Many small businesses feel overwhelmed by cloud computing at first, but once they realize the economic value many cloud services provide, they take a second look. This window of opportunity for small businesses to scale in ways they could never have before provides them with a great advantage to position themselves against even the largest competitors.

Most cloud services offer economies of scale by leveraging the massive server capacity available. A prominent example of this is Amazon’s seemingly endless amount of storage space on their cloud. The cloud is essentially elastic, meaning it can easily scale up or down depending on the demand. A small business with cost constraints can take advantage for this pay-as-you-go cost model rather than purchasing an IT server and managers.

Cloud computing became the hot topic of discussion when the recession hit and companies had to tighen up their budgets. They could no longer afford expensive servers, clunky software, and entire IT teams to manage this infrastructure. Cost constraints led decision makers to open their minds to cloud computing. At this time, cloud computing was a fairly new concept and term, which led to many raised eyebrows and question marks. However, as companies slowly adopted cloud services, many others began to understand its purpose and benefits.

Now, it seems that people have moved from the question mark phase into the comparison between cloud services phase. Most don’t have to wonder what cloud computing is, they now wonder which one will provide the best value to their company and operations (as well as budgets).

In reality, any company, both small and large, can take advantage of the cloud for its storage infrastructure and cost savings. However, bigger companies have a harder time simply switching over from a local server to public cloud and expecting all employees to follow suit. Small companies who are smart can make inroads into places they could not go before, potentially disrupting their larger competition. This is possible because it is easier to scale and integrate on a global scale with cloud applications.

With traditional IT systems, businesses were forced to fork over hundreds of thousands of dollars up front to buy or build an application in hopes that it would work and provide significant value. Cloud computing changes that. Cloud computing now shifts investments from a costly transaction to an ongoing operations expense; the pay-as-you-go model.

The point of this post is not to just outline the cost of ownership, but to also understand that cloud applications will increase the agility of IT, both from a technical and financial standpoint. Without heavy initial outlays of money, the cloud allows companies to experiment with different applications at a very low cost (mostly the use of computer time working on it). Essentially, the cloud offers companies the ability to try out different services at little to no cost to find the perfect fit instead of having to commit to one system for years.

How about your organization? Have you adopted or considered cloud services to help get through budget costs or are you comfortable with an traditional IT infrastructure?