Your small business has dabbled in cloud computing. You send e-mails using Gmail, manage your customer relationships using Contactually and keep tabs on your projects using Basecamp. Small businesses seek out this type of cloud computing — known as Software as a Service (SaaS) — because it’s agile and customizable, and it saves time and money.

But a growing number of small businesses are now adopting Infrastructure as a Service (IaaS), another category of cloud computing that provides users with IT infrastructure like email servers, network equipment, disaster recovery, data centres, operating systems and storage. In search of scalability, more and more small business operators are renting their infrastructure.

Maybe you’ve tested the cloud computing waters with SaaS and want to learn more. It may be time to jump all the way in.

Here are five reasons you should consider moving some of your small business infrastructure to the cloud:

1. Access to enterprise-level equipment on a small business budget

The primary benefit of IaaS is access to enterprise-level equipment you probably wouldn’t get with a typical small business budget. Some small businesses just don’t have the capital to purchase new hardware.

Instead of figuring out whether you want a lightning-fast server to work with your databases or your web hosting, you get access to high-end servers working in a distributed resource environment. This gives you an even better performance boost. You avoid paying the overhead for expensive servers while still reaping the benefits.

Bigger businesses are putting their faith in the cloud. BCE Inc. last year purchased Q9 Networks for $1.1 billion. Q9, based in Toronto, is a network of 14 data centres in three provinces. While small businesses have latched onto IaaS, the technology also clearly appeals to large enterprises in Canada and around the globe because of its cost efficiency and scalability.

2. You don’t pay for computing power or network technicians you don’t need

IaaS is priced on a pay-as-you-go model, similar to other types of cloud service providers. You don’t pay for computing power that you won’t use. It also allows you to scale your service to match your small business needs. If your latest video project goes viral and your website is suddenly hit with a 500 per cent increase in product orders, a quick call to your IaaS provider allows you to up your computing power on the spot.

Choosing an IaaS provider also helps you avoid costly network technicians, a necessity if you plan on doing your own IT support. Relying on an IaaS provider means you’re only responsible for deploying applications. The cloud computing service takes on the responsibility of making hardware upgrades, fixing hardware issues or figuring out network outages.

3. IaaS pairs up well with SaaS and Platform as a Service (PaaS)

IaaS and SaaS, along with Platform as a Service, another category of cloud computing, fit together like a “stack” — a term coined by the U.S. National Institute of Standards in Technology. Where SaaS is used for applications, PaaS is used for software development over the web.

If you plan to take most of your infrastructure budget and move it to the cloud, you know your IT infrastructure in the cloud will operate seamlessly with your development platforms and business applications.

A commonly-used analogy likens the “stack” to a transportation network: The infrastructure is the road and the platform is the car that drives on the road. The people and goods carried inside the car are the software and information exchanged and stored in the cloud.

4. IaaS picks up cloud-based servers for your website and company intranet

A massive in-house data centre in your building must be maintained, monitored and kept secure. With IaaS, all of your web and application servers are located at the cloud host’s data centre, available for your use whenever you need to access it. The same benefits apply to e-mail servers, which contain confidential data about your business, employees and customers.

5. Better network infrastructure and less hardware

Beyond access to enterprise-level networking equipment and switches, IaaS can provide access to a better bandwidth setup than what is available in your office or building. Companies don’t always have access to high-speed internet.

If a company’s servers are in the cloud, the bandwidth they use when they connect is at the data centre, not in their office. All the computing is done in that data centre. Some IaaS providers let you install your own development platforms and operating systems on your own, or they may provide Platform as a Service options as well.

The advanced modelling done by other companies — using the data that flows through data centres, has opened the door for companies to save even more. More data in the cloud means more data to analyse. Companies like Cloud Physics help other clients make sense of their data and how it behaves, insights that are used to “take the guesswork out of operational decisions.”

All things considered

Moving your infrastructure to the cloud comes with downsides and risks, ones that must be weighed against any potential benefits.

If you have less-than-stellar Internet in your office, this can impact the usability of cloud services.

There is also the constant risk of an outage or hardware failure at a remote data centre. When a data centre fails, so do the applications, servers or infrastructure it supports. Earlier this year, Amazon’s Web services had a hardware failure that lasted 49 minutes, impacting services like AirBnB, Vine and Instagram, which relied on the affected data centre in Northern Virginia.

The incident prompted questions about whether companies should spread their services among several data centres, instead of relying on just one. But even with the risk of an outage, the overall cost savings from IaaS could still pay for the outage, and make the whole thing worth it.

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  • Stuart Armstrong

    Agree, if DATA is THE ASSET for SMB’s (and all enterprises) as per IBM’s 2008 prediction that data would become a balance sheet asset then the owners should be verifying the security of these assets?.

    Having been in many enterprise data centers (er closets) including some large ones I have seen FEW that can compare to a Tier 3 or even a Tier 1 data center. Even the most basic ISP has a higher standard than 90% of SMB’s in Canada imho.

    So, out of the 120,000 Canadian SMBs with 20-249 employees and 1200 with over 1000 employees one would assume that thousands would have realized that hugging their servers, installing some backup and hoping a solar flare doesn’t knock out their local grid is not a good thing when the CEO/CFO starts reading IBM’s study etc. Or clients start demanding 24×7 uptime and strict compliance from SMB suppliers. My detailed database segmentation of the Ottawa enterprise market lists about 750-1000 companies who SHOULD be protecting all or part of their data assets and process in a professional data center vs. on premise.

    Yet, as per Rogers recent PR about buying Primus/Blackiron/Pivot/Granite etc. they claim about 840 clients in 14 data centers across Canada.

    While the Blackiron PR says about 4,000 clients across Canada;

    And AJ Byers, CEO Blackiron himself admitted a slow uptake in Ottawa market in a Ottawa Business Journal interview a few years ago.

    Every SMB owner, CEO needs a clear answer and road map to this event:

    “what happens to my data infrastructure assets and process if my data center provider goes bankrupt?”

    1) Rogers – Bell – Telus – IBM, etc. these are the names most SMB owners will recognize and trust as 24 x 7 custodians of their data assets and operational tools.
    2) Then SMB’s owners will consult with their historical trusted IT advisors- accounting ISVs (ie Sage ERP, Msoft CRM etc) or local VARs and PBX interconnects-some of whom have 30 year relationships and make great margins by selling and billing services collecting 100% of revenues versus an MRR monthly recurring revenue stream which sometimes goes 3 years. Why would a VAR embrace a business model that increase his balance sheet liabilities, possible puts him in violation of his bank loan covenants, pays him over 12-36 months at a lower GM and results in lower “account control”.

    But what about productivity improvements mentioned above and competitive issues vs. say US based competitors who are filling data centers by the thousands? Seems we are about 2 years behind. There is certainly a GAP as outlined by recent, ongoing studies from many experts.!

    Is this all bad news? No, it means that the best days for the IaaS market in Canada are still very much ahead if the US is any indication. Canadian SMBs are starting to realize that they are competing with the Global SMBs- who can scale up fast and virtual- such as Shopify or Halogen or Hootsuite.


    Stuart Armstrong

    • Shawn Freeman

      Great points Stuart, I agree that data will certainly be a balance sheet asset once we can figure out a way to put exact numbers on it, frankly it’s hard to put an exact blanket value on data due to the fact that it’s worth nothing if the right people don’t have access to it to make it work for them.

      You are certainly right that the next competitive advantage is how fast companies can scale.

      Thanks for reading!

      • Stuart Armstrong

        Shawn, thanks. Glad to contribute. Agree, the IBM data balance sheet asset concept is a bit far fetched- but its thought provoking for CFO/CEO’s who need to drill down and decide where and with whom to hold their data. IMHO in SMBs up to 150 employees-approx. the C levels are still “outsourcing” this risk mitigation to their trusted VAR/ISV,telco or vendor. regards, SA

  • Roxy Jones

    This is so interesting. I just read a blog post about how cloud computing is great for small businesses. I think its a great idea. Thank you for sharing. And here’s a link to the blog post I was talking about.

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  • Elena Girolamo

    better GlipMe than contactually for a SMB…

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  • Good work,thanks for sharing..

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  • ComZetta

    We entirely agree with the article! Moving IT Infrastructure to the cloud might be the best solution for companies. Thanks to solutions like cloud computer (for example our ComZetta), companies do not have to invest their capital in buying new equipment or developing current hardware.