Predicted Impact of Cloud Computing Right on the Money (Opinion)

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According to a recent CDW survey of 1,200 small-and medium-sized businesses, 84 percent of users of cloud-based applications and services have realized an average annual cost savings of 21 percent.

It has been three years since my first column featuring cloud computing was published in the Northwest Arkansas Business Journal. At that time, the Gartner Group predicted cloud computing would have a $150 billion market opportunity by 2013. Today’s projections for 2020 range between a market size of $240 billion to $300 billion.

Within the SMB space, cloud adoption is increasing. A recent Microsoft survey of more than 3,000 businesses found that 30 percent of SMBs use at least three cloud-based services on a regular basis. Within two or three years, that number will increase to 48 percent.

The predicted reasons for cloud computing adoption from three years ago are proving to be real. Companies are realizing real cash flow and overall cost savings from cloud-based computing.

One Northwest Arkansas company replaced its in-house server-based business software with cloud-based software, eliminated multiple servers and avoided hiring an additional technology person. Business operations and reporting were vastly improved.

Companies have upgraded their Microsoft Exchange email systems with cloud-based Hosted Microsoft Exchange and avoided capital cost of Exchange Version 10 software along with the software and implementation cost of new server and back-up systems required.

Making use of cloud computing can eliminate the need for in-house servers, the associated software cost, the annual maintenance charges and the cost of a person to “take care of” these servers. Cloud adoption can also lead to improved innovation capability.

According to the Microsoft survey, 67 percent of SMBs with more than 50 employees believe their use of technology will determine whether their business will survive.

Many smaller businesses also have sophisticated supply chain planning and execution processes needs. EDI capabilities are often required. Continuous availability of real-time information regarding sales orders, purchase orders, shipments in transit and product availability can be the difference between success and failure.

By adopting cloud-based computing, SMBs are in a better position for success. Modern cloud-based ERP software has extensive capabilities far beyond what is available in QuickBooks, Peachtree or other locally hosted systems. The smallest of businesses can have technology capabilities similar to those of Fortune 1000 companies.

Many SMBs find the notion of moving to cloud computing a bit daunting. Even though cloud security today is likely much more robust than their current security, security is most often cited as the chief concern. With most technology people making their living taking care of technology, the notion of outsourcing technology operations to the cloud is not one they will likely recommend.

Effectively moving an organization to cloud-based computing requires a comprehensive plan. SMBs typically require someone familiar with cloud computing to help create a roadmap specific to their situation. Steps and urgency vary based on existing infrastructure age, along with business technology needs and existing issues.

Solid execution of an effective plan to make use of cloud computing will minimize the risk of being at a cost and/or competitive disadvantage in the future due to technology. Future spending can be directed to the best business value rather than maintenance of an inefficient status quo.

Steven Hankins is CEO and co-founder of, a technology company providing advisory and management services for small to medium-sized businesses. He can be reached at [email protected].