Why Cloud Computing Has Big Benefits for Small Business

Cloud computing has forever changed the way small businesses conduct business. This transformative technology enables companies of all sizes to access powerful computing resources over the Internet, eliminating the need for costly on-premises infrastructure.

Small businesses can now leverage enterprise-grade solutions in the cloud to streamline operations, enhance collaboration and amplify productivity.

By embracing cloud services, entrepreneurs can scale their IT resources up or down as needed, paying only for what they use. This affordable technology model allows small businesses to compete with larger enterprises on a more level playing field. From secure data storage to advanced analytics capabilities, cloud computing empowers small businesses to focus on growth rather than on managing complex IT systems.

Read on to learn the benefits of the cloud for small businesses, the steps firms can take to set up cloud, what the future holds for cloud and more.

In This Article

1. What is Cloud Computing?
2. Types of Cloud Computing
3. What Are the Main Uses of Cloud in Small Business?
4. Examples of Cloud Computing in Small Business
5. How Cloud Computing Reduces Expenses for Small Business
6. Next Steps: Moving Small-Business Data from On-Premises to Cloud
7. Setting Up Cloud Security Measures for Small Business
8. Preparing Small-Business Employees for Transition to Cloud
9. Future Trends: Most New Software Will Operate in the Cloud

Cloud computing has revolutionized how small businesses access and use computing tools. Instead of relying on traditional on-premises infrastructure, cloud computing offers the convenience of on-demand access to a wide array of resources, including physical and virtual servers, data storage, networking capabilities, application development tools, software and AI-powered analytic tools. It's a model that couldn't be more flexible or scalable.

The cloud enables remote work by supplying seamless access to data and applications from anywhere, facilitating closer collaboration and profitable productivity. It also forms the foundation for creating seamless omnichannel customer experiences, allowing businesses to engage with customers across multiple touchpoints.

Additionally, cloud computing empowers small businesses to harness the potential of leading-edge technologies—like generative AI and quantum computing—by furnishing the vast computing power and resources needed to support these advanced applications.

Behind the scenes, cloud service providers (CSPs) manage cloud-based technology services hosted at remote data centers. They typically offer their resources on a monthly subscription, including infrastructure maintenance for small-business clients.

Related articles:

• What is SaaS?
• SaaS vs On Premises

There are four main cloud computing types, each offering unique benefits and considerations for small businesses:

1. Public cloud computing is the most popular model. With it, multiple users share a network of remote servers managed by a CSP. This approach offers scalability and cost-effectiveness, as organizations only pay for the resources they use. For example, a small business might use a cloud infrastructure vendor to host its website and customer database, scaling resources up as they grow.
2. Private cloud computing dedicates infrastructure to a single organization and includes enhanced security and control. This model is ideal for companies with strict compliance requirements, regulatory standards or sensitive data. Deltek's private cloud solutions, for instance, cater to government contractors who need to meet specific security demands.
3. Hybrid cloud computing combines elements of public and private clouds, allowing firms to leverage the benefits of each. For example, a company might keep sensitive financial data on a private cloud while using a public cloud for less critical apps and information.
4. Community cloud computing is a collaborative approach where companies with similar requirements share cloud resources. For example, regional healthcare providers might establish a community cloud to securely share patient data while complying with industry regulations.

Cloud has become an invaluable tool for small businesses, offering many benefits that can significantly enhance operations and competitiveness.

One of the primary advantages is robust data backup and disaster recovery capabilities. By leveraging cloud services, companies can ensure the information that is their lifeblood is securely stored across multiple locations, providing peace of mind in the event of unforeseen circumstances.

Small businesses are also finding that cloud solutions can dramatically boost productivity. Streamlining workflows allows teams to work more efficiently from anywhere. For instance, a small engineering firm might use cloud-based program management tools to monitor projects and track time, enabling team members to stay connected whether they're on a building site or in the office.

Security is often a top concern for small businesses, and cloud providers typically offer advanced protection measures that small companies couldn't afford to implement on their own. From data encryption to multi-factor authentication, these security features help safeguard sensitive information against cyber threats.

Cloud services can also assist with regulatory compliance, helping businesses meet industry-specific standards like HIPAA or GDPR.

Plus, the mobility afforded by cloud-based applications enables employees to access company data securely from any device, fostering a responsive work environment.

By moving essential business functions to the cloud, small businesses can access work-forward capabilities without significant upfront investment. Each of these examples powers specific levels of functionality:

Software-as-a-Service (SaaS)

Software-as-a-Service, also known as SaaS solutions, have become ubiquitous in small businesses. They offer easy-to-use applications that are accessible from anywhere with an internet connection. For example, a local bakery might use a cloud-based point-of-sale system to process transactions and track inventory in real time. Similarly, a boutique marketing agency could use project management software to collaborate with on-the-go clients over tablets, enabling seamless campaign management.

Infrastructure-as-a-Service (IaaS)

IaaS is made up of flexible computing resources that small businesses can access as needed. For example, a growing e-commerce startup might leverage a cloud infrastructure provider to handle sudden spikes in website traffic during promotional events. This allows the company to maintain performance without overinvesting in servers it may not need year-round.

Platform-as-a-Service (PaaS)

PaaS offerings enable small businesses to develop and deploy custom applications without managing the underlying infrastructure. For example, a local healthcare clinic could use a PaaS solution to create a patient portal for scheduling appointments and securely accessing medical records. As for its agility, PaaS accelerates development while ensuring compliance with healthcare regulations.

File Sharing and Data Storage

Cloud-based file sharing and storage are catalysts for how small businesses collaborate and manage information. A virtual team of freelance designers might use a file collaboration service to share large design files and iterate on projects in real time. This eliminates version control issues and enables teamwork regardless of physical proximity.

Data Governance and Cybersecurity

As small businesses increasingly rely on digital tools, robust Cybersecurity measures become critical. Cloud-based security solutions offer sophisticated protection without requiring in-house expertise. For instance, a small law firm could implement multi-factor authentication and encrypted file storage to safeguard sensitive client information; all managed through a user-friendly cloud interface.

Small businesses are discovering that cloud computing is a consistent way to trim costs while enhancing performance effectiveness.

Eliminating Upfront Investments

One of the most immediate benefits of cloud computing for small businesses is the elimination of substantial upfront costs. Companies can access cutting-edge technology through cloud-based services rather than investing in expensive on-premises hardware and software licenses. For example, a small architecture firm might use Deltek Ajera in the cloud, avoiding the purchase of costly servers while still accessing versatile project management capabilities.

Flexible Payments Model

Cloud services typically operate on a pay-by-usage model, allowing businesses to align their technology expenses with how much they actually use the software. This approach enables more efficient budget allocation and helps prevent overspending on underutilized resources. A seasonal business, for instance, could scale its cloud storage needs up during peak periods and down during slower times, paying only for what it uses.

Scalability and Cost Control

Cloud computing's scalability helps small businesses experiencing growth or fluctuating demands. Cloud resources can quickly adjust to accommodate increased e-commerce traffic during product launches or expanded data processing needs for a new client project. This flexibility eliminates the need for businesses to maintain excess capacity "just in case," resulting in more cost-effective operations.

Reduced Maintenance Burden

Small businesses can significantly lower their IT maintenance costs by shifting to cloud-based solutions. Cloud service providers handle server upkeep, software updates and hardware replacements, freeing up internal resources. Growing companies can now operate with leaner IT teams or redirect technical staff to more strategic initiatives that drive business growth.

When small businesses decide to migrate to the cloud, they're embarking on a journey that can transform their operations. While potentially complex, this transition offers numerous benefits when executed thoughtfully.

To start, companies should clearly define their objectives. Are they looking to reduce IT costs, improve scalability or enhance data security? Perhaps they want to leverage cloud-based applications like program management tools. Or maybe it's all of these things. Whatever the goals, they will shape the migration strategy.

One of the most important steps is choosing a suitable cloud model. While a SaaS solution might work well for a professional services firm needing customer relationship management (CRM) capabilities, a manufacturing company might prefer an IaaS model for greater control over all its systems.

Data migration planning is next. Businesses should map out what data needs to move, how it will be transferred and how to maintain its integrity. For instance, a new shipbuilding part maker wants to move project data to Deltek Costpoint in the cloud—and must ensure that all historical project information transfers accurately.

Security can't be overlooked. Small businesses should implement robust encryption and verify their cloud provider's compliance with industry regulations. A healthcare provider, for example, would need to ensure HIPAA compliance when moving patient data to the cloud.

Thorough testing is vital before fully committing. This might involve temporarily running parallel systems to compare performance and identify issues. Employee training is equally important—team members must understand how to use new cloud-based tools effectively.

Small businesses can leverage cloud infrastructure providers to implement robust security measures without breaking the bank. How? Cloud vendors can create a layered security approach that protects client data and operations, follows best practices and deploys incrementally.

One key recommendation is to restrict public network access. Disable public IP addresses on workstations and configure firewall rules to limit exposure to potential threats. For example, a small architecture firm could set up private access to cloud resources, ensuring employees can only connect through secure channels.

Another step is implementing the principle of least privilege. Businesses reduce the risk of unauthorized access by granting users only the permissions necessary for their roles. A software development startup might use identity and access management tools to control which team members can modify code repositories or deploy code to production environments.

Regular updates and patches are essential for maintaining a secure environment. Cloud providers often offer automated image updates, ensuring workstations run the latest, most secure versions. A small e-commerce business could configure its cloud workstations to automatically update weekly, minimizing vulnerabilities.

Transitioning to cloud-based solutions doesn't have to always be overwhelming for small businesses. With the right approach, companies can effectively prepare their workforce for this significant change, fostering enthusiasm and buy-in from the outset.

One effective strategy is to involve employees early in the process. Invite program and project managers to participate in cloud vendor demonstrations. This hands-on experience allows staff to see firsthand how cloud solutions can streamline their daily tasks, such as resource allocation and program tracking.

Communication should be open throughout the transition. Regular Q&A sessions, both in-person and virtual, let employees voice concerns and get excited about the benefits of cloud adoption.

Training is another integral part of preparation. Rather than a one-size-fits-all approach, businesses should tailor training programs to different employee groups. For example, an engineering firm might offer specialized sessions for CAD designers on accessing designs in the cloud while providing separate training for finance staff on cloud-based expense management.

Encourage feedback throughout the process. Employees often have valuable insights that can help smooth the transition. For instance, a sales team member might identify how a new cloud CRM could integrate with existing customer communication channels, improving overall efficiency.

A clear trend is emerging: New software companies are increasingly building and operating entirely in the cloud. As a result, entrepreneurs can leverage the cloud's inherent economy and efficiency, enabling them to deliver services without the burden of managing anything on-premises.

As this trend accelerates, several key aspects are shaping the future of cloud-native software development: Serverless computing is gaining traction, enabling developers to concentrate on code rather than server management, streamlining deployment. For instance, a startup might use a cloud platform provider to handle backend processing for their mobile app, scaling automatically with user demand.

Microservices architecture is another pivotal trend: breaking applications into more minor, independent services. This enhances agility and scalability, allowing teams to develop and deploy components independently. A program management tool provider might adopt this approach to modularize features such as time tracking or resource planning.

The integration of AI and machine learning capabilities is also transforming cloud-based software. Companies harness these technologies to analyze vast datasets, personalize user experiences and automate processes. For example, a cloud-based CRM might use AI to predict customer churn or recommend personalized marketing strategies.

As cloud computing matures, hybrid and multi-cloud environments are becoming more common. With these, smaller firms can optimize data residency by leveraging multiple cloud providers.

Deltek's suite of Cloud-based solutions may be the perfect fit for your small business. Learn more about our Cloud Platforms and position yourself for big benefits with a small change in the way you do business.

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