Cloud computing technologies are the new buzzword in today’s business environment and it seems that the cloud hosting technologies are accepted in a big way by the enterprises. Some market reports suggest that by 2012 50% of the enterprises in United States will be using the cloud technologies as their primary IT resource. Also some market surveys point out that it is the medium business rather than the smaller enterprises or their bigger counterparts that have adopted the cloud hosting technology comprehensively and have taken a decisive lead in this technology domain.

So the Question arises:

1. What are the implications of cloud hosting technology for small business?

2. And what does the small business tend to lose if they miss out on the cloud bandwagon?

The major implications or advantages for small business regarding the adoption of cloud hosting technologies can be summed up as costs reduction in owning and managing IT infrastructure, bridging the technology access gap between small business and big enterprises and finally easy scalability of the IT resources.

The IT infrastructure factor: due to small size and resources of the small business, setting up the IT infrastructure may involve huge costs in terms of financial resources and personnel are which might have been allocated elsewhere in improving business focus. Besides the rate of obsoleteness of technology infrastructure is also high which means that the IT infrastructure costs becomes recurring in nature which means frequent costs involved for small business, for example in server, system and security upgrades.

Cloud hosting, in turn, provides a readymade IT infrastructure, setup at a short notice, on a pay as you go model. Thus what it means is that, the enterprise Rents out IT infrastructure from the internet cloud and outsources the management of the IT infrastructure to third party experts at a definite costs without any long term liabilities involved. In a way cloud hosting turns the “Fixed capital investments” into “variable operational” costs.

Another implication is regarding the IT infrastructure management. With cloud hosting platforms the small business no longer needs to invest in having dedicated IT staff for infrastructure management and troubleshooting as these services comes included in the cloud hosting packages.

Problem of unutilized IT resources: Having locally enabled IT infrastructure means that a small business has to take into account the future business needs and hence need to provision for future IT needs. Thus the problem of Unutilized IT resources arises which incidentally be a drain on small business scarce resources.
Cloud hosting refers to on-demand scalable IT resources which involves no risk on the part of enterprises. Thus cloud computing virtual platforms means that unlimited IT infrastructure can be setup within minimum time at no additional costs solving the scalability issues for the small business. 

What does the small business tend to lose if they do not adopt the cloud technology?
IT infrastructure costs and scalability issues notwithstanding, there are other issues that small business must consider regarding the cloud hosting technologies. They are:

Technology divide: Cloud computing technologies ensure that the small business has the access to the latest technologies without actually having to invest in development to those technologies. Also since the technology is available as a rented service, it ensures that the barriers to entry of small business to accessing high end technology are removed by the cloud hosting services.

Collaboration and sharing:  The importance of cloud hosting technologies for small business is also crucial as they provide anywhere anytime accessibility to the applications which is very important for real time collaboration and sharing.  Always on accessibility and multiuser sharing is the thing required in today’s globalised business environment which may be important for using geographically disperses clients and catering to the clients in more proactive way.