For Dan Drury, director of web effectiveness consultancy Bowen Craggs & Co, cloud hosting allows him to run a global business with little more than a WiFi connection – meaning he can effectively work anywhere. “I would pay 10 times more if that’s what it cost, because of the benefit to my business,” he says. “Our overheads are near zero because we’ve cut all physicality, including having an office. When you have your own hardware, you need someone to service it and look after it. Cloud hosting is simpler, cheaper and better. There’s no headache of employing an IT guy.”
The service of hardware can place significant financial burdens on growing businesses and the law of averages suggest that the more hardware you take on, the higher the likelihood of some kind of failure or it reaching the end of its lifespan.
Mike Weatherley, founder of web-based price management tool InsiteTrack, knows first-hand the time and financial cost of rebuilding your business from a server failure – following an incident which prompted him to adopt cloud hosting. “If you don’t want the expense of hardware, choose the cloud,” he says. “Over three or four years it might be cheaper to have your own server, but there are other factors.”
Indeed, for fast-growth businesses, hardware management and the demands of upsizing can distract from the activities that actually make your business money. “As soon as your business gets to any kind of scale, it becomes a really large problem having your own hardware. Offset that with the price of running a cloud and being relieved of that headache, and it becomes very attractive,” says Matt McNeill, CEO of cloud-based marketing services business Sign-up.to.
Cloud hosting can be particularly cost-effective for businesses with variable capacity requirements, as James Cutler, CEO of Emapsite, points out: “It’s good for businesses with a massive spike at a particular time of year, as you have a flexible infrastructure and can expand your capacity for a limited time.” He adds that in such instances, “using someone else’s cloud service has an immediate impact on the bottom line”.
McNeill, who was an early adopter of cloud hosting, uses VoIP and Google Docs to manage his fast-growth business and believes scalability is an important factor. “Cloud hosting makes sense if you’re going into other territories or have your sights on international expansion. Its flexibility is also useful when you don’t know how big you’re going to get.”
You can read parts one and two of this feature or read on to hear what small business owners think about the risks and realities of switching core operations to the cloud:
• Security issues and points to consider when cloud hosting
The views in this article were expressed at a lunch sponsored by Zunicore, the business-built cloud hosting provider owned by PEER 1