Is Cloud Computing Too Costly for Small Business ?

An article posted today on forbes.com headlined that the price of cloud computing is out of reach for small business. The author Gene Marks reported that he had been asked about cloud computing by more than thirty small business clients over the past six months but on analysis non had adopted cloud services based on costs.

As examples in his article. Gene considered Software as a Service (SaaS) rather than any infrastructure or platforms. As a start Customer Relationship Management (CRM) software solutions were considered from companies such as Salesforce.com, MicrosoftDynamics and ZohoCRM. Monthly prices were suggested and then compared with an on premise solution. It is at this point that I felt that the reporting was not satisfactory and the prices quoted inaccurate. Take for example Salesforce.com quoted as being between $60-$125 per user per month. This all depends on functionality and actually Salesforce.com is available from $5 per user per month. Similarly ZohoCRM, quoted by Gene Marks as being $25 per user per month. Again, this is available in professional edition for $12 per user per month. What is important is to consider what features are required from the software and then consider the price for something that delivers those features and extra features that are not required.

Gene Marks article motivated me to write this post because I was disappointed by the inaccuracy and potentially misleading view he provides on the cost of cloud computing. For sure I agree that cloud computing is not always the solution for everybody, but often cloud computing is by far the best solution for small and medium sized businesses. The monthly fee being not only cost effective, but providing access to software normally only available to large corporations. Other benefits such as increased agility, more collaborative working, access from any where are other advantages that cloud computing can provide over on premise software and should therefore be considered.

In summary, when considered cloud computing, any organisation needs a clear understanding of what cloud computing is. The advantages and disadvantages need to be evaluated in the context of the specific business requirement(s) cloud computing can meet. The full implications of cloud computing – not only purchase price, but support costs, capital hardware costs, data centre costs (hardware, operating system licenses etc), staff skills, customisation, speed of upgrades, vendor lock-in to mention a few, need to be considered. For those considering cloud computing, Learning Tree’s Introduction to Cloud Computing course equips attendees with the knowledge and insight to be able to make informed balanced assessments on wether cloud computing is an appropriate solution based on their business a technical needs.

Chris Czarnecki

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