When you work at the #1 Cloud Computing company in the world, its easy to take for granted that everyone understands the benefits of the cloud. After all, we’re closing in on the end of 2018 and by now 96% of enterprises are using the cloud. We know from multiple studies that businesses adopting cloud technology tend to grow their earnings significantly more than their competitors who don’t. With small and medium-sized businesses needing all the help they can get to compete with the big dogs, moving to the cloud should be a classic “no brainer”, right?
Yet a recent Microsoft study of small and medium-sized businesses (SMBs) showed cloud adoption to be significantly behind that of larger companies, with only 78% to have adopted cloud computing by 2020. Yes, surveys show that SMBs are increasingly using cloud productivity applications like Office 365. But key business applications like their accounting or ERP solutions often remain deployed on premises. And that impacts their ability to compete in today’s cloud-first world.
Many businesses are still confused about what ‘the cloud’ is, exactly how it functions as well as what it can do for them. Others are keeping their current on-premises accounting or ERP software because of their historical investment of time and money (the “sunk cost fallacy”) and the impulse to “go with what you know” – even if current systems are costly and painful to maintain. Lastly, some SMBs are still worried about security.
Whatever the reasons, it appears the question “Why move to the cloud?” still needs to be answered for many small businesses. So here some answers:
Want the TL;DR? More Profit
SMBs that move to the cloud just make more money. Research points to 25 percent growth in revenue and more than double the profits compared with “cloud skeptics.” Embracing the cloud is a proven path to faster growth, and that alone is a compelling reason for businesses to make the move. Need more than that? Read on…
Reduced CapEx
The high cost of hardware and software licenses for some projects like ERP software implementations can make them very painful for small businesses to take on with the traditional on-premise approach. The cloud subscription model eliminates these up-front capital expenditures, and can let you take on critical projects without a big hit to your cash flow. That’s good for business.
Lower Costs
Beyond the CapEx benefits, there are a number of ways moving to the cloud can cut costs. You no longer have to pay someone (or a team of people) to install and update software, setup and manage servers, run backups, manage infrastructure, etc. You’ll save on software upgrade fees, on power and cooling costs, and you’ll eliminate wasteful spending on computing resources that you’re not fully utilizing.
Greater Business Flexibility
Cloud software allows small businesses to operate at any time from any location. In a mobile-first/cloud-first world, the ability to work where you are on any phone, tablet, or laptop means the flexibility to respond more quickly to changing information and business needs. And that means more agile operations and happier customers.
More IT Value
With the hassle and cost of IT maintenance tasks offloaded to the cloud, your IT resources can focus on more strategic tasks like addressing problems, improving the user experience, fostering user adoption and best practices, and getting more value out of your systems and processes.
Automatic Software Updates
With cloud computing, not only are your servers off-premise, regular software updates are handled for you. Your critical systems can always have the latest functionality and security updates without you maintaining them yourself, so you get the maximum benefit from your vendors’ ongoing R&D investments without any additional cost or effort on your part – you can focus on growing the business instead.
Improved Security
Small businesses are the most common victims of security breaches. Cyberthreats are an ever-present danger, and most SMBs simply don’t have the people, money, or time required to keep up with the constantly changing security landscape and adequately protect their business. In a recent study by ComScore, over 40% of small businesses were worried about data security before moving to the cloud, but after making the switch 94% of businesses reported security benefits they had been unable to achieve with their on-premise resources. For businesses that choose the world’s most trusted cloud, the benefits are even greater.
Cost-Effective (and eco-friendly) Scalability
With the cloud, businesses have increased flexibility to grow and scale without hassle. As you add users, generate more transactions, or add more data, cloud services dynamically scale to manage the workload. As your business grows, you won’t need to pay for more hardware or maintenance to support that growth.
As a bonus, the cloud’s dynamic scaling is good for the environment too. Your business only uses the energy you need for your cloud apps, and no more. Since servers aren’t running idle waiting for when they’ll be utilized, operations are more energy efficient and your business’s carbon footprint is reduced. Cloud providers like Microsoft are also making big investments in environmental sustainability.
Improved Collaboration and Productivity
The opportunity to collaborate more effectively and remove data silos in your company translates to greater employee productivity. Many of today’s cloud services offer collaboration capabilities that can’t be matched by on-premise software. And when you standardize on a few key vendors the benefits are multiplied. When a comprehensive cloud-based office productivity suite and cloud-based all-in-one business management solution can work better together, the productivity gains can be transformative for small businesses.
Happier Employees
Telecommuting is becoming an important perk, and its especially valued by Millennials. In one recent study 77% of workers said they’d be more likely to accept a job offer if they knew they could telecommute at least some of the time. With cloud computing your employees can work from anywhere, so your business can offer flexible working arrangements that create work/life balance and happier employees without sacrificing productivity.
Easier Software Integration
Cloud applications tend to expose Application Programming Interfaces (APIs) that let you integrate much more easily, and automation tools like Microsoft Flow let you easily stich them together without any custom code. You’ll be able to connect your data and systems like never before and gain new levels of speed and efficiency.
Protection Against Data Loss
Laptops get lost and stolen all the time. Beyond the cost of replacing them, there is the cost of losing important or sensitive data. When storing and backing up data in the cloud, your data is there no matter what happens to your devices.
Increased Competitiveness
Cloud technology is the great equalizer. Moving to the cloud gives small and medium-sized businesses access to enterprise-class technologies that were previously out of reach. You can run on the exact same systems used by the largest, most sophisticated companies in the world. Running in the cloud allows SMBs to act more quickly than competitors who are managing legacy on-premise systems. Hey, you don’t hear about “disruptors” that aren’t making heavy use of the cloud – it’s one of the most valuable tools an SMB has to gain a competitive edge.
Return on Investment
Overall, cloud deployments provide greater return on investment than traditional on-premise software projects, and this is especially true of cloud ERP or CRM projects. In fact, Nucleus Research analyzed the ROI of Microsoft Dynamics 365 and determined that companies using Dynamics 365 see an eye-popping $16.97 of return for every $1 spent, well above the average for cloud ERP/CRM applications. Those results are hard to ignore.
Ready for the cloud yet?
Cloud computing can let small and medium-sized businesses access their data and applications from anywhere at anytime, with any mobile device, while helping them grow their revenues and shrink their costs. As you can see, the benefits of moving operations to the cloud are tremendous. Conversely, the cost of not moving may be the very ability to compete in our increasingly digital, mobile world.
With cloud software now available that is purpose-built for SMBs to run their sales, marketing, service, accounting, operations, supply chain, and project management all from a single, connected solution infused with AI and advanced analytics, there’s never been a better time for small and medium-sized businesses to make the move to the cloud.