Small Business Cloud and Storage Trends for 2014

The buzz surrounding the cloud continues unabated. And though many small business owners are still puzzled by it (my wife’s hairdresser thinks he has a physical cloud somewhere up above his iPhone that moves around wherever he goes), the small business world is gradually coming to terms with it.

That’s a good thing, because cloud computing can give small businesses a technological boost at a fraction of what it could cost to run their own IT in-house. We take a look the hot trends in cloud and storage that you should know about, and what you should do about them in 2014.

There’s a Cloud App for That

The broad use of cloud-based applications, such as Google Apps, by small businesses continues to gain big momentum. How broad? Consider this: Google Apps has more than 50 million users, including five million businesses. Microsoft Office 365, released only in the last year, passed the one-million-user mark in just 100 days.

According to Google spokesperson Tim Drinan, small businesses like cloud-based apps because they’re designed to work across on desktops, tablets or smartphones. People can stop working on one device and pick up right where they left off on a different device in a new location. Research firm Gartner predicts that cloud penetration will grow from 6 percent of the application market in 2012 to 65 percent of the market by the end of the decade.

Should all small businesses dump their existing, on-premises office software and rush to the cloud? Not necessarily. If your business owns aging versions of Microsoft Office that badly need an upgrade, try both Google Apps and Office 365 on a trial basis to see which you prefer. However, if you own versions of Office that are newer than, say, Office 2003—and they function adequately—hold onto them to end of their lifecycle. Why change what currently works?

Cloud Everything

Eventually the cloud could take over, particularly in the small business world. Gytis Barzdukas, senior director of product management for cloud-backup provider Mozy, considers that almost all of the ingredients are in place for SMBs to abandon internal IT altogether. They can store endless amounts of any data online, and run applications such as customer databases, finances, email and a lot more as Software-as-a-Service (SaaS).

“Many small businesses are set to embrace cloud storage in general,” said Gytis Barzdukas, Senior Director of Product Management for Mozy.

Numbers from analyst firm SMB Group support this assertion. Its research found that SMB use of cloud applications for business is poised to grow from 33 percent to 44 percent in 2014.

Lower-cost Storage

As cloud storage takes hold, the pricing has dropped regularly—great news for small business. Amazon Simple Storage Services (S3), for example, lowered its prices about two dozen times in the past six years. You see a lot of price cuts, too, from the likes of Google, Rackspace and Windows Azure. Small business owners can look forward to low-priced storage in the face of ever-growing data capacity demands.

As cloud providers drop costs further, it will have a domino effect on storage hardware, too. Companies that sell NAS boxes so that small businesses can keep data locally must offer competitive prices or face a mass exodus to the cloud.

But buyers beware: cloud pricing can be a little deceptive. It might be cheap to dump a lot of data online, but that’s only the beginning in many pricing models. Cloud storage providers may charge for the amount of capacity stored, the amount of network bandwidth consumed, or the amount of data you want transmitted back from the cloud to restore documents.

However, some vendors differentiate themselves by offering simpler pricing. “I have been using Rackspace for backup for many years now and its service offerings are growing,” said Greg Schulz, an analyst at StorageIO Group. “I like its all-inclusive pricing model, because I don’t have to worry about extra fees for access, moving or deleting data.”