In recent years, companies of all sizes have begun using cloud-based software and applications to store information, run their operations, and even manage their IT infrastructure. If you run a small to medium-sized business, you might be hesitant to make a digital migration. A change like that incurs costs, both upfront and down the road. However, cloud computing promises to save businesses money in terms of physical storage space, hardware, and IT staffing costs. For large, enterprise businesses, the cloud may be an obvious choice. However, as an SMB, you probably approach financial decisions cautiously. Let’s look at the financial upsides and down sides to migrating to the cloud for SMBs.

Cost of Maintaining Your Own Software vs. SaaS

When you buy software and install in on your office computers, you own it. When that software gets out of date, it’s up to you to upgrade or replace it. If you have multiple devices that need new software, that can get expensive. However, with SaaS (software as a service) you pay only for the ability to use the software. Backups and updates to the cloud happen automatically and regularly. That eliminates the need for a staff person to handle these rote tasks. You avoid the cost of buying all new software when it becomes obsolete.

Security Considerations

When you switch to the cloud, do your homework with regard to security. Depending on the cloud service provider, they can encrypt the information to make sure that, if it does somehow fall into the wrong hands, it will be hard to use. This is important especially if you handle people’s sensitive information.

Data loss is another potential costly mistake for your business. Using the cloud cuts down on the risk of data loss because of how frequently information uploaded to the cloud is backed up.

A security breach or major data loss could cost your customers’ trust and their business. You may lose money not only money but your entire business. Weigh the upfront investment against the potential risk.

Global Accessibility

A significant perk of the cloud means you can access your network whether you’re in the office, working from home, or on a business trip. You could reduce overhead by allowing employees to work remotely. You can also respond to customer requests more quickly, providing a better customer experience. These benefits can add up to increased business.

Many people use their smartphones or tablets when working away from the office. Make sure that any apps associated with the cloud service you’re using are optimized for mobile usage. If it doesn’t, it could cost you in terms of customer experience as well as employee satisfaction.

Cost of Cloud Computing Over Time

Balance notes that switching to the cloud may be an effective cost-saving measure at first. But, keep in mind that you’re technically renting space on the cloud versus outright owning space. If you end up using more space on the cloud than you initially bought and paid for, you may need an upgrade, at additional expense.

If you choose to invest in a cloud solution, think long-term and make sure it’s scalable.

Less Than Stellar Customer Service

You provide your clients with the best levels of customer service. You also expect that same level of customer service from any businesses you associate with it. Some cloud plans have strict rules on when, or even if, you’re able to talk with a customer service rep should something go wrong. If you’re on a time crunch and something happens with your cloud services, you don’t have time to wait around for a customer service rep to get back to you to help solve your problems.

Converting to the cloud can be beneficial for your business. However, cloud computing comes with costs and possible adjustment challenges. As with anything, if you’re considering making a big change to the way you do work, explore all of your options and weigh multiple cost scenarios.

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