SMBs say “why bother” when it comes to on-premises hardware and software

The combination of the cloud, more sophisticated telecommunications and collaboration technology, and a renewed focus on a business model that keeps core functions in-house and outsources the rest, has given SMBs a whole new attitude.

One thing this convergence of factors has caused, is a concentration of talent. The most highly skilled IT workers, admins and network engineers are going to go to where the biggest, baddest, state-of-the-art data centres are, and that is with the cloud providers. SMBs, whose budgets are tighter, can’t afford the best talent, and fortunately, they don’t need to. Very small businesses are in an even more tenuous position, often unable to afford even a single full-time IT person—but once again, they no longer need it.

Anthony Banek points out in his blog that the cloud services market last year for SMBs in the US hit US$8.6 billion, with 80 percent of that being attributed to small businesses with fewer than 100 employees.

Another interesting trend is that cloud providers are starting to branch out, offering more services; and the big players like Microsoft and Google are getting a piece of the action. And what is making the cloud even more widely accepted, isn’t the fact that the technology is mature (which it is), it’s that the money people are stepping up to the plate. For example, GoDaddy, one of the largest providers of in-the-cloud web hosting services, was recently bought by private equity investors. On one hand, when Internet companies get sold by their founders, who have often created a “cult of the personality” around their companies, the acquiring venture capitalists tend to dampen the enthusiasm a bit. But, at the same time, having access to that type of deep experience, not to mention deep pockets, can’t be all bad for the future development of companies that focus on the cloud.

The eventual commoditisation of the cloud will lead to two things: Increasingly better and more accessible cloud technology, and more support for SMBs that will lead to a new wave of entrepreneurship and innovation. The cloud after all, gives small businesses a new level of access that has never before been possible. All those dotcoms in the ’90s that sucked up tens of millions of pounds in venture capital did so because they all had to build out their data centres and infrastructures from scratch. Today, a start-up can accomplish the same thing with a fraction of that funding, and that fact alone has pushed us to the brink of the next wave of innovation—the dot-cloud boom.