Cloud computing and why it matters to me?BY DAVID LOKE
According to the Asia-Pacific Economic Co-operation (APEC) forum, 95% of businesses in the Asia-Pacific region are SMBs. The percentage varies by country.
The Asian Development Bank (ADB) estimates that 40% of businesses in China are SMBs whilst in India 80% of the country’s industrial enterprises are SMBs.
In Taiwan, SMBs account for 98% of enterprises according to its Ministry of Economic Affairs. In Hong Kong, SMBs account for 98% of businesses (excluding civil service positions), according to the government’s Trade and Industry Department.
The persistent economic uncertainties in Europe and the US, two traditional export markets for many businesses (regardless of size) in Asia means that many SMBs are still in crisis mode and are continuing to focus on cash-flow protection and strategic reassessment as a way to stay afloat and stave off competition.1
Many SMBs live in fear of failure operating on razor thin margins particularly when the business environment is bad. Many are acutely aware that survival depends on getting right a few fundamental aspects of their operations. With cash flow under a constant review, SMBs lament the difficulty of competing against larger enterprises because they lack the resources, including access to appropriate technology.
Cloud computing may well represent a leveling force for SMBs. Market research firm, AMI-Partners estimate that SMBs will spend US$16.5 billion in cloud computing solutions as these companies try to leverage cloud technologies as a major enabler for their future growth and innovation strategy. With over 40% of the world’s SMBs in Asia, this economically growing region is becoming a hotbed for cloud computing.
Profit from the cloud
To support findings such as the one AMI-Partners released, Parallels, the hosting and Cloud services enablement leader, recently shared the key findings of its Asia-Pacific SMB Cloud Insights™.
The report illustrated how service providers in Australia, China, India and Japan can profit by delivering cloud services to SMBs. Parallels has determined that the market opportunity to serve SMBs in the developed Asian markets such as Australia and Japan remains vibrant, while developing countries such as China and India are poised for explosive Cloud services growth as they continue to build out their Internet infrastructure.
Thus, it is not surprising that we’re seeing a paradigm shift in the way companies acquire and consume technology and cloud computing allows SMBs to access technology which was once limited to medium and large enterprises with the resources to spend. What is innovative about cloud computing is the pay-for-use approach taken to access the technology. Whether it is to host the business’ ecommerce website or run the CRM application, you only pay for what you consume – much like electricity or water. No more, no less.
What’s the catch?
Cloud service providers are quick to admit that it is the sharing of resources that allows them to leverage economies of scale. But while you share these cloud facilities, your data is still very much your own. In fact, cloud service providers take great pains to ensure that your data is kept within secure containers that only you and your authorized users can access.
Other than that, it’s business as usual.
What’s in it for me?
There are several obvious benefits for SMBs in particular the ability to access enterprise IT capabilities without paying enterprise IT prices
Lower cost of ownership and pay as you go: Imagine not having to invest in computer servers and software. You don’t have to worry about obsolete equipment and software, or about having to make regular software updates and security patches.
Many SMBs would find enterprise applications such as CRM beyond their reach. With cloud computing, these applications become very affordable.
Your only investments are the PCs, laptops and networks that you need to connect to the Internet. And of course, you’ll still need the scanners and printers that you normally use.
In a recent survey by Enterprise Management Associates (EMA), six in 10 Cloud computing customers say that they have been able to reduce their IT capital costs. They also reported that Cloud deployments have improved service quality, reduced IT operations costs, and reduced IT management complexity.
Higher productivity: You may not even need an IT team, or your existing team can be freed to focus on higher-value work. That’s because all the routine IT and network management tasks, such as system and software upgrades, backups, security management, database administration, and others, are now performed by your Cloud service provider.
Scalability: Because cloud computing is often based on a utility model, you can scale your computing usage as your business needs grow. I have already mentioned how, during busy periods, you tend to need more server resources. With utility pricing, you only pay for what you use so you won’t need servers that remain idle during slower periods.
1 Towards the Recovery, Challenges and Opportunities Facing Asia’s SMBs, Economist Intelligence Unit, 2010
David Loke, Executive Director, ReadySpace