Small Business: Cloud computing

Feeling a bit cloudy on what cloud computing actually is? Well, you're not alone.

A survey released in May by Zoomerang, an online polling company, found 72 percent of small and midsized business respondents didn't understand or know about the technology.

That doesn't mean many of them may not be using some form of cloud services, such as email, without realizing it, say experts. And if they aren't, chances are they will if they want to remain competitive.

Cloud computing refers to the delivery of information technology services by a secure network, most commonly the Internet.

"The cloud allows companies to be nimble, flexible and innovate faster," explains Marcia Kaufman, co-author of "Cloud Computing for Dummies" (Wiley; $29.99) and chief operating officer at Hurwitz & Associates, a technology consultancy in Needham, Mass.

This is because cloud computing allows you to buy and try out new services as needed without having to make heavy capital investments in technology and physical infrastructure (software, servers, etc.), she says.

Flexibility: "It's really about flexible pools of computing resources," says Kaufman, noting you can scale up or down as necessary and pay only for what you use. Services vary from email to data backup.

There are public or private cloud options. The former are shared by multiple users in a multitenant environment (i.e. Google Apps), and the latter are a "consolidated and efficient group of servers" used by a single organization for internal purposes, Kaufman notes.

For many small businesses the public option is more affordable. For instance, Google offers a variety of cloud-based email and office applications starting at $50 per user per year, says Paul Sperry, president of IDP Consulting in Jericho, an information and technology management firm that helps clients develop and implement cloud-based strategies.

On the other hand, IDP moved all IT operations for one client over to a private cloud costing more than $7,000 in monthly fees, he says, noting some companies in regulated industries may require a private cloud with special certifications.

Generally, the more applications a business moves to a cloud, the more savings it will realize, Sperry says, noting clouds have cut some of his clients' IT costs in half by eliminating equipment and on-site staff.

XT Group in East Meadow saved $30,000 by moving its customer relationship management to Autotask, a cloud-based program, rather than purchasing new servers and software, says XT co-founder Paul Trapani, who assists companies in developing cloud strategies. Instead, it spent about $2,000 up front and a $200 monthly fee on Autotask.

Cost savings: Similarly, Jim Kowalski, IT director at the Educational and Institutional Cooperative Service Inc. a Jericho-based buying cooperative servicing colleges and universities, says the company has realized annual IT cost savings of more than 25 percent. It has moved numerous services to the cloud including its Web and portal sites, and has eliminated more than a dozen servers, says Kowalski, who works with IDP. As part of its five-year plan, it will move its backup infrastructure and remote disaster recovery solutions to the cloud as well.

More businesses would move operations to the cloud if they understood it better, says Peter Goldsmith, president of the Long Island Software and Technology Network. "A lot of people are confused or scared." The network will hold an educational event on cloud computing Nov. 10, 8 to 11 a.m., at the Garden City Hotel, says Goldsmith.

The key is not to jump into the cloud without a plan, says Sperry. It may not make sense for every company. "You have to do your homework."

Fast Fact: According to a survey published in July by CompTIA, the top three uses among U.S. small and mid-size businesses for cloud computing were storage and backup (71 percent), email (62 percent) and document management (59 percent).