Is the Small & Medium Business Market (SMB) ready to embrace the Cloud?


Microsoft thinks the SMB is ready to embrace the cloud and is betting on it. Microsoft has recently adjusted their delivery channel to allow their smaller solution providers to easily sell and implement their cloud offering; Azure. These same providers have succeeded with Office 365 most recently and the Windows Operating Systems, (OS) and Office applications have been a mainstay of the SMB network for years. Cloud solutions have made sense for the Enterprise and larger business for some time. Their larger budgets and greater internal expertise helped facilitate adoption. However, the small business market has not widely participated, except for some low entry cost solutions like Microsoft Office 365 (O365).

Let’s identify what the different type of business cloud services; defined in some part by the amount of management the cloud provider supplies.

  1. Software as a Service– (SaaS)

In this framework everything is managed by the cloud provider. The cloud components that are provided include; networking, servers, storage, virtualization software (hypervisor), server operating system (OS) and the application itself. A good example of this is Microsoft Office 365 (O365) that provides its subscriber hosted email, one-drive storage and all the Office applications. Office applications like Word and Excel were licensed and purchased before O365.

  1. Platform as a Service– (PaaS)

In this framework the cloud provider manages less of the solution, the customer manages their own application and the data that supports it. The cloud provider still provides the networking, servers, storage, hypervisor and the OS. A good example of this is a test and development environment for the customer. The customer may want to test a new software or application in a “live” environment before going online with it.

  1. Infrastructure as a Service– (IaaS)

In this framework the customer manages most of the solution, renting the hardware infrastructure from the cloud provider instead of buying and supporting the hardware themselves. Typically, the cloud provider plays a more passive role here which, in most cases, is what they want. The cloud provider will supply the networking, servers, storage and hypervisor while the customer provides the OS, application and its data. Since the customer provides the OS they can create their own servers, called virtual machines or VM’s, without any interaction from the cloud provider in a matter of minutes. The “agility” the IT department can provide to the business is one of the greatest technical benefits of the cloud. When most IT professionals speak of the cloud they are talking about IaaS.

What barriers are dropping for SMB cloud growth?

  1. Price- Price is usually one of the primary considerations of purchases for SMB. Cloud, like other technology products that have become a commodity, is starting to reduce in price quickly. As we have observed the business cloud market in the past 5 years we have seen pricing drop between 30 and 50 percent. Now as Microsoft becomes more aggressive in the SMB market for cloud we see that trend continuing if not accelerating.
  2. In-house expertise One of the barriers that has held back SMB from embracing the cloud was the level of internal expertise required in an IaaS application. This type of expertise is becoming more common as cloud matures. Additionally, advancements in software have made it easier to manage. Once a technical mystery to many, now cloud is becoming a commodity and more manageable by many.
  3. Proprietary applications and regulatory challenges- The cloud has become more application “agnostic” as it has matured. Today’s cloud providers are accepting all Operating Systems and their applications. There are very few technical barriers to the cloud. Even more important, most cloud providers will provide complete industry and regulatory compliance. This has come as providers have built more compliant cloud infrastructure. Prospective cloud customers have also become more educated as to how compliance is achieved in the cloud. Cloud providers need to consider both United States as well as many international standards. U.S. government regulations that have begun to embrace the cloud are: HIPAA/HITECH, (healthcare) FERPA (education) and regulations for the departments of treasury, defense, state and justice.

What are the predominate applications for SMB cloud?

As the walls for SMB entrance for cloud services are coming down most companies decide to start slowly, moving just one or two workloads to the cloud at first. They almost always start with non-production applications. Below are the three most popular applications we see today:

  1. Test and Development- Organizations typically want to give their new business applications, or even significant upgrades, a real-life test before going live to production. To enable this, a cloud based “test & dev” server is ideal. Its fast, and inexpensive compared to purchasing new hardware for a lab environment.
  2. Backup and Disaster Recovery-(DR) Backup and DR are well suited for cloud. Virtualization, and its agility, seem to be designed for Backup and DR. The best results and fastest recovery time objectives (RTO) and recovery point objectives (RPO) occur when the entire environment is virtualized.
  3. Integration with the Internet of Things (IOT)- When you look at managing devices and apps that live in the internet, what better way to do it than with a cloud server that also resides there. Devices that measure and report on energy usage, employee productivity or asset location and utilization all have applications well suited to be placed in the cloud for their reporting and analytics.

These applications, and the migration of a company’s full range of internal and commercial applications all assure the continued growth of cloud services for all types and sizes of business.

You can contact me at (513) 227-4131 or so I can determine if twoearsonemouth would be the right IT partner for your organization. We can migrate your business applications to Office 365 or Azure.

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