cloud-computing-reduces-business-costs|Photo Courtesy ofDepositphotos.com years ago, small business CEO Gary Peterson paid $15,000 for a high-performance server for his business, and spent an additional $400 per month to host the server at a secure data center. Today, however, Peterson’s server gathers dust while he takes advantage of the cost savings and scalability offered by the latest cloud technologies and services.

Thanks to the cloud, his company now “has the same infrastructure, server capacity and overall data security as companies 1,000 times our size,” Peterson writes in an article on Even better, his company has all of that for about the same price as that obsolete server.

While that sounds great, what exactly does cloud computing mean for a small business?

Generally speaking, the cloud offers low-cost access to IT services and infrastructure that would otherwise be well beyond the reach of a small business. Small businesses access these services by logging in over the Internet.

Cloud services include software as a service (SaaS), in which users pay a lower subscription cost instead of buying software outright. The cloud also provides access to IT infrastructure such as data storage and automatic backup, tools that are relatively inexpensive or, particularly in the case of email, often free.

One of the main attractions of cloud computing for small businesses is cost savings, particularly the lower upfront cost for high-performance computing services. A related advantage, as the article notes, is the scalability the cloud offers. As areas of your business grow or contract, many cloud services can automatically match that change so that you only pay for what you need, when you need it.

For an easy example of scalability, think about how your company stores its data. If you archive your data on a hard drive or NAS device, as your data accumulates over time, you’ll need to keep spending money on larger and larger storage devices to store all your data. This method is very inefficient because you’re either buying a larger storage device and not using all the space or you’re deleting information you need to keep it all on one device. Cloud-based storage, by contrast, can scale automatically, increasing (or decreasing) to match your current needs.

In the end, many small businesses are finding that the cloud combines increased computing firepower at a low cost, with fewer maintenance headaches, and automatic scalability that increases business efficiency.

What advantages has your business gained by implementing cloud services and infrastructure? Share your thoughts in the comments section below!

Source:, March 2013