The Open Group, a global consortium that aims to help businesses achieve objectives through IT standards, has published an extensive guide to cloud computing for small to medium sized enterprises (SMEs) in a bid to provide clarity on what services should be deployed in an over-crowded cloud marketplace.
‘Maximising the Value of Cloud for Small-Medium Enterprises’ defines an SME in the UK as a company with fewer than 250 employees and earning less than £29.5 million.
The report argues that cloud computing can help solve some of the traditional problems facing SMEs today.
“From experience, many businesses, irrespective of their size, lack business-IT alignment; hence IT planning becomes a matter of trying to hit a moving target. To make matters worse, small businesses struggle with a lack of skilled IT personnel, operational insufficiencies, and poor IT management,” the Open Group said.
"Cloud computing won’t be the answer to all of the above. But it can help simplify IT so that SMEs stay business-focused."
The Open Group believes that to overcome the IT-business alignment problem, IT departments should move away from being reactive, whereby they take time to respond to requests for IT services from the business, and instead offer the business a pre-defined catalogue of IT services that could be provisioned quickly and easily.
However, developing an 'off-the-shelf' catalogue of IT services in house is costly and requires a significant investment in capital and time. As such, cloud computing becomes an interesting option for SMEs.
The report states: "Instead of internally building these services upfront, why not source these services from somewhere else? The service provider can work with an economy-of-scale effect not available at the individual SME level and serve hundreds of SMEs."
"IT organisations of SMEs should consider the idea of becoming an IT service broker where services are provided to consumers through a pay-per-use arrangement and an as needed business model while sourced from outside from cloud service providers."
The Open Group believes that the cloud computing model can also help SMEs attract additional revenue. By sourcing IT services from outside the organisation, SMEs benefit from a reduced time-to-market, which will gain them new customers that might have gone to competitors previously, and in turn prevents those competitors from becoming stronger, it said.
It also points to the benefits of moving from capital expenditure (CapEx) to operational expenditure (OpEx), when procuring IT services from the cloud.
"IT organisations don’t have to invest in IT assets anymore, but instead ‘rent’ them from cloud service providers. But only as long as they are needed by the consumers," reads the report.
"Reducing and/or optimising costs is the keyword here, and the adoption of cloud computing can support this objective."
Despite the benefits of the cloud for the SME market, The Open Group does also highlight that organisations need to consider the security implications when adopting cloud as a delivery model.
It asks SMEs to consider: What if IT Organisations decide to decommission the cloud services? How will data be transferred from the cloud service provider back in-house or to another service provider? How has access to sensitive data? SMEs are responsible for security and data integrity, but are the cloud providers willing to undergo external audits and certifications? Is data being segregated properly?
"This guide reminds us that, with cloud, smaller budgets are no longer a hindrance to a SME’s ability to compete in the market. This is because, with cloud, instead of SMBs operating workloads such as desktops, storage and communications through physical in-house servers, they are hosted on centralised virtual servers in a data centre which means the cost of investments is more affordable; the deployment and set-up times are rapid and less complicated than traditional configurations; and solutions are more scalable, secure and agile," the consortium concluded.