I read an article today on Forbes today about ‘Why Cloud Computing Matters to Small Biz’ and it reminded my about a story from my past that supports the point made in the article.

About 8 years ago a partner and I put together plan to start  what would be now be called a cloud application.  (Back then the term “cloud” hadn’t been coined in its current form, so it was just a “web-based” application.) As part of this project, I had to put together a business plan which included hardware and networking expenditures. Obviously, for a ‘web-based application’ we needed servers, network infrastructure, a fractional T3 (pipe to the web). Those costs were significant; they included $25,000 in servers, $2000 in network infrastructure and, $5000 per month for Internet, and this didn’t even include rent for a place to keep it all. And for all that, there was no redundancy, and every 5 new customers we would have to outlay another $10,000 for more servers. This was  lot of money for 2 guys without jobs to come up with.

To do the same thing  today, I can go to GoGrid, Force.com, Amazon web services or any other cloud based infrastructure provider, and set it up for a fraction of the cost. On top of that,  the costs are completely tied to usage so I don’t have to outlay a lot of funds up front while I wait for my  customers’ monthly fees to cover the cost.  (Great for cash flow!!). In addition I have, backups, redundancy,  and network bandwidth that can grow with the business.

Needless to say, the cloud creates opportunities for business that just a few years ago were out of reach. (By the way, that business never got off the drawing board for a multitude of reasons)

How do you think the cloud can help or hurt small business ?