing eliminates the need for individual companies to buy, deploy and maintain IT. The adoption of cloud computing has brought renewed focus to the software as a service (SaaS) application delivery model. Some small and medium businesses (SMBs) see SaaS as an equalizer that gives them the same application functionality as larger
competitors, without incurring the massive investments in technology and resources. 
The SaaS app market is poised for explosive growth and the core impetus behind this surge is the SMB sector. 

Big Players like SAP already have complete ERP suite offering, targeting the SME Business.  SAP Business ByDesign is ideally suited for SMEs and subsidiaries of large corporations. It is a complete, integrated suite that can run your whole enterprise – financials, human resources, sales, procurement, customer service, and supply chain. It enables to increase efficiency across your organization by enabling end-to-end processes, gain timely insights through integrated analytics and reporting and access business functionality and analytics anytime, anywhere with a broad range of mobile devices with highly secure data centers that are managed, monitored, and maintained by SAP experts.

You’ll likely find that SaaS has a lot of upsides and very few downsides. For the small business that wants to grow and stay competitive, SaaS is a smart investment.

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1 Comment

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  1. Andy Silvey

    Hi Deepak,

    how does the SMB move to the cloud ? How do they transition their IT to the cloud ? What elements of their IT do they move first, and how to they manage it ?

    We need to see more blogs giving guidance, examples of strategies and real life insights to these questions.

    These are the questions the SMB’s need to answer before they can move to the cloud.

    I have offered one strategy here, and would like to see more contributions in this area.

    Best regards,

    Andy.

    (0) 

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