It’s conventional wisdom that the more processes you load into the cloud, the faster and more agile your business becomes, and the cheaper and simpler it is to run. Given the importance of keeping costs low for small-to-medium enterprises (SMEs), combined with the likelihood of not having much hardware available and a limited staffing pool, surely cloud is the sensible option?
Well, not always. Cloud technologies are incredibly effective in some contexts, but it’s not a panacea for every problem you’ll face as a small business.
That’s because data is the lifeblood of a modern organisation. SMEs and corporate conglomerates alike need to minimise the work required to access quality data, and streamline the processes that rely on that data, while minimising costs — none of which is a given, in the cloud or outside it.
It’s important to approach your infrastructure with a balanced view. If not implemented properly, cloud can expose your business to some shortcomings that you’d rather avoid.
Cost of doing business
The cloud is flexible by design, but the management of that flexibility can be tricky for some SMEs. According to research from CloudZero, 58% of businesses spend more on cloud technologies than they should.
That’s because the overall pricing that you’ll pay for those services isn’t up to you – it’s up to the industry. By the close of 2023, for example, IBM, AWS, Google Cloud and Microsoft had all increased their hosting and storage fees by somewhere between 11% and a whopping 50% compared to the 12 months prior.
Of course, Cloud Service Providers (CSP) aren’t trying to alienate their user base, with new solutions for storage and networking that allow users to bring their costs down. Some businesses will end up on the wrong side of those margins. These organisations can feel ‘locked in’.
It’s at this point that the contractual lock-in that comes with committing to a certain CSP can sting; if you’ve signed a multi-year deal with a provider, the exit fees might not be affordable either. And if you’re a business that relies on multiple cloud providers for different applications, that problem compounds itself.
In simple terms, SMEs can sleepwalk into long-term operational expenditures (OpEx) commitments that leave them unable to meaningfully organise and analyse their data. Without the right terms, setup, and partners, SMEs can face serious disadvantages compared to more cost-effective and more agile competitors.
Silver linings
If the cloud model does suit you as a business, there are important features and factors to consider to ensure that you don’t fall foul of some of the restrictive elements of a cloud approach.
For starters, minimising the amount of work you need to do to access quality data is incredibly important. If possible, leverage a data streaming platform that cleans the data at its source rather than after it is loaded into’s in a data repository like a data lake. Doing so, you can significantly reduce your extraction, loading and transformation costs.
Similarly, you want your cloud system to have the right level of capacity to execute all workload requirements across your business, regardless of the computing requirements. Auto-scaling and elasticity are important features to look for here, especially for SMEs given their relatively small workforce, as it allows your cloud system to respond in real-time to workload requirements. Scaling up ensures that customers and employees can do whatever they need to address the workload requirements from their end customers, while scaling down (potentially all the way down to zero) keeps costs to a minimum.
Beyond these concerns, if the cloud is not for you, there are other effective options available to SMEs.
Thinking outside the cloud
Cloud repatriation – that is to say, moving away from a purely cloud-based approach towards either an entirely on-premises one, or a combination of the two – is a growing movement. According to Citrix, 25% of UK organisations have already repatriated, to some extent, back on-premises.
Rather than committing entirely to the cloud, a blend of physical and cloud-based capabilities allows you to process data closer to its source, reducing attack surfaces for bad actors and increasing speed. You retain greater control over your data even as performance improves. For applications that demand high computational power, low-latency processing, or constant, uninterrupted data access, an entirely on-premises approach can deliver superior performance, too.
Another alternative is ‘Bring Your Own Cloud’ (BYOC) where organisations host applications and data in their cloud accounts, instead of in vendor’s accounts. Organisations that use cloud services but have compliance requirements that prohibit data from leaving their Virtual Private Cloud (VPC) prefer this approach. Of course, BYOC comes with tradeoffs of operational complexities given its shared responsibility model. However, it’s well-suited to support zero-access from the vendor accessing their raw data in their cloud under any circumstances.
The ways in which data enters and moves around these structures can enhance any one of these approaches. Data streaming platforms can pull data through as you need it in real-time. This offers an escape from the delays inherent in methods like batch processing that the cloud isn’t necessarily suited to scale with, or perform efficiently.
Clear skies ahead
Whether you’re a cloud purist or entirely on premises, no one-size-fits-all solution exists when it comes to data infrastructure. Businesses, especially SMEs, need to be able to compose an agile approach that works best for them, free of the constraints of one particular approach. That includes the cloud.
Whether they choose a full cloud setup, BYOC, on-premises hardware, or a hybrid model, each has its own strengths – but regardless of the way forward, it’s the flow of data that matters above all else. The model that you choose has to be able to scale with you not only in terms of functionality – where the cloud excels – but in terms of economics, where it can often underwhelm.
If SMEs can bring data and its corresponding insights to the fore, free of the economic restraints that could stop analysis in its tracks, they’re all the better placed to maximise their advantage over competitors unable to benefit from their insights – and their cost effectiveness.
- Digital Strategy
- Infrastructure & Cloud