Is Cloud Computing Too Expensive For a Small Business?

 

While more and more businesses large and small are migrating their operations to the cloud, there are inevitably still some small business owners that harbor reservations about cloud computing: data security and service disruption are common concerns, for example, but often the main reluctance stems from the misconception that cloud computing is simply too costly for a small business.

While there are significant and unavoidable costs involved, cloud computing (and its closely-related subset, cloud hosting, which is specifically for the hosting of websites and applications and often provides small businesses with an ideal ‘way in’ to cloud computing) is in fact often more cost-effective than many business leaders assume.

The benefits to a small business of migrating to the cloud are plentiful, and potential cost savings are just one of them. Let’s explore some of the key advantages of cloud computing for small businesses, before delving a little further into why it’s a cost-effective solution. 

Top 4 Benefits of cloud computing for a small business

#1 Scalability

You might be considered a small business right now, but it’s likely you’re already thinking about growth. And that’s where one of the primary advantages of cloud computing comes in — hosting your infrastructure in a virtual environment with theoretically unlimited bandwidth means you can scale resources (RAM, disk space etc.) on-demand as you grow, meaning your infrastructure will always be able to keep up with increasing demand. 

#2 Improved performance

When you host your website or application on the cloud, you’re not reliant on a single server but an interconnected, geographically-diverse network of them, meaning latency or downtime are rarely issues. If yours is one of over 40% of websites on WordPress, for example, the cloud-based provider Cloudways is super-fast and eminently reliable when compared to many hosting solutions on the market. 

#3 Better data security

By storing data in the cloud, that data is not only easily accessible, it’s more secure and more easily recoverable in the event of a security breach. But your websites and applications are more secure, too: cloud providers typically include multiple web security features as standard, while the Cloudflare CDN add-on works with any cloud infrastructure, providing greater protection for websites and apps through DDoS mitigation and bot protection. 

#4 Cost effectiveness

And here we stumble upon the answer to our initial question, which is that cloud computing (and specifically cloud hosting) can actually introduce significant cost savings when compared with a more traditional, on-premises infrastructure. To delve deeper, let’s look at some of the reasons cloud computing can be such a cost-effective solution for smaller businesses. 

5 Reasons why cloud computing is a cost-effective solution for small businesses

#1 Lower initial investment

According to Amazon Web Services (AWS), the world’s foremost cloud infrastructure provider, migrating to the cloud can represent a 20% saving in overall infrastructure costs. Migrating to the cloud requires a smaller initial investment, allowing small businesses to be more flexible with their budgets. By paying a monthly subscription fee instead of large outlays on servers and such, they can also hold onto more valuable capital. 

#2 Reduced maintenance costs

In a cloud computing model, hardware is owned and maintained off-site by a third-party vendor, meaning your business is not responsible for the maintenance of systems or servers. If you use a managed cloud hosting provider (which effectively acts as an extended IT team) then there’s probably no need for in-house IT staff, which will save a lot on monthly staffing costs.

#3 Fewer security-related incidents

As IBM’s annual Cost of a Data Breach Report suggests, cyber attacks can be costly for organizations of all sizes. Small businesses are often targeted by attackers who assume they’re more vulnerable than their larger counterparts, but the enhanced data protection offered by the cloud means attacks are more preventable — and therefore businesses are less likely to suffer losses as a result of a breach.

#4 Enables staff to work remotely

The working landscape has shifted dramatically in just a few short years, with remote and hybrid working now becoming the norm for many businesses. That’s only possible through cloud computing (enabling secure access to company files and programs from any location) and it means the costs associated with the running and upkeep of a physical office can be significantly reduced. 

#5 You only pay for what you use

Since most cloud providers operate a ‘pay-as-you-use’ pricing model, you’ll rarely be spending on any hardware, software or other resources you don’t actually use. That inevitably provides small businesses with more liquidity, more flexibility and increased cash flow, meaning budgets can be managed efficiently and costs can be directed towards growth-initiating projects. 

In conclusion, while computing isn’t cheap, the answer to the question “is cloud computing too expensive for a small business?” is typically no. By not requiring a substantial initial capital investment and reducing the amount spent on in-house maintenance (plus the fact that most cloud providers operate a pay-as-you-use pricing model), cloud computing can in fact prove to be a very cost-effective solution for fledgling businesses and startups.