Cloud Computing Basics: What Small Businesses Need To Know

Small and large businesses from across the globe are turning to cloud services to help run their business. With the plethora of information about cloud computing these days, it is hard for small business operators to demystify and select the right options. A cloud computing managed service provide can help guide and support your IT infrastructure through this process.

In basic terms, cloud computing is where you and your team can store and access hardware and software applications over the internet instead of using your computer’s hard drives. Ultimately, the “cloud” really is just an extension of the internet.

Before we take to the sky, let’s clear the air on some things. 

  • Cloud computing does not include your hard drive. 
  • When you store data or run software from your hard drive, that is called local storage and computing. 

Now that we’ve explained the basics, let’s dive into the detail and explore what cloud computing is all about. 

IaaS, PaaS, and SaaS – what does all this mean?

Cloud computing is a cost-effective option assisting small businesses with day-to-day IT operations. When it comes to cloud computing services, there are three categories available for businesses to consider, these are:

  • Software as a Service (SaaS) 
  • Platform as a Service (PaaS)
  • Infrastructure as a Service (IaaS)

Let’s step through each of these cloud options to explain what they are, their purposes, and things to consider about each service.

Cloud Computing Services – who manages what?

Before we get into the nitty-gritty of each type of cloud computing service, it’s good to have a better understanding of the ‘big picture.’ To understand what each service offers, you need to understand who manages what in the typical IT framework. 

When managing your IT framework, there are four different options available. We have highlighted these in the table below. This starts with your more traditional IT function – here you manage every aspect of the IT framework. 

As you progress through the cloud service offerings, you can see where the vendor absorbs more responsibility over your IT framework – thus giving you more freedom to focus on other business goals. 

As you continue to read this article, refer back to this table as it will help you understand the added value, as each service offers a little more coverage.

Amazon provides Saas cloud computing services


Software as a Service (SaaS)

Did you know that Hotmail and Gmail are examples of SaaS cloud-based computing?

After realizing this, it is easy to understand why SaaS is the most popular cloud service option for individuals and businesses. SaaS is a pay-as-you-go service that can be purchased via monthly or annual subscriptions. Getting started with a SaaS provider can be as easy as setting up your account, username, and password! 

Examples of when to use SaaS cloud computing

SaaS is flexible cloud computing and a great option to consider when:

  • Delivering small projects that require team input and collaboration (DropBox, Microsoft OneDrive)
  • Applications infrequently used (Adobe Creative Cloud, Survey Monkey)
  • Launching an eCommerce business (Shopify, BigCommerce, Magento)
  • Applications requiring mobile and web access (SAP Concur)

Examples of popular SaaS options on the market

Some of the most popular types of SaaS on the market include:

  • Concur (SAP Expense Management Application)
  • Salesforce
  • Dropbox
  • Office 365

Things to consider before committing to SaaS

Like everything, there are advantages and disadvantages. When it comes to SaaS cloud computing, the benefits far outweigh the risks. Here are some things to watch out for when using SaaS. 

  • Lock-in contracts: Be wary because SaaS vendors make it incredibly easy and enticing to join a service but incredibly difficult to exit. Before your small business subscribes to any SaaS paid service, thoroughly investigate all the terms and conditions. Otherwise, you may be burnt with expensive exit fees. 
  • You receive an off the shelf solution: When it comes to SaaS applications, it is important to recognize that they are off the shelf, which means you receive a one size fits all solution. When you purchase an ‘off the shelf’ solution, you won’t be able to customize parts of the solution to meet your specific business needs.

Platform as a Service (PaaS)

Did you know that you can create software using PaaS cloud computing?

PaaS is similar to SaaS, but instead of using existing software over the internet, PaaS allows you to create software over the internet. PaaS is essentially a cloud service version of application infrastructure referred to as middleware. 

Parts of the PaaS offering is used by IT departments when delivering their digital business technology offerings. Now that cloud computing is widely accepted and evolving, PaaS is growing in popularity and is essential to digital transformation. IT teams use PaaS due to its flexibility to deploy, test, and manage web-based applications quickly and easily.

Examples of when to use PaaS cloud computing

PaaS is flexible cloud computing and a great option to consider when:

  • Automating routine tasks in the IT department such as patching, updating software, and general maintenance (AWS Elastic Beanstalk) 
  • Developing superior tools for mobile workforces to access (ServiceNow)
  • Creating robust reporting with inbuilt analytics to do things like track spend (Microsoft Azure)

Examples of popular PaaS options on the market

Some of the most popular types of PaaS on the market include:

Things to consider before committing to PaaS

When it comes to PaaS cloud computing, there are some things to mindful of, these include: 

  • Technical Expertise: To ensure you select the right vendor and properly utilize the PaaS service offering, you’ll need to be technically minded or have an in-house resource who can navigate your business through the PaaS landscape. 
  • Data Security: With PaaS, your business will store most or all data with an external vendor. In some instances, your vendor may store these data sets via another third party. In this instance, you lose control of data security. It is really important to thoroughly understand PaaS’s data security and compliance protocols before getting locked into a contract.  
  • Vendor dependencies: Once you have signed up with a vendor, you lose a lot of control over things. For example, if a vendor changes an element of their infrastructure or internal processes, this may have a major impact on your application’s operating performance. In addition to this, you are at the peril of your PaaS provider, and if their subscription fees change, your application may become a costly expense. 
  • Vendor Lock-in: Once you have signed up with a PaaS vendor, it may become challenging to switch providers. There are many things to consider when leaving a vendor because when sourcing a new provider, you will be limited by your existing technology architecture. A new vendor may not support the same languages, operating system, or libraries. This means you may be required to rebuild or significantly change your existing application.   

Infrastructure as a Service (IaaS)

Did you know IaaS allows businesses to access virtual hardware on demand?

As opposed to buying hardware outright, IaaS allows businesses to rent an IT infrastructure on demand. The types of virtual hardware accessible using this option include servers, storage, and networking

IaaS gives companies the same technology and capability as a traditional data center (physical servers, storage, and networks) without physically maintaining and managing it. 

Think about it this way; if you have all of your physical hardware, you pay for the cost to house it, maintain it, keep it at room temperature, and insure it – a costly exercise. 

IaaS is all about storing your data in the cloud – via the internet. In all reality, what this means is that your data goes to servers in massive warehouses that are owned and managed by large tech companies. For example, Microsoft Azure (IaaS) stores your data across their 160+ physical data centers (warehouses) located in multiple regions across the globe.

Examples of when to use IaaS cloud computing

There are some situations more suitable for IaaS cloud computing. Consider using this service when:

  • Starting up a small business. IaaS will save you time and money on purchasing hardware and software (Amazon Web Services, Microsoft Azure)
  • Your business is experiencing rapid growth. IaaS allows you to scale up and down to meet evolving business needs (Amazon Web Services, Microsoft Azure).

Examples of popular IaaS options on the market

Some of the most popular types of IaaS on the market include:

  • Microsoft Azure
  • Amazon Web Services 
  • Google Compute Engine. 

Things to consider before committing to IaaS

  • Technical Expertise: To ensure you select the right vendor and properly utilize the IaaS service offering, you’ll need to be technically minded or have an in-house resource who can navigate your business through the IaaS landscape. In addition to this, you may need to provide extra training so your team can properly manage the infrastructure.
  • Existing computer software. You may have some “legacy” apps (old/existing systems), and the IaaS infrastructure may not have the proper controls to secure that app. You may need to enhance your legacy apps before moving them across to the cloud. This move may lead to security issues if there has not been enough testing undertaken. 
  • Security. While your IT team is still in control of various parts of the infrastructure in-house, your business is still vulnerable to security threats. Insider threats or system vulnerabilities may expose data to unauthorized bodies.

Final thoughts 

As the world continues to evolve digitally, cloud computing will continue to have a larger footprint in our personal and professional lives. No matter what size your business, there are many significant advantages to using cloud services. 

These days, it is likely that most small businesses will opt for a hybrid model of SaaS, PaaS, and IaaS services to achieve their business goals and objectives. Perhaps you are already unwittingly using cloud computing? 

Hopefully, this has cleared up any confusion and pointed you in the right direction when selecting the best-fit cloud service offering for you.