August 21, 2009
Cloud computing for business - the economic case
Every business executive and technology editor I know is talking about the benefits of cloud computing. But what is it, what does it really mean for business and what are the monetary and obvious benefits?
Cloud means Internet. The computing takes place on the Internet – in place of the software you use executing on your computer, it’s hosted on the Internet on a server located in a data centre usually staffed by people who are proficient in managing technology. This type of “cloud” software is often referred to as “on demand” or Software as a Service (SaaS).
Some well known examples of well established Software as a Service are:
Web based CRM Software (Customer Relationship Management) – Salesforce.com pricing about $9 per user/month.
Small business management and accounting software (small business ERP) – Salesorder.com pricing $45 per user/month.
Medium sized business ERP software – NetSuite pricing about $99 per user/month.
There are 3 major benefits for every business here:
Time, cost savings and reliability
Businesses no longer need a permanent IT expert to help them select, implement and manage the systems platform thus cutting operating costs and time to implement. The burden of regularly backing up information is eradicated as this is usually an inherent function of the “cloud” software. Cloud software “operators” normally have redundant systems that can be brought to bear in seconds should a catastrophic error occur.
Easier selection and more choice
Using a web browser, businesses now have instant access to hundreds of business software they can in the majority of cases immediately appraise and effectively work out if the software fulfils their needs at minimal expense. This makes it simple for innovators in large businesses to circumvent the common information technology purchasing processes and easily assess and prove their business proposal.
Better user experience
The cloud provides immediate feedback to software vendors and has fuelled significant progress in user interface design resulting in more intuitive systems thus improving learning times and increasing user satisfaction. This of course means faster adoption and higher productivity.
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