By Derek Callow
August 2, 2010

When times get tough, focusing on your core business is imperative. Cutting bottomline costs to the business along with making operations run as efficiently and effectively as possible is one of the first steps toward shoring up your defenses. In these tough economic times, ask any company if they could save over Php20,000 a year per employee and most likely they’d jump at the chance.

IT can be a big upfront cost and having to manage it on a daily basis can increase spend and distract you even further from your core focus—making money. Until now.

The small business’ approach to IT is being redefined by the Internet. E-mail, documents, calendars, and other business communication tools are increasingly being delivered and hosted online via a trend known as “cloud computing.” Cloud computing is a simple concept: applications and data are delivered over the Internet via a third party. It’s a transformational, disruptive technology that is having a big impact on the way the world of IT works and the way businesses run IT.

Cloud computing has many key benefits, but two stand out—first, cost savings. Once you’re hooked up to the web, Move to “The Cloud,” Save Costs on The Ground the cost of buying licenses, purchasing servers, and maintaining them is reduced because it’s possible to effectively “rent” business applications from a third party. This is advantageous for start-up small businesses that work with limited capital. With just a connection to the Internet required for these companies, they could access high-quality, inexpensive solutions.

From a budget perspective, it brings predictable costs for IT and dramatically reduces spend on traditional desktop software. The Broadband Stakeholders Group (BBSG) estimates that the online model would save companies at least Php20,000 a year per person in support costs. If 30% or 234,140 of small and medium-sized businesses (SMBs) in the Philippines made the switch to cloud computing, the savings could total Php40 billion a year.

Second, there are productivity gains to be made from running your business on the cloud. Key to this is the shift toward a more collaborative way of working. We need to share information and work with others to get things done, and the Internet allows you to do this in a way that hasn’t been possible before. A business owner in Cebu City chats with one of her managers working from Makati City as they work on the same spreadsheet at the same time. An on-the-road sales team meets on a single document in the cloud to plan the next quarter’s budget. Getting access to information instantly, from wherever you might be, on whatever device you need it is crucial. After all, the geographical and mobile nature of business doesn’t change just because credit is harder to come by.

With these two key benefits, small businesses are allowed to be on equal footing with enterprises and even have an advantage over these larger businesses. By being in the cloud, small companies, or even start-ups, could have a significant online presence similar to enterprises.

Research on cloud computing from K2 Advisory, an analyst firm from the UK, reveals that SMBs could outpace larger enterprises in terms of cloud services adoption rate. Research shows that SMBs running on cloud computing could more easily recover from a recession, since they are less likely to be constrained by the large costs of maintaining client-server ERP systems that large businesses have invested in. As businesses relying on cloud services increase and demand for server capacity increases, companies could leverage the capacity of servers available, allowing them to expand further without investing much money on servers.

Some business owners could be hesitant to transfer their entire IT infrastructure to the cloud: hosting your data with a web-based provider could represent a shift in thinking about control and security of data. However, it is important to remember that the business of the key cloud computing providers who host the data depends on offering a secure environment for it. They invest more time and money in protecting their customers’ data than any nonspecialized organization could possibly afford; in fact, it is one of the most important factors considered when developing new products that handle personal and business data.

Over one million businesses are currently using our Google Apps productivity suite, which provides online email, instant messaging, documents, video, and much more through the power of the cloud. These companies have seen that this model makes economic and business sense, making them more agile, flexible, competitive, and innovative in today’s increasingly interconnected, fast-paced world. The question is, have you?

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