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When clouds lead to storms: How SMEs can avoid the pitfalls

Despite all the hype surrounding cloud, it’s clear that small-to-medium businesses are struggling to extract the true benefits cloud has long promised to deliver.

Cloud computing has promised  significant advantages due to low start-up costs and quick delivery of computing resources, as well as its pay-as-you-go cost structure. It also promises ease of management, scalability of systems, and device and location independence, enabling companies to accelerate innovation in response to evolving market demands and trends.

However, while large enterprises can easily realise the full benefits of cloud with tier one private and public cloud providers offering tools and smarts to help manage cloud system performance, for SMEs it is a different story. Network latency, cost blowouts and slow application run-times are leading many SMEs to experience pain not profits.

While cloud can deliver the same benefits to SMEs as it does to larger enterprises, these organisations need to be aware of the pitfalls of each cloud solution as much as the benefits before diving head first into to a new way of doing business.

Public cloud

Platforms such as Amazon, Azure and Google are very sophisticated, designed by some of the best engineers and architects in information technology and communications. For this reason, the allure of going with a “name” provider such as these is understandably strong for SMEs.

But lost in the hype and the hasty abandon with which SMEs are jumping on board with a major provider is the fact that a primary contributor to cloud performance is how that cloud connects to the workplace network. Public cloud providers require better than ADSL business lines to connect the network to their cloud platform in order to achieve acceptable network speed, and for many SMEs the underlying infrastructure is simply not in place.

For example, while Office 365 is installed on the desktop, Outlook, OneDrive and SharePoint are in the cloud and each time you need to open, save or review a document it has to download and then upload. This, understandably, leads to increased bandwidth demands, so SMEs need to invest significantly in high-speed lines to reduce latency – which would undo much of the cost benefits moving to the cloud would achieve in the first place.

Private cloud

While it is important to note that private cloud is not immune to the problems experienced with public cloud, the key benefits of private cloud include the provision of shared IT resources across multiple applications and/or locations, which contribute directly to increased productivity and bottom-line cost benefits. However, one of the traps many SMEs could fall into when considering a private cloud is choosing a hosted service rather than a true cloud provider.

Organisations need to be wary of a provider asking for an upfront fee, as this could mean they need your cash to purchase equipment. This could be an indicator that this is simply a hosted service, rather than a true cloud environment. If the provider is not a true cloud service, applications can become more resource-hungry, leading to network latency, slow application processing and productivity dips, all of which will affect the bottom-line and increase costs from the start.

A true cloud provider, however, will ensure all equipment is already in place, enabling scalability without asking for more cash to acquire more hardware. As the business grows, the system will automatically scale without the need for internal network management or intervention.

Additionally, the right private cloud provider should at least be able to deliver the following benefits:

  • No upfront costs, and little, if any, migration costs.
  • Full, unlimited support.
  • Getting a new user up and running will take mere minutes.
  • Improved security as all data is housed in secure data centres.
  • Improved productivity via instant data access.

Hybrid cloud

As the name would suggest, hybrid clouds use a mix of on-premise, private and public cloud services. Moving to a hybrid cloud can expand capacity quickly and cost-effectively, particularly when there is a surge in user demand.

However, creating a hybrid cloud will need the infrastructure in place that enables integration of the on-premise servers and users into the public cloud while still maintaining security and performance.  This often leads to unnecessary network complexity, which can lead to increased costs and latency.

Don’t dive In without due Diligence 

Every business looking to the cloud needs to look at all costs, including set-up and migration fees.  These will vary—sometimes greatly—so it pays to ensure you are comparing apples with apples as part of the initial assessment and due diligence process.

The benefits of cloud can be immense for any business, and the hype has led many SMEs to jump in head first without testing the depths. Many SMEs are suffering productivity losses because their trusting approach to cloud adoption meant common pitfalls were not identified during initial planning stages.

A move to any cloud environment requires a deep assessment of all options beyond the CAPEX versus OPEX argument. While all cloud options provide myriad benefits, the pitfalls of each platform need to be just as understood before taking the plunge.

About the author

Andrew Tucker is chief executive officer of ITonCloud, a Sydney-based software company providing small and medium businesses with practical cloud computing solutions.

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