A Remarkably Large Portion of Businesses Are Still Reluctant to Embrace Cloud Computing Even the smallest businesses can benefit from readily available technology, so why won't they use it?
By Eyal Lifshitz Edited by Jessica Thomas
Opinions expressed by Entrepreneur contributors are their own.
When entrepreneur Marc Benioff launched Salesforce.com 20 years ago, he adopted an unusual logo for his startup. It featured the word "software" in a circle with a red slash across it. The logo matched Salesforce's mission, "The End of Software" and its slogan, "No Software."
It was a quirky marketing stunt, as Benioff himself admitted. After all, Salesforce was then, and still is, a software company. It is now a tech giant that makes it easier for businesses to manage sales and customer relations. But in the early 2000s, Salesforce sought to address a big challenge faced by many businesses: software was so damn expensive.
Back then, using software for your business meant spending a small fortune on computer hardware, including PCs and servers, and on software licenses and maintenance fees. Everything had to be set up on premise, which meant hiring a team of IT professionals or using a managed service.
Only companies with sizeable IT budgets or big corporations could afford such in-house networks. For small businesses, these were luxuries that they would not even consider having.
But then things changed.
It began with the rise of cloud computing, which allowed companies to access computing power through a network of powerful computers and storage devices, instead of spending huge sums on in-house data centers. This trend has been called "utility computing" because it essentially turned computing power into a utility.
The cloud also paved the way to make software more accessible to businesses and consumers. It enabled software developers to transform to a service-oriented business model by deploying their software remotely, in the cloud, and then selling software as a service instead of shipping software packages that customers had to deploy on site.
That's what Benioff did at Salesforce. He was a pioneer of what has come to be known as software-as-a-service, or simply SaaS.
Instead of spending thousands of dollars on hardware and IT networks, businesses could pay for software the way they pay for a newspaper or cable subscription. They access the software by logging into the Web and pay a monthly or annual fee based on the number of account users and/or the features that come with the package. No more hefty licensing, maintenance fees and expensive in-house IT systems.
The cloud and SaaS made access to sophisticated software programs affordable for small businesses, including mom and pop shops.
But many small business owners are still reluctant to embrace the cloud completely. A new Gallup poll found that only half of small business owners surveyed believed technology and digital platforms are "an overall plus for the businesses." The poll also found that roughly 40 percent didn't think upgrading their small business technology would have a significant impact on business. Another report in 2017 published by Deloitte also found that many small business owners are "not fully embracing the digital age."
That's unfortunate. From my experience, utilizing online software services can be a game-changer for a small business.
It certainly was for us. When I launched my startup with a small team five years ago, all we had were a few laptops and access to a few cloud services. We're now a team of more than 200 people. And yes, various SaaS packages, including Salesforce, played a critical role in our growth.
There are many kinds of software that can help a small business automate key tasks, saving you time and even money. I'll mention just three areas.
Related: 3 Benefits of Cloud-Based Accounting Tools for Small-Business Owners
Payments, invoicing and accounting.
Managing finances is one of the most tedious, and critically important, tasks for a small business owner. Simple errors in your invoicing process can cause plenty of headaches. A disorganized accounting system can cause your business to stall.
But there are now dozens of online financial management services -- such as Quickbooks, NetSuite and Bill.com -- that can dramatically make it easier for you to keep track, often in real time, of all of your business transactions and cash flow. In many cases, they can even help you prepare for tax season.
Marketing
You probably spread the word about your business by sending emails or taking out ads on Facebook or Google. But how do you measure the success of your campaigns? You can turn to marketing automation software, such as Hubspot and Marketo, that helps you analyze the effectiveness of each email blast and each digital ad campaign. You can use these learnings to fine tune future campaigns, helping you save time and money in your marketing efforts.
Related: The 6 Best Ecommerce Platforms for Small Businesses
Customer Support
Having a dedicated staff is still the best way to make sure your customers get the support they need. But there are programs, such as Zendesk and Service Cloud, that make the process more efficient and effective. You can now use Web-based software to solicit and process customer feedback, even complaints. These programs enable you to respond faster and more effectively to issues raised by your customers. You're also able to pinpoint the most problematic areas in your operations based on data collected and processed through those tools.
You need to have a well thought out plan, of course. Here are the common blunders small business owners make when embracing online software services:
1. Waiting too long.
One blunder is to keep putting off the decision to automate some, if not most, of your business operations. Unfortunately, this is fairly common. The jury is in when it comes to business benefits of today's technologies. But the Deloitte report found that many small business owners believe that digital tools are either "not relevant for my business" or "are not effective for my business."
2. Being too focused on price.
Many entrepreneurs do acknowledge that technology is both relevant and effective for sustaining and growing their business. But some of them commit another typical mistake: being too focused on price.
Some business owners opt to use a free program, instead spending $100 for a yearly subscription to an online service which is much better suited to their needs. According to the Gallup survey, more than a third of small business owners who have already adopted some types of technology feel that upgrading their systems causes them "some financial strain." Understanding the long-term benefits of technology is important. In many cases, paying that hundred bucks for a year-long access to software that help you manage your finances or keep track of your customer complaints, can turn out to be one of the smartest investments you'll ever make for your business.
3. Choosing the wrong software service.
Of course, price isn't everything. Some business owners do understand how the cloud can help them succeed -- but they don't exactly know what they need. They end up falling into different trap: getting enamored with fancy features which leads them to choosing the wrong software, usually too expensive or complex for their business needs. Remember, the best technology for your small business isn't necessarily the most sophisticated one. Don't be mesmerized by all the bells and whistles on a new tool or program.
Being SaaS-savvy and choosing the right software tools for your business won't solve all of your challenges. But it will help you run your company more efficiently and let you focus on the more strategic parts of the business.
