What are the benefits of IaaS for SMBs?


At a recent roundtable hosted by EMC Consulting, delegates were asked if they were using cloud applications. Very few hands were raised, but most of them were exploring how and why they should consider moving over to the cloud.

So before discussing the benefits of infrastructure-as-a-service for small and medium-sized businesses (SMBs), it important to consider how many of them are aware of the terms ‘cloud computing’ and Infrastructure-as-a-Service (IaaS).

What emerges is a similar picture to the one that was presented at EMC’s meeting. Cloud Pro spoke to nine industry experts and cloud customers and the majority believed SMBs were aware of cloud computing. However, not everyone agrees they fully comprehend what it means and how it translates into benefits for their individual businesses.

Nearly everyone uses the cloud for one purpose or another, but we are not all aware we are using it – take Gmail, a cloud service that many consumers, micro-businesses and SMBs use but don’t always know it is in the cloud.

Seeking cloud benefits

Tanya Shirlow, Microsoft’s head of small business sales and marketing, is one expert who believes SMBs are looking for the kinds of benefits cloud-based services can offer. She puts the advantages into three categories: the first being the ability to access new capabilities for their businesses, the second concerns reducing costs as cloud solutions offer economies of scale and the third is about gaining access to IT security and management expertise.

SMBs are also able to increase or decrease IT expenditure as they can be offered different subscription levels to meet business needs and demands. So, an SMB might wish to add collaborative working as a new capability by utilising a cloud-based collaboration solution, or it might not have the in-house IT expertise or infrastructure to manage enterprise level IT solutions on an SMB budget. Even a micro-business can access these kinds of tools.

Expertise at hand

A cloud provider has the expertise to help SMBs manage IT infrastructure, which may not exist in-house. This is very much what IaaS is about. Yet Software-as-a-Service (SaaS) should also be considered, because SMBs are unlikely to want to just run one solution in the cloud, but several.

The other benefits include being able to quickly roll-out a solution, access to a virtual private server to provide data back-up support, rapid user adoption, convenience, access to data whenever and wherever required, better returns on investment and SMBs can focus on their core business.

“The biggest benefit is that IaaS allows SMBs to have access to quality and scalability of infrastructure, which they would not be able to build themselves,” said Collin Coleman – CEO of Abide Financial. He claimed most SMB’s IT tends to run “at full tilt and they need more servers to a point that it all becomes very fragmented.”

He therefore thinks IaaS will particularly assist any SMB that finds itself in a rapid growth phase, but businesses aren’t totally constrained by technology. It’s therefore vital to carefully analyse why the cloud and IaaS are the right solutions.

Skills and integration dilemma

The trouble is IaaS is designed for people with technical expertise.

“If you are not technical you need to find someone who can support it for you,” said Simon Abrahams, head of product at Rackspace, adding SMBs can turn off the service as and when it is needed.

“We have a customer called YourGolfTravel.com and they have seen more opportunities that they had not previously been able to exploit because they couldn’t respond in time, but they can do just that now in hours as it is all just a click away,” he said.

This sounds great, but the question remains about how an SMB with few technical skills, experts or knowledge can integrate legacy solutions into a cloud-based infrastructure like IaaS and SaaS. The answer is they would need to employ a developer to manage and develop applications for them to work properly and seamlessly together.

Stefan Töpfer, CEO of WinWeb, said customers needed to ask themselves: “Are you going for an integrated concept, or a fragmented cloud one, or a fragmented cloud model that involves several different cloud providers?”

He claimed vendors fell foul by talking about mashables and APIs and don’t tend to speak the language a typical SMB understands.

“Cloud providers play friendly with the terminology to hide the fact that they are not offering a complete infrastructure,” said Töpfer. The trouble is, he explained, SMBs don’t often have the understanding of the technology to avoid this pitfall.

Understanding SMBs

Cloud providers need to remember SMBs can’t afford a corporate mentality and they don’t have the opportunity to divide themselves into areas of expertise. In some cases, many different aspects of an organisation – from sales to invoicing and IT – may have to be carried out by one or a small number of people.

Christophe Primault, CEO of GetApp.com, said cloud providers often forget SMBs aren’t always interested in infrastructure as their focus is on applications.

“SMBs just want to get access to functionalities that meet their business needs and which make them more productive,” he said.

Primault believes the infrastructure that lies behind them doesn’t really matter; it’s more of a case of considering whether an application does the job efficiently, effectively and in an appropriate fashion.

So, at a very basic level, cloud providers need to listen and do a certain amount of hand-holding to understand whether IaaS and other cloud-based solutions meet the needs of their SMB clients. It’s also important to remember the cloud might not always be the right way to go, particularly if an SMB has bespoke applications solely tailored to the needs of its core business. Alternatively, a hybrid model should be considered.

SMBs: Ask questions

Before going down the IaaS route, SMBs need to ask their prospective cloud providers a number of questions.

Matt Horne, general manager of Cherwell Finance, said they needed to ask about how much any additional costs were, such as services. There is also the consideration about how much uptime a cloud provider can guarantee and questions should be asked about the security and disaster recovery processes the cloud provider has in place. Conversely the cloud provider should determine the benefits of IaaS for each specific SMB.

The experts Cloud Pro spoke to also provided the following top tips…

SMEs should:

  • Understand what they are doing and why they are doing it – ensuring they define the business benefits of using IaaS and moving over to the cloud and scrutinise the associated costs.
  • Consider what is required, including the skills and expertise needed, to move to the cloud.
  • Define clear metrics to measure their projects against to ensure that they are on track.
  • Find a trusted advisor to help them to comprehend what the benefits could be for their own particular firm.
  • Be aware it is not a case of all or nothing; the hybrid approach is commonplace.
  • Consider the cloud providers own infrastructure, expertise and the terms of an SLA.
  • Ask questions about who is in control of managing and running the servers.
  • Talk to cloud providers about data access levels to ensure they aren’t restricted from using it whenever they want or need it.
  • Determine their security and disaster recovery requirements.

Salesforce’s director of product marketing, Xabier Ormazabal, emphasised that SMBs need to think about the processes for automation. Considering many companies of all sizes need to have a high level of mobility these days, he recommended SMBs should also contemplate what their mobile and social networking requirements will be for internal collaboration and external social media monitor and engagement.

He agreed IaaS and the cloud generally do provide some potential benefits for SMBs, citing Dutch firm Spotzer as an example of a successes story.

“They do affordable advertising, have 68 employees and 2,000 collaborators worldwide,” he said. By using the cloud, the company can offer cost-effective advertising solutions more quickly than it would otherwise be able to do.

A case of evolution

The benefits of IaaS and the cloud depend on how an SMB’s business model changes as the business evolves. IaaS might not be for everyone, but it can increase the size and punch of SMBs. The quality and added value of a cloud provider’s service offerings, more than their solutions, will attract them to IaaS.

Ormazabal said this is because SMBs are smarter than large enterprises when it comes to determining how they use capital. The onus is therefore on the cloud providers to clearly explain to each SMB the benefits of moving over to a cloud-based infrastructure and part of this process might involve demonstrating what the cloud really means in added value terms to SMBs.