SMEs and Start-Ups Benefit in the Cloud

There is a striking advantage for the Small and Medium Enterprises (SMEs) to switch to cloud computing. The SMEs usually lag behind when it comes to adopting technology. The high capex associated with establishing sprawling IT departments leaves them ill-equipped. The SMEs especially find data storage as a cumbersome process. Not only this, the upgrades for software applications and security also pose an on-going hurdle of y-o-y increase in cost. The competition-driven market today is forcing SMEs to go for cutting edge technology but at the same time the high costs leave them baffled. But cloud computing can help change all this.

The concept of cloud-computing treats Infrastructure, Software and Platforms as services. It offers them on pay-per-use or on subscription basis and is delivered over the internet. These are more commonly known as IaaS (Infrastructure as a Service), SaaS (Software as a Service) and PaaS (Platform as a Service). This not only makes it convenient for SMEs to adopt new technologies and methods of IT, it also reduces costs drastically. It helps to save rent on the floor space and payment for electricity – it is as rational as that! Let’s take an example. If I need a proper IT department, then maybe I need approximately 200 sqft of floor space. The rentals for this at the rate of Rs. 1000/- per month makes an outflow of Rs. 200000/-, which is a significant outflow for a small business. As a novel concept, cloud computing reduces the costs for its customers and allocates resources more optimally over the internet.

On an average a company spends about two-thirds of its IT budget for maintaining their IT infrastructure. If the infrastructure and the applications are moved to the cloud and used as-and-when-needed, the capex for the SMEs becomes more reasonable. The residual funds can then be channelized for focusing on core competencies. Cloud computing has evolved to be what I call analogous for outsourcing the key mundane (but important) IT needs of an organization. It makes a lot of business sense to be lean and outsource any of the support functions like IT, especially if it is available at a click of a button. Moreover it brings a faster turnaround for the investments made.

From an entrepreneur’s point of view this situation as dual prospects – it overlays an IT ecosystem for you to start with lesser headache of increased cost for IT and also opens up options to provide cloud computing services more innovatively. India’s cloud computing is expected to grow to $1 billion in the next five years. Still, there are lot of security concerns about data for switching over to the cloud. Yet another way to look at it is as an entrepreneurial opportunity for those who know the technicalities of fixing software and data security!

Mridula VelagapudiAbout Mridula: Mridula is a freelance writer. She writes on Entrepreneurship and has worked for a start-up in the past. To know more check out her profile at LinkedIn/Mridula Velagapudi

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.