Have You Adopted Small Business Cloud Computing?

Laurie McCabe is a small business technology analyst, and a partner with consulting, research and analyst firm Hurwitz & Associates. I recently shared Laurie’s small business technology predictions for the year, and now I’d like to share an interview with her in which we discuss cloud computing for small businesses.

Chris Crum: How much business adoption of cloud computing do you see occurring over the year?

Laurie McCabe: Cloud computing aka SaaS or on demand computing should gain a lot of momentum. SaaS applications are now mature (many SaaS vendors–sf.com, Omniture, Taleo, SuccessFactors, NetSuite are now public), and big vendors (Microsoft, IBM, Google, etc.) have solid offerings. SaaS pay as you go subscription model should also be appealing to companies facing  economic pressure and uncertainty. With SaaS,  they can adjust subscriptions and fees based on the number of users, transactions, etc. SaaS vendors also provide support and service as part of the package, off-loading this burden from IT staff, who are likely to be stretched thin in this environment.

CC: How do you see the cloud computing trend affecting small businesses in particular?

LM: More SaaS apps targeted to small business requirements are available than ever. Many are free/low cost to get started. Many small businesses and particularly startups (esp. people getting laid off that strike out on their own) will be bootstrapping their new businesses on a shoestring, and free/low cost services will save them money.

Many SaaS apps are now  developed specifically for small businesses are easy to learn to use. Zoho, Google Apps, Echosign, Freshbooks are all good examples of some SaaS apps that you can start getting productive with immediately.

CC: What kind of money can businesses save by going the cloud computing route?

LM: Of course it depends on what SaaS application you’re comparing to what packaged application. Some SaaS apps are completely free, some are free up till a certain number of users. So for instnace, you can use Google Apps or Zoho apps instead of Microsoft Office and save hundreds of dollars per user.

CC: How much of a concern is security when it comes to cloud computing?

LM: Most SaaS vendors can offer most small businesses a much higher level of security than the small business could provide for itself. For instance, many small businsses don’t regularly backup files, and their server may be next to the coffee maker! That said, businesses should ask vendors for written documentation about the security measures and standards that they adhere to. Reputable vendors make this information readily available.

CC: Google has given a 99.9% up-time guarantee for some of its apps. Do you think Google has an edge in cloud computing over other providers?

LM: Google has a big edge over smaller companies in terms of brand awareness, and its search traffic, etc. However they don’t offer everything, and their offerings aren’t always the best fit for a given customer. There are lots of SaaS choices in almost every application area.  Most at least offer a free trial. Try at least 2 or 3 in a category to make sure that you pick one that will work well for you.

CC: What providers do you think offer the best cloud solutions for businesses?

LM: There are so many, in so many application categories, its hard to say.

CC: How much of a role do you think data portability in the form of services like Facebook Connect, OpenID, Google Friend Connect, etc. will play in small business over the year?

LM: This will become VERY important. Most peope–businesses or consumer–don’t want to have to re-enter info in different places. With social networking booming, this is a critical need.

I’d like to thank Laurie for taking the time to discuss cloud computing with me for the SmallBusinessNewz audience. She also has a poll going on you may be interested in participating in about the top thing you must do for your small business in 2009.