As with any business technology, cloud computing comes with pros and cons, benefits and risks. That said, any risk that does exist in the cloud tends to be greater in traditional IT infrastructures. And the benefits far outstrip those found in traditional IT settings. The ROI advantages alone make the cloud attractive, but that's just the tip of the iceberg.

“The benefits highly outweigh the risks any day, especially for smaller businesses,” Ostaffy insists. “The cloud has opened up the door to entrepreneurship to many people who would have experienced huge cost-to-entry issues in the past.” Reduced risk and entry barriers lead to more competition, which in turn leads to greater innovation. “And that, well, that’s just better for everyone,” he says.

Jackie Wake, product marketing manager at GFI Software, calls out what she believes are the core benefits of cloud computing for SMBs:

• Dramatic reduction in the need to maintain as many servers and network devices on business premises. “This reduces risk from events like fires and floods, reduces the need for physical office space, and has the potential to cut down on the amount of onsite support required,” she says.
• Easier management and deployment of software across distributed IT environments: roaming laptops don’t have to return to the office network to ensure they are on the latest version.
• Upgrade and maintenance responsibility shifts to the vendor, freeing up IT resources and reducing the time, skill set, and expense required to maintain system operations.
• Cloud-based IT resources can be accessed from anywhere with an Internet connection, making it far easier to implement remote and flexible work arrangements.
• Disaster recovery planning is enhanced, since loss of access to an office no longer means loss of access to business systems and files.
• Licenses for applications and additional storage capacity can be purchased quickly and on-demand.

“The future can be hard to predict for any business, but for smaller businesses any unnecessary delay, such as having to guess at licensing requirements and purchasing too early, is all the more keenly felt,” she notes.

Perhaps the most important core benefit the cloud offers SMBs is the ability to change the nature of work, says Gabriel Mays, founder of Just Add Content, a developer of small business websites and cloud integration platforms. “Because cloud services are web-based, most of them have application programming interfaces (APIs) that allow them to talk to each other and exchange information. This is powerful stuff.”

Mays offers the example of a contractor adopting low-cost cloud services to manage his business and integrating them with his website. When a customer submits a work request, these things would happen automatically:

• A draft invoice is created in an invoicing/accounting app.
• Contact details are added to a customer relationship management (CRM) database.
• The customer is added to an email newsletter distribution list.
• An appointment is made in the calendar app.
• A new project folder is created in the project management app.
• A text message summary is sent to the business owner’s phone.

“A thousand different things could happen and hundreds of apps could be used, but you get the idea,” Mays says. Cloud computing lets SMBs automate all the tedious, repetitive tasks and frees up owners to focus on the things that make them money. “Imagine the difference in profitability between SMBs that take advantage of cloud apps and those that don’t. It’s horses versus automobiles all over again,” he declares.