What is cloud computing?

If you use a webmail application like Windows Live Hotmail or an online service such as Facebook, you’re already using a type of cloud computing. Unlike conventional software, which runs on your own PC (personal computer), cloud computing (also called software-as-a-service or SaaS) means running applications over the internet. Examples include web-based email, customer relationship management or web conferencing.

Typically, you pay for cloud computing applications on a per user, per month basis rather than paying up front for hardware and software. Often this combination of advanced technology and predictable pricing makes it very attractive.

What can cloud computing do for my business?

One hundred years ago, if you wanted electricity you had to build your own power station. Now you just plug stuff into wall sockets. Ten years ago, if you wanted big company IT, you had to buy your own servers and install expensive software. Now, increasingly, you can access these services over the internet. This is a critical change for small businesses because it gives them access to services that were too complex or too expensive before.

- Email

- Office applications

- Backup

- File storage and sharing

- Working together on documents

- Share files and information on an intranet

- Shared calendars and other information

- Email security

- PC management

- Customer relationship management

- Online stores

- HR applications

There are also intangible benefits:

- Resilience: With cloud computing, if your computer is stolen, you can carry on working using any other web-connected PC.

- Reduced IT costs: With less hardware and software to manage, there is less demand for expensive IT support staff. Many online services come with community help and support. Your IT partners and in-house staff (if any) can focus on supporting the business rather than routine IT management tasks.

- Security: Data stored in large, well-protected data centres is likely to be safer than information on your laptop or a server in your office. Vendors have a strong vested interest in keeping intruders out, viruses down and data backed up.

- Flexibility: Your costs go up and down according to your requirements. For example, if you use a hosted email server, you pay for each active user, so if your company expands you’ll pay more, but if it downsizes, your costs will fall. Also, if you need to increase capacity very quickly, for example to add more storage for a file sharing service, you can do it easily with cloud-based services.

- Access to new services: Cloud computing gives you access to advanced technology that may not be available or cost-effective any other way.

- Easy upgrades: Businesses get access to the latest technology and regular updates without having to deal with the actual upgrade process on their own computers.

- Cash flow: Expect to pay monthly rather than buy hardware and software up front. For growing businesses, this removes another barrier to advanced technology.

Examples from Microsoft include:

- Web services such as Hotmail, Bing Maps or search engines such as Bing

- Business applications such as Microsoft Office Web Apps

- File storage and sharing services such as Windows Live SkyDrive

- Customer relationship management applications such as Microsoft Dynamics CRM Online

- Email and communications systems such as Microsoft Online Services

- Hosted security and PC management services such as Windows Intune

Why is everyone excited about cloud computing?

Cloud computing delivers significant benefits because of the way it works:

- New business models: Typically, cloud vendors charge a per-user, per-month fee. This gives you a predictable price that goes up and down as your usage changes. This compares favourably with the big, upfront capital cost of buying your own hardware and software. It is an operational expense for tax purposes rather than capital expenditure, which simplifies your accounting too.

- Economies of scale: Big companies can run data centres with thousands of computers to deliver cloud services. It is much more efficient for you to ‘rent’ five percent of one of their servers than it is to buy 100 percent of your own.

- Cost savings: Because it is so efficient, it is also usually cheaper. You don’t just save the cost of the hardware and software but also the IT skills and management time required to set them up and run them. For smaller businesses, cloud computing gives access to services that are often too expensive to run in-house, such as hosted intranet sites or communication systems.

- Best practice IT: Cloud vendors deliver higher levels of security, reliability and availability than most businesses can manage in-house. For example, most service providers offer availability service level agreements and ensure that your data is backed up and secure in multiple locations.

In short, cloud computing is an attractive form of outsourcing that gives you easy access to advanced technology.

Find out more about Microsoft Cloud Solutions

Watch the video below featuring Tanya Shirlow, SMB Marketing Lead at Microsoft UK, as she discusses the advantages of cloud services.


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