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Avoiding The Cloud May Be Costing Your Business More Than You Think

How cloud computing is transforming small businesses

The cloud has evolved beyond being a mere choice—it is now a necessity for businesses striving to excel and remain competitive in an ever-changing digital ecosystem.

In the ever-evolving landscape of business technology, one common misconception has persisted for far too long: that moving to the cloud is an expensive endeavor. Many small and medium-sized businesses have been reluctant to explore the possibilities of cloud-based services due to the misconception of high costs.   

This misconception can stem from the initial fear of transitioning to a cloud-based infrastructure. SMBs may assume that maintaining in-house IT teams and traditional systems is more cost-effective—but this view doesn’t account for the bigger picture.

Avoiding the cloud may raise costs

According to a Microsoft survey, SMBs typically allocate a substantial portion of their total revenue, more than 10%, to IT-related expenses. This can be a drain on financial resources that might otherwise be channeled strategically toward expansion and innovation. Further, even when they have full-time IT staff, 45% of SMBs rely on external support for their technology needs.

Cloud solutions can serve as a centralized hub, empowering organizations to streamline processes, minimize operating costs, and focus on the core objective of business growth. Cloud service providers also shoulder the responsibility of managing the underlying infrastructure, thereby diminishing the imperative for maintaining extensive in-house IT teams. Consequently, businesses can optimize resource allocation and redirect their workforce toward strategic pursuits, such as enhancing customer experiences, developing new products, or expanding into new markets.  

Security risks in the cloud 

Cybersecurity is an ever-increasing concern for businesses of all sizes. The threat of hacking and ransomware attacks is real, and SMBs are not exempt from these dangers. Statistics show that SMBs are increasingly becoming targets for cyberattacks due to their perceived vulnerabilities, according to Verizon’s 2023 Data Breach Investigations Report.   

The cost of recovering from such attacks can be overwhelming and can cripple smaller businesses. According to Verizon, 95% of cybersecurity incidents at SMBs cost between $826 and $653,587.The total financial impact of a security breach can extend beyond recovery costs, resulting in reputational damage, loss of customer trust, and potential legal consequences—all of which carry significant financial implications.  

Cloud providers invest heavily in protecting their infrastructure to reduce the risk of security breaches. SMBs can take advantage of these robust security measures without the need for substantial additional investment.  

Comparing costs

Maintaining in-house teams comes with a host of challenges. SMBs must handle recruitment, training, and managing personnel while ensuring they possess the necessary skills to handle complex and evolving technology. This is why the costs of hiring, salaries, and benefits for in-house IT teams can be significant. For SMBs, these costs can be a large portion of the budget, making it difficult to allocate resources to other critical areas.  

Let’s examine some industry data to shed light on the savings and growth associated with transitioning to the cloud:  

  • For the average SMB, cloud services deliver a 36% cost savings by reducing the need for physical hardware and software and eliminating the need for IT personnel and infrastructure maintenance.
  • By reducing manual processing costs and month-end invoice processing time, automating ordering, and eliminating on-premises servers and manual inventory processes, cloud services can save SMBs up to $45,000 each year.
  • SMBs typically spend 5% to 20% of their total IT budget on security; using cloud security can save SMBs up to $1,000 per month.
  • Companies that adopt cloud technology experience 2.3% to 6.9% higher revenue growth than businesses that do not migrate to the cloud.

How SMBs can get started with cloud adoption 

For businesses just beginning their cloud exploration journey, it’s essential to know where to start. To make the transition as seamless and effective as possible, there are three essential elements to get right. Consider the following for a successful cloud adoption strategy to harness the full potential of the cloud to meet your unique business needs.  

1. Evaluate cloud service providers

Selecting the right cloud service provider is crucial, but with so many options, it can be daunting. Ask these key questions to find the strongest candidates:

  • Can the provider scale resources up and down as your needs change?
  • What is the provider’s track record for uptime and performance?
  • Where are the provider’s data centers physically located and how does it impact latency, data sovereignty, and compliance issues?   

2. Create a clear migration strategy 

Transitioning to the cloud is a complex process that necessitates careful planning and execution, and SMBs often underestimate the significance of a well-defined migration strategy. Clear objectives should be set for data security, cost management, training and change management, and backup and disaster recovery.  

3. Gain employee buy-in through training

Employees should be comfortable with the new technology for it to be effective. It’s important to develop and implement comprehensive training programs that cater to employees at all levels and roles within an organization. Ensuring training is ongoing helps promote hands-on learning and practical experience and encourages employees to ask questions.   

The cloud offers a cost-effective and secure solution that can propel businesses forward in today’s digital world; choosing to avoid it could have unintended consequences. The cloud has evolved beyond being a mere choice—it is now a necessity for businesses striving to excel and remain competitive in an ever-changing digital ecosystem.

This article was published on Fast Company. 
 

FAQs

How can switching to cloud computing help small businesses save money?

Cloud computing for small businesses reduces IT costs by eliminating expensive servers, maintenance, and in-house IT overhead. With ECi Solutions, SMBs only pay for the services they use, freeing budgets for innovation and growth.

Are cloud solutions secure enough for small businesses?

Yes. Cloud providers like ECi Solutions invest heavily in cybersecurity, offering encryption, threat monitoring, and compliance safeguards—protections often stronger than what most SMBs can afford on their own.

What challenges do SMBs face when moving to the cloud?

Common challenges include migration planning, data security concerns, and employee adoption. ECi Solutions supports SMBs with step-by-step strategies, training, and scalable solutions to ensure a smooth transition.

Will employees struggle to adapt to cloud-based systems?

With the right training, employees quickly adapt to cloud systems. ECi Solutions provides hands-on onboarding and ongoing support, making the shift seamless and ensuring staff confidence at all skill levels.

How does cloud computing drive business growth for SMBs?

Cloud services help SMBs scale operations, automate processes, and improve efficiency—leading to faster revenue growth. ECi Solutions empowers small businesses to innovate, expand, and stay competitive with flexible cloud tools.

How can a small business get started with cloud adoption?

Begin by evaluating your IT needs and selecting a secure, scalable provider. ECi Solutions guides SMBs through cloud migration—from provider evaluation and strategy to employee training—ensuring a cost-effective and successful launch.