The cloud levels the playing field for your small company

by Marcy Hoffman on January 6, 2011

saving company money

How do I retain my existing customers,get new customers and run my business on profitable basis ?

This was a question posed on LinkedIn. Logically, most of the responses had to do with marketing, customer retention, social media and the like.

But I honed in on the last words in the question: profitable basis.

I learned a valuable lesson about operating a profitable business from my father who grew his business during the Great Depression (the 1929 one). He taught me that you can’t always control the sale price, especially in a competitive market, but you can control your costs. Study your operations, see where you can save, consolidate or bringing in new methods or technologies that can reduce your overhead and improve your productivity.

Several recent studies suggest that small business owners have already been hunkering down.  “As sales have declined, these entrepreneurs have cut expenses and shed debt to survive the Great Recession and to hopefully be able to thrive when that increasingly elusive recovery actually begins.”

Yet, economic forecasters are predicting growth in 2011 to cap at 2.7%, although increasing towards years end. The National Association for Business Economics, reflecting the views of 51 professional forecasters, projects slow economic growth for the rest of 2010 and 2011, and states that the “economy will struggle against financial headwinds.”

So, if the pace of growth remains low, and businesses have cut costs, inventory and payroll, where can they find additional areas to reduce costs without impacting on productivity.

Look to the cloud.

Keyon Thomas our Reseller Channel Manager, prepared a study for one of our clients on how migrating to cloud computing would impact his company. He commented “Now in response to the query whether the “The Cloud” is ready for businesses, the results of my research demonstrated that on average, a 20+ employee company will save between 85-96% on their IT costs by switching to a cloud computing model. In this economy this should be a no brainer. In a 20 person company that can be upwards of $138,000 off its annual operating expenses”.

How does the migration accomplish all this? Look at your end of year expense column along with your 2011 expense projections. Factor in the costs of buying, upgrading and maintaining your servers, networks and upgrading your computers. Add to that all of your annual licensing fees, software purchases and the total dollar amount of your IT costs, both internal and consulting. And finally factor in the man hours your staff spends either fixing a IT problem or waiting for it to be fixed. According to a recent Samsung study which examines how workers are actually using IT in the workplace and how this affects issues such as productivity, health and security, employees spend an average of 7 hours a week fixing IT headaches. Take that number, multiply it by your hourly cost per employee, than multiply that figure by the number of employees….and you have a staggering figure.

Cloud Computing in the most basic of terms is the act of using the internet for your basic computing needs. Email, CRM, accounting, invoicing, document creation and sharing…cloud computing allows you to run all these and more with only an internet connection. And interestingly, cloud computing levels the business playing field. The power of running your business on the cloud allows your company to use the same top rate applications as the Fortune 100s.

The U.S. Weather Service designates the highest flying clouds as “cloud 9,” which is how the term came to refer to being “on top of the world.” Think of cloud computing as your own cloud 9 — it gives the smallest of businesses the power once reserved only for the big boys.

If you would like more information about our Costs Research Report, feel free to contact us.

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