cloud computing for smbs

www.SilverTreeSystems.com

Cloud Computing for SMBs Jonathan Sapir, CEO, SilverTree Systems

"If something is a good idea, it's going to happen. And so, you can fight

it, or you can do it."

- Jeff Bezos, Amazon CEO

A major shift in the

way companies

obtain software

and computing

capacity is well

under way. It

promises to offer

small-midsized

organizations significant cost savings and

exciting new opportunities. Instead of

making do with a small, under-resourced IT

staff trying to emulate the capabilities of IT

outfits with multimillion-dollar budgets,

smaller companies can now access

enterprise-class technology with low up-

front costs and easy scalability.

WHAT IS CLOUD COMPUTING?

With "cloud computing", the general term

for this new wave, companies can run every

information system they rely on without

owning any tech equipment. The ultimate

goal of cloud computing for a SMB is to

become a serverless enterprise.

Cloud computing lets businesses rent access

to applications and IT infrastructure that

reside on the Internet, pay for them on a

subscription or per-use basis and provide

employees with access to information from

anywhere at any time with nothing more

than a connected device. No more hassling

with software updates or growing storage

requirements. No more expanding data

centers to make room for additional racks of

servers to support a growing business.

Maintenance, scalability, performance,

backup, disaster recovery – all gone.

With cloud computing, you outsource the

functions that don’t make you special to

someone who specializes in them.

PLUGGING INTO THE GRID

Cloud computing is a truly disruptive

technology in the way that it delivers

superior capability at a lower cost.

Think of it this way - what if you had to

concern yourself with providing the

electricity needed to run your business? If

there was no outlet to plug your lights and

machines into, you would have to go look for

a generator, buy it, implement it, hire

engineers to keep it running, make sure you

have backup, and make plans for any

disaster that might befall such a critical

component of your business.

It used to be this way, in the days before the

electric grid, and being able to produce your

own electricity was a huge competitive

advantage. But once the grid was in place, it

quickly became a major liability. Companies

that moved to the grid significantly reduced

their costs, and they could focus on their

business. In addition, having access to


cheap, unlimited electricity meant they

could afford to make use of electrical

components that before may have been cost

prohibitive.

There is a very strong parallel between this

and IT. In the same way that companies

moved to the electrical grid, so they will

move to the computing grid in the

"cloud". Just like plugging your device into

an outlet to get electrical power, you point

your browser to the appropriate application

in the cloud to get the service you need.

DIFFERENT TYPE OF CLOUDS

There are different flavors of cloud

computing for SMBs:

APPLICATIONS IN THE CLOUD

Almost everyone has already used this form

of cloud computing in the form of Gmail,

Google Apps, Wikipedia, Salesforce, etc. In

these examples, a company hosts a working

application on the internet that many users

sign-up for and use without any concern

about where, how, or by whom the compute

cycles and storage are provided. The service

being sold (or offered in ad-sponsored form)

is a complete end-user application. On the

customer side, it means no upfront

investment in servers or software licensing;

on the provider side, with just one

application to maintain, costs are low

compared to conventional hosting.

PLATFORMS IN THE CLOUD

Application platforms are provided for

developers to write their own applications

and then immediately deploy them. The

developer doesn’t need to worry about

being able to scale up the hardware when

more users are added – the platform takes

care of this and everything else needed to

keep the application running. Force.com

(for professional developers) and Coghead

(for analysts and power users) are examples

of this.

INFRASTRUCTURE IN THE CLOUD

Developers and system administrators

obtain general compute, storage, queuing,

and other resources and run their

applications with the fewest limitations. In

this cloud type, virtually any application and

any configuration that is fit for the internet

can be mapped to this type of service.

Amazon is the prime example of this kind of

cloud platform. In some cases, application

platforms run on this infrastructure (e.g.

Coghead).

WEB SERVICES IN THE CLOUD

Web service providers offer APIs that enable

developers to exploit functionality over the

Internet, rather than delivering full-blown

applications. They range from providers

offering discrete business services -- such as

Strike Iron and Xignite -- to the full range of

APIs offered by Google Maps, ADP payroll

processing, the U.S. Postal Service, etc.

INTEGRATION IN THE CLOUD

Users usually plug into isolated cloud

services individually. This is particularly

inconvenient if you require data or

functionality from more than one service to

complete a single task. But one of the major

advantages of being in the cloud is that most


applications subscribe to the same open

standards, making integration much simpler

than traditional application integration. The

goal of cloud-based integration is to treat

every enterprise as a node in the cloud that

can programmatically be accessed in the

same way. There are companies like Boomi

that are making this easier.

BENEFITS OF CLOUD COMPUTING

SAVE MONEY

It is much less expensive to implement a

cloud-based application than a traditional

on-premises application.

A typical software implementation involves

purchasing and maintaining servers, housing

them securely, and installing and

maintaining the software. This requires the

time and effort of experienced IT personnel.

In the cloud, there is no hardware to

purchase, scale, and maintain, no operating

systems, database servers, or application

servers to install, no consultants and staff to

manage it, and no need for periodic

upgrades.

SAVE TIME

By eliminating many of the typical

implementation tasks associated with

licensed software, deployment time tends to

be much shorter with a cloud application

than a traditional one. The application is

already up and running on the vendor’s

servers so you just have to get your data into

the system.

FREE UP RESOURCES

When you subscribe to a web-hosted

application, you free your organization from

supporting high cost, time-consuming IT

functions that are far away from the core

mission of your organization.

GET THE LATEST INNOVATIONS

With traditional licensed software, you

typically have to wait for the next release to

benefit from the latest innovations. Given

the cost and complexity of moving to a new

version, it may not even be practical to

upgrade each time a new release becomes

available.

With a cloud-based application on the other

hand, you benefit from innovations on an

on-going basis. As soon as a new or

improved feature appears in the application,

you can begin using it.

PAY AS YOU GO

When you subscribe to a cloud-based

application, you pay a monthly or annual

subscription fee. Compared to a traditional

software license, this subscription payment

structure works to your advantage. An on-

going monthly expense is easier to

incorporate into your budget than a large

one-time outlay. You can cancel or change

your subscription at any time without losing

a large initial investment. In many cases,

subscriptions are based on metered usage so

you pay for exactly what you use. Rather

than making a long-term commitment to

one fixed account structure, you can add or

subtract accounts at any time as your

organizational needs shift.


JOIN A SUPPORT COMMUNITY

In the cloud, you are not alone. When you

subscribe to a cloud application, you become

a member of a community that has the

application at the center. This community

can help you when you get stuck, and give

you ideas on how to leverage the software

even more.

GET INCREASINGLY BETTER SOFTWARE

One of the more subtle benefits of cloud

computing comes from the fact that vendors

constantly monitor how their customers are

using the application. Awareness of how

customers in the aggregate are using an

application presents the vendor with a

constant supply of metrics they can use to

improve usability, performance, and

functionality. In addition, when you contact

technical support, you’re likely to experience

faster and better service because support

professionals can see exactly what’s

happening – there are no installation-

specific variables to be considered.

ENJOY BETTER SERVICE DELIVERY

Because of tremendous economies of scale,

cloud-based vendors can provide higher

service levels than the vast majority of

companies can achieve on their own. The

best technologies, policies, and procedures

are used to ensure security at the facilities,

application, and network level; to ensure

maximum uptime and continuous

availability; and to provide a high

performance level.

In addition, the interest of the vendor and

their customers are much better aligned.

With traditional licenses, there is no strong

vested interest from the vendor perspective

to make sure the customer is successful.

Cloud vendors, by contrast, must continue to

justify their ongoing monthly fees. They have

to make sure the customer is happy with it

month after month.

BUILD LONG TAIL APPLICATIONS

Cloud-based development and deployment

platforms make feasible many software

solutions that were previously too costly to

build. Eliminating the need for

infrastructure (both hardware and software)

means the start up, deployment and support

costs for an application are significantly

reduced.

BE ENVIRONMENTALLY FRIENDLIER

Cloud-based computing facilitates higher

use, economies of scale and efficiencies

which leads to more work done per unit of

energy consumed.

MINIMIZE RISK

The risk involved in implementing business

applications is eliminated the need for up-

front capital investment.

SCALE MORE EASILY

Successful businesses are continually

changing and growing: employee growth,

transaction growth, the launching of new

products and services, mergers and

acquisitions, or any number of business

events can dramatically and suddenly alter

business needs. A cloud-based platform will

automatically grow, scale, and adapt with


your changing business – without you even

thinking about it.

SPARK INNOVATION

The ability to get new projects off the

ground quickly is a huge enabler of

innovation. Also, the ability to re-allocate IT

resources means that IT can focus more on

new initiatives instead of maintain the

existing infrastructure.

INTEGRATE SOLUTIONS

Once you are in the cloud, you can do things

that were really difficult to do using

traditional means. Each site becomes a

service that can fit together like cogs in a

machine.

OBJECTIONS

IS MY DATA SECURE?

Security and privacy are concerns whether

you subscribe to cloud service or purchase

software and implement it on in-house

servers. A cloud vendor you can trust offers

you the level of security you need while

saving your organization the expense and

effort required to house, deliver, and back

up an application. It’s very similar to

keeping your money in a bank.

WILL MY APPLICATION BE AVAILABLE?

Cloud applications are not a new, untested

software delivery model. NetSuite and

Salesforce.com have been around for more

than five years and have hundreds of

thousands of subscribers, including large

Global 2000 organizations. Reliable vendors

put safeguards in place to ensure near

constant availability of their applications.

The major player like Amazon have full

hardware redundancy to avoid

consequences from equipment failure,

redundant power supplies to avoid

consequences from a power failure, and

scalable server farms that are able to

immediately meet a sudden increase in

demand.

WILL I LOSE CONTROL OF MY DATA?

When you subscribe to a cloud service, your

application data is stored on the vendor’s

servers rather than on your own servers. If

you’re concerned about losing control over

your data, most vendors will allow you to

easily export my data in a format that you

can re-use if you need to.

HOW TO GET STARTED

For most organizations with an existing IT

infrastructure, moving to the cloud will be a

journey. There are many different ways to

get started:

BUILD A NEW CUSTOM APPLICATION

Instead of building your new application the

traditional way, build it in the cloud using

one of the new cloud platforms.

An example of what you might use is for this

is Coghead. It combines a strong rapid

application development environment with

the ability for tech-savvy end users to tweak

business logic on their own. In addition, it

renders the finished application in Adobe

Flex, a rich and appealing user interface, and

stores all your data on Amazon's Elastic

Compute Cloud (EC2) infrastructure. Finally,


Coghead makes it easy to integrate with

external data sources, including everything

from ERP data to Google Apps.

ABANDON DYING TECHNOLOGY

This is a great opportunity to re-write an

aging application by using technology that is

at the beginning of its lifecycle.

Replacing your old applications will not only

get rid of the servers they run on, but will

also allow you to take advantage of services

on the Web that can dramatically enhance

functionality and productivity. And it need

not take years to develop what you

need. Platforms like Coghead make it much

faster to develop custom applications, and

to even allow non-technical users to tweak

the software as needed by changing

business logic without programmer

intervention.

MIGRATE SPREADSHEET APPLICATIONS

All enterprises have applications that live in

spreadsheets, because a spreadsheet was

the only tool available. There are cloud-

based tools that are much better suited to

applications that have outgrown the

spreadsheet paradigm.

Typical candidates are: spreadsheets that

have grown into multiple tables with a

tangle of forms and formulas; spreadsheets

that are frequently emailed to co-workers or

clients for data collection and synthesis;

spreadsheets that live on a shared drive to

enable multiple parties to access and update

it; spreadsheets that have a version or

revision number; and spreadsheet that have

become part of a core process but no one is

really sure how it works.

ADOPT PRODUCTIVITY TOOLS

There are significant advantages to be

gained by starting to use cloud-based

productivity tools at very little (or no) cost.

An example is Google Apps, which offers a

comprehensive, easy-to-use and affordable

option. You get: online, real-time

collaboration for documents, spreadsheets

and presentations; Google Sites, a shared

space to store information, upload files and

facilitate discussions; an email system

accessible from anywhere and offers

powerful functionality.

MIGRATE SUPPORT APPLICATIONS

There are very powerful and inexpensive

cloud-based online contact management

systems. There are ready-to-go options like

BigContacts or Highrise and easily

customizable ones from companies like

Coghead. More sophisticated packaged

options include Salesforce, and some of the

accounting packages like NetSuite have

sophisticated CRM built-in.

Another application that is relatively easy to

migrate is content management. There are

tools like Squarespace which offer a

complete service for building and managing

your Web site with all the functionality an

SMB is likely to need. A tool like this can

save an organization significant time and

money.

Project management software is one of the

applications that has really benefited from


moving to the cloud by making collaboration

and communication much simpler. There

are numerous options, including tools like

Basecamp and LiquidPlanner.

BUILD SITUATIONAL APPLICATIONS

Sustained competitive advantage will

increasingly depend on enabling self-reliant

employees to create their own software

solutions to meet their business needs.

These solutions are increasingly grouped

under the term “situational applications”

(SAs).

SAs are solutions aimed at solving

immediate business challenges in a cost-

effective way by specifically addressing

the situation at hand.

SAs are often applications that have

generally been inaccessible in the past

because software has been too difficult to

write, too costly to implement, and too

brittle to customize and maintain once

deployed.

Cloud computing has spawned a new wave

of tools that effectively address these

problems. These tools empower business

users closest to the problems being solved

to quickly build full-featured collaborative

business applications online and

immediately deploy those applications to

the appropriate people both inside and

outside their organization.

SAs significantly reduce or even eliminate

the need to hire professional software

developers, purchase or build a new

software application, or throw together a

suboptimal, inefficient and incomplete

solution using tools like Excel and

email. This will lead to new opportunities

for improving efficiency, effectiveness and

innovation.

MIGRATE CORE APPLICATIONS

If you are considering changing your

accounting system, the cloud is the obvious

choice. There is no advantage to be gained

by keeping your accounting on your own

servers and dealing with software upgrades,

backups and disaster recovery plans.

There are several options available. Intuit,

makers of Quickbooks, offers a not so great

but serviceable online version of

Quickbooks. But there are exciting new

alternatives like FreshBooks if your needs

are limited, or Intacct if they're not. And

then there is NetSuite if you are really

growing or your needs are complex, and

need a fully customizable platform.

CONCLUSION

The sooner you get started, the sooner you

will be able to get rid of your IT

infrastructure and start saving money. And

once you get to the cloud and start realizing

all the advantages it affords you, you'll

wonder why it took you so long to make the

decision!

In fact, as cloud computing matures, we'll

see small companies rely on the cloud for

more and more of their technology needs,

gradually eliminating the costs and

complexity of in-house IT infrastructure.

Cloud computing levels the playing field for

SMBs. The cloud makes leading-edge

technology available to everyone.


ABOUT SILVERTREE SYSTEMS, INC.

SilverTree Systems specializes in helping

small-mid size businesses (SMBs) accelerate

their adoption of on-demand software

solutions. Our services include the

following:

Strategy Definition

SilverTree works closely with small-midsize

companies and business units of large

organizations to determine how cloud

computing can radically improve business

processes, help reach new customers, solve

problems and penetrate new markets.

Solution Development

Our seasoned team of professionals has a

history of delivering solutions on time and in

budget. We combine proactive project

management, a proven agile methodology,

and a mastery of programming to guarantee

success for our clients.

Knowledge Packaging

SilverTree provides a complete set of

incubation services for organizations (or

individuals) that want to package their

knowledge and sell it as a service over the

Internet.

Contact [email protected] for

more information.

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