Academic journal article Entrepreneurial Executive

Cloud Computing Effects on Small Business

Academic journal article Entrepreneurial Executive

Cloud Computing Effects on Small Business

Article excerpt


This research project is focused on cloud computing and its effects on small business in terms of cost, reliability, and security. Cloud computing is one of the new paradigms of information and communication technologies that provides opportunities to deliver computing services in new ways. Even though small businesses are aware of the benefits of cloud computing, there are many of them who are very reluctant to use cloud computing facilities as an alternative approach to manage their data and storage.

With cloud computing, the aim is to share resources, minimizing organizational expenditures and enhancing collaboration between networks or organizations. It enables the information technology service providers with new methods of doing business. In addition non-information technology companies can also benefit by facilitating cloud computing service. More on the formal definition and features of cloud computing can be found in (Stanoevska, 2009; Grossman., 2009, and Sultan, 2010).

In cloud computing, organizational tasks are done by accessing the required applications through the Internet simply by using a web browser. In the cloud computing concept, organizations deal only with the software and do not need to think about the hardware at all unless they become Data Center Service providers. Among the popular cloud computing service examples are, Google Apps, Amazon web services, and Facebook (Kambil, 2009).

There are some advantages and disadvantages associated with cloud computing. Lower hardware cost, improved performance of computers, lower information technology infrastructure cost, reduced maintenance issues, and lower software cost, represent a few of the main advantages. Additional advantages of using cloud computing include instant software updates, unlimited storage capacity, increased data safety, improved compatibility between operating systems, easier group collaboration, universal access to documents, and latest version availability. Among the few drawbacks are the requirement of constant high-speed Internet access (since most applications do not work well with low-speed connections), features might be limited, and stored data might not be secure (Miller, 2009).

The cloud is a metaphor for the Internet and is an abstraction for the complex infrastructure underlying it. It differs from traditional computing paradigms as it is scalable and it can be encapsulated as an abstract entity that facilitates different levels of services to clients. Further, it is driven by economies of scale and services that are dynamically configurable (Foster et al, 2008). Small businesses need to consider the benefits, drawbacks and the effects of cloud computing on their organizations and usage practices before deciding on its adoption and use (Fellowes, 2008).

Since large organizations are complex, it is very important for cloud computing to deliver real value rather than serve as a platform for simple tasks such as application testing or running demos. The need for cloud computing to deliver real value is a major issue for small businesses as well. For this reason, issues around migrating application systems to the cloud and satisfying the needs of small businesses should be explored. For small businesses, the cost factor is important but customer relationships, public image, flexibility, business continuity, and compliance are equally important (Khajeh-Hosseini, 2011). Small businesses need to understand the major concepts of cloud computing, including space, time, cost, availability, privacy and security.

The objective of this study was to investigate the benefits and drawbacks of cloud computing for small businesses. Three areas that were explored include cost benefits, data availability, and data security. Cost benefits of cloud computing include converting capital expenses to operating expenses (Armbrust et al., 2009). Usually cloud computing providers have detailed costing models which are used to bill users on a pay-as-you-go model (Khajeh-Hosseini, 2011). …

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