Cloud Hosting. Small and Mid-market Businesses Achieve Tremendous Benefit From Cloud Services

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1 Consider the challenges small to mid-size organizations typically face, and how well those challenges map to cloud computing strengths: Maximizing ROI. Smaller budgets mean every dollar spent must generate as much business value as possible. The same argument is true of other key resources such as staff headcount and time. Maintaining core business focus. Small organizations that offer more specialized services must also focus on the value they create for customers. Complex IT infrastructures, on the other hand, often demand so much ongoing management that they amount to a distraction, particularly when major investments are required (such as moving to new software or hardware platforms). Innovation. To compete in today s challenging business climate, innovation is critical; yet if an IT infrastructure requires too great an initial investment, organizations may be reluctant to deploy it, choking off the innovation they might otherwise have achieved. Responding to changing business needs. Organizations that are smaller typically lack the resources needed to quickly scale their services up (or down) based on changing workloads. Security. Core IT resources must be as fully shielded from as many threats as possible and must include backup, archiving, and restoration capabilities. A relatively small IT budget makes taking the necessary security steps harder to achieve. Compliance. This is a constant and growing challenge most organizations would prefer to outsource completely, if that were possible. Industry trends. When new technologies and best practices emerge, organizations need to be fully prepared to leverage them for the highest value. Staff turnover. Because IT headcount is relatively low, each team member s importance is relatively high. And when key staff leave, they often take crucial skills and native intelligence with them. Small and Mid-market Businesses Achieve Tremendous Benefit From Cloud Services Author: Mike Salviski CLOUD COMPUTING DRAMATICALLY IMPROVES SMB AGILITY AND FLEXIBILITY For small and mid-market businesses, keeping IT nimble is more than a goal it s a competitive mandate. The faster and more flexibly they can adapt to market changes and implement new strategies, the better the business outcome they ll get. That s why so many in the SMB space are turning to cloud computing. Though commonly associated with enterprise-class organizations, the cloud model is equally as good a fit for small and mid-sized businesses allowing them to accomplish more, faster, with fewer resources thus outmaneuvering their competition. VIRTUALIZATION AND SCALABILITY DRIVE THE CLOUD S NEXT-GENERATION CAPABILITIES FOR THE SMB At a basic technological level, clouds generate these tremendous benefits via two mechanisms: virtualization and scalability. To understand virtualization, begin by considering conventional system resources such as storage, memory, and processing power. On a traditional IT system, these resources are tied to specific hardware, and only available to the applications/services running on that hardware. The result is that resources cannot be shared across systems and are frequently wasted. They are also typically over allocated to each system (e.g. an -only server), mainly to support periods of peak demand that occur infrequently. Virtualization changes all of this for the better. Through virtualization, resources can be fluidly allocated wherever and whenever they re required, improving the overall performance and uptime of all services. Not to mention, better budget allocation. How does this relate to clouds and how they benefit the SMB? Cloud architectures take virtualization to the next level by enabling real-time scaling of computing capacity. This allows cloud providers to offer cost-reduced computing for smaller computing needs and quick scaling if more computing is needed. The SMB benefits from both the cost savings realized by not over-buying, as well as the flexibility to immediately obtain more computing capacity when needed.

2 In a cloud, resources like storage, processing power, memory, and even network bandwidth can be easily allocated to different applications running on an organization s virtual servers. Should any IT service experience an unexpected spike, the organization can easily reallocate or add the necessary resources to support the higher demand level. Then, when the spike ends, those resources can be turned off or reassigned as necessary to other services running in the cloud. A WEALTH OF COMPELLING BUSINESS BENEFITS All of these technological capabilities translate very well into real-world business benefits. Business agility and flexibility will significantly improve. Instead of having to manage IT assets like systems and storage, small and mid-market organizations can focus directly on customer needs and the strategies used to fulfill those needs. When IT changes are necessary to support those strategies, they can typically be implemented in minutes, simply by changing business policies not in weeks or months, by buying, deploying, configuring, and integrating new hardware or software. This accelerated response to changing market conditions leaves the small/mid-market organization in a far more competitive position. Operational costs also typically fall. This is because clouds are such optimized, efficient platforms that the cloud hosting provider can offer their services at significantly lower costs than unvirtualized on-premises servers. This is a business model that turns out to map very closely to the needs of small and mid-market organizations. It doesn t require capital expenditure or any other significant initial investment, and it only climbs when the organization needs to scale additional resources. Other types of costs also fall. There is no need for an organization to refresh its hardware or software periodically to support services running in the cloud because that s now the responsibility of the cloud provider. The labor cost associated with IT management falls for the same reason. A more efficient IT department emerges. Because IT team members don t need to perform everyday functions like provisioning virtual servers or installing security patches, they can focus more directly on higher-priority tasks that yield more business value (such as creating entirely new, in-demand services). This empowers the organization to pursue its core mission more quickly and competitively. Instant Scalability Entirely new virtual servers are routinely provisioned via an online portal to mirror other virtual servers already deployed. They can also be created from scratch to support new applications. Each can be created, provisioned, and secured with dramatically greater speed and consistency than any manual process could possibly yield, typically in a matter of minutes. And over time, the cloud will also automatically address key functions of each virtual server s lifecycle, including patch provisioning, reconfiguration, rebooting, data/application backup, and other necessary tasks always in accordance with proven best practices. And that s true for both internal IT services, such as /calendaring, and external services, such as customer-facing online stores. In both cases, the cloud creates more business value, at lower cost, than the organization could likely have achieved using its own infrastructure even with a much higher IT budget. In addition, the SMB gains a technology advantage from the cloud provider through maximized scalability and computing performance.

3 The risk of innovation also declines. This is because the organization can experiment with new services more easily and rapidly, observing what works and what doesn t, due to the fact that each such experiment costs relatively little (in both an initial and an ongoing sense). The experiments that work can be scaled up to support the discovered demand for them; the experiments that don t work, can simply be discontinued. Cloud computing offers a fundamentally different approach that addresses many of the challenges facing small to mid-size organizations. The process of scaling IT services is also dramatically easier and faster in a cloud than it would have been in a private infrastructure. Over time, as demand levels rise and fall, the organization can reallocate cloud resources and create or eliminate virtual servers in parallel with that demand an architecture that can be easily and accurately right-sized. All of these benefits help make the small/mid-market organization much more agile and responsive to the needs and interests of its customers. It can focus directly on creating and implementing business strategies without worrying about the underlying technical resources needed, their costs, or their ongoing management. IMPLEMENTING BEST PRACTICES FOR A SUCCESSFUL CLOUD TRANSITION Not all cloud hosting providers are created equal and not all cloud customers get equal results. Therefore, it will be important to make good use of the available best practices. For instance, organizations will need to develop a specific cloud migration strategy, which we can loosely define as a prioritized sequence of steps that identifies the major variables. Common steps for many small/mid-market organizations include: Weighing security/compliance issues. Leading cloud hosting providers can actually improve an organization s security posture. They can also simplify the process of achieving regulation compliance and proving compliance in the event of an audit. Selecting cloud-friendly applications/services. Many IT services are well suited to the cloud commonplace examples include collaboration services, marketing, and outward-facing company websites and applications. Some services, however, may need to remain under direct company control, such as those involving the most proprietary business data. By out-tasking key IT responsibilities to a trusted cloud provider, smaller organizations not only reduce IT costs, but also increase agility allowing them to take advantage of the latest innovations, security protections, and compliance best practices of the competitive cloud industry. They can use the flexibility of the cloud provider to leverage IT and out-pace their less agile competition. The power of the cloud industry provides smaller organizations with the technology they need to gain a competitive advantage.

4 Cleaning data. By identifying and removing unnecessary or outdated data, you can accelerate the cloud migration process and lower ongoing storage costs. Assigning responsibilities to appropriate team members so that the service migration process is as smooth and efficient as possible. Creating a secure network link to the cloud hosting provider. Creating new instances of IT services in the cloud, including all necessary virtual servers. Migrating data and applications to the cloud. Enabling the cloud instances, redirecting service requests there, and disabling the local instances. And, of course, it is also necessary to choose the best possible cloud hosting provider. Organizations need to weigh a number of specific considerations with respect to business goals. The chosen cloud hosting provider must have the range of technical capabilities, scalability, pricing structure, proven history of successful customer engagements, and other factors the business is looking for. In particular, businesses might want to consider: Certification status. Certified cloud hosting providers typically offer the highest levels of business resilience, security, and performance. Number of data centers. A cloud provider that has multiple data centers can utilize them strategically to minimize performance issues and increase scalability, while also replicating data across them to protect that data better. Network resources. Since the cloud is offsite, the fastest, most stable connection is desirable this might include private IP services instead of less secure Internet services. Ongoing support. The best cloud hosts offer 24/7/365 support for their customers via dedicated experts with deep experience in cloud architectures. And don t forget about enduser experiences if IT staff is also responsible for providing help desk support. This can also be outsourced to the cloud hosting provider.

5 Management complexity. If the cloud provider uses the same underlying virtualization environment, managing new cloud services probably won t require an IT team to learn new administrative tools or master a new interface. In fact, all clouds in the same environment can operate securely and seamlessly, and an IT team can manage all services the same way, regardless of where those services happen to be executing.

6 To learn more about how Prime can help your organization to mitigate risk: Call: Visit: SUMMARY Cloud hosting offers an outstanding opportunity for small and midmarket organizations to become more agile, more flexible, and more competitive. While the enterprise can take advantage of the cloud as well, cloud technology fits the nimbleness of small and midmarket organizations, transforming them into potential IT powerhouses equipped to use technology for increased market competitiveness. By outsourcing some or all of their IT services to a trusted cloud provider, these organizations can focus more directly on their core mission the value they create for customers instead of the details of the technical infrastructure used to create that value. And because many IT costs also typically fall, they ll be able to maximize the ROI they get from IT expenditures a critical goal in today s challenging business climate.