Feb 15 2016

Why Business As a Service Makes Sense for Small Businesses

Cloud-based services let small businesses manage capital expenditures, scale capacity and streamline the way employees work online.

In the Internet age, opportunities are more numerous but fleeting — and small businesses restrained by tight capital budgets risk losing market opportunities to distant competition. The rapid pace of change in IT and communications only expands the challenge, as small operations focused tightly on their core mission struggle to make cost-effective decisions about IT resources.

The IT challenges facing these businesses are deep and enduring. Many businesses are just emerging from a painful half-decade of cost-cutting and have little interest in making large capital expenditures on IT infrastructure. Savvy small business owners understand — and are rightly wary of — the complexity and cost that come with on-premises IT build-outs.

A 2013 survey by the National Small Business Association found that 40 percent of small business owners say they are personally responsible for their own in-house IT systems and technical support. But in-house servers and software can be expensive to buy and hard to maintain, and can rob a business of both its focus and profitability.

These challenges are compounded by the need for rich integration, broad flexibility and ability to scale. Successful small businesses don’t stay small for long, but a rigid IT infrastructure will almost certainly restrain growth and produce spiraling costs.

Rethink the Business

IT is a critical enabler of the modern business, and the way companies address that enabler can define their success or failure. For instance, cloud-based office software can enable innovative approaches to the workplace. The nature of cloud applications — always on, available anywhere — means that teams no longer need to be tethered to a fixed office space to be productive. Telecommuting becomes possible when workers rely on services such as Microsoft Office 365 for productivity applications, Dropbox or Box for file-sharing and access, and Lifesize and ShoreTel Sky for voice and video communications.

A cloud-based environment lends itself to organizational innovation. Businesses can assemble hybrid teams of onsite and offsite employees, contractors and external business partners. A company that once recruited talent from a local metropolitan area can now draw workers from virtually anywhere. And projects that require spot support can engage trusted contractors, working with native tools and systems, to speed work and improve results.

The Ex Factor: CAPEX Versus OPEX

Businesses are rethinking the way they spend money on operational infrastructure. Increasingly, companies seek ways to manage unpredictable capital expenditures (CAPEX) in favor of scheduled operational expenditures (OPEX). Cloud-based Business Delivered as a Service does just that. Moving to an OPEX-centric model for IT infrastructure confers numerous benefits. Among them:

• Predictable, month-to-month payments over the life of the service

• Incremental cost increases or decreases that scale in direct proportion to business activity

• A reduction in one-time capital expenditures that complicate forecasting and produce turbulence at the bottom line

• Simplified accounting

The appeal of pay-as-you-go infrastructure will vary depending on scale and utilization. Larger organizations may find that on-premises IT systems can produce greater value than outsourced infrastructure.

Dial to Scale

Cloud-based services let businesses break out of the constraints of traditional buy-and-build IT infrastructures, which consume capital at the very moment those investments are needed to fuel growth. Cloud solutions simplify IT, adding scale and infrastructure where it’s needed, when it’s needed, at manageable cost.

Case in point: MyWebGrocer. A fast-growing provider of web, e-commerce and digital marketing services to brick-and-mortar grocery stores, the company relies on cloud software to spin up operations for new services and ventures, and to scale capacity for its growing ranks of domestic and off-shore developers. If a project or venture takes hold, MyWebGrocer generally folds the activity into its robust data center operation. If it fails, the company simply spins down the rented infrastructure — with no servers to reprovision or excess software licenses to pay for.

The ability to dial resources up or down is a core benefit of cloud-based services, and is attractive not simply for seasonal demand — such as a tax consulting business or almost any consumer retailer around the holidays — but for managing structural changes in the business as well.

Work the Way Workers Want

From an end-user perspective, cloud-based office solutions make more sense every day. Ubiquitous, consumer-focused services such as Google Mail and Dropbox are conditioning workers to the asynchronous, browser-based interface of cloud applications.

Users today expect email, files and applications to be available anywhere they log in.

The benefits of cloud-based office software for end users are many.

Among them:

• Ability to access applications and files anywhere with Internet access — in the office, at home or on the road

• A single user experience for every client (for example, Outlook 365 looks the same on an office PC as it does on a home notebook — and users don’t have to worry about application version mismatches between office and secondary PCs)

• Ready support for multiple form factors, from desktop PCs to tablets and smartphones

• Seamless and timely software upgrades that occur in the background, with virtually no end-user disruption

For more information on pay-as-you-go infrastructure, read the white paper “How Business Delivered As a Service Helps Small Businesses.”