The 10 biggest issues facing start-ups in 2013: #10 heading to the cloud

Shadow small business minister Bruce Billson recently embarked upon a ‘listening tour’ to find out the problems faced by Australian enterprises.

So what are the main issues SMEs are grappling with? There is no exhaustive list, of course, but accountancy and business advisor network DFK recently conducted a survey of its clients and staff to identify the top 10.

In the coming weeks, we’ll be revealing, in reverse order, which 10 issues are top of mind for Aussie entrepreneurs. Today, we start with number 10 – cloud computing.

Are you embracing the cloud yet? Well, you better think about it. If not, you will most likely find that your competitors are already there, or on their way, and will leave you behind.

Cloud computing generally means accessing files or software programs from servers which are not in your office, providing online access features, such as Dropbox and Xero.

Cloud computing is making the biggest impact in the area of infrastructure. It is that foundation on which successful online businesses are built.

These businesses have the ability to move quickly; adapting to fast evolving customer demand automatically, provisioning servers in minutes and delivering services and products to the market.

Speed to market and agility is essential, particularly with new web-based business models.

Traditional market research has its moments, but the best insights come from customers. Today many successful cloud-based businesses start with a minimum of acceptable functionality as they enter the market, and then listen to their customers and are able to adapt quickly.

Going into the cloud is not a question about ‘if’, but ‘when’. But some businesses are still struggling with fear and resistance to the cloud.

“We have had to do some convincing with some clients. There is still a belief that if you have the content on a local desktop, it’s safer than if it’s in the cloud,” says Cheree Woolcock, partner of DFK Australia New Zealand in Melbourne.

US analyst firm Gartner is predicting that spending on public cloud services in Australia will grow 23% this year, reaching US$3.2 billion and US$5.2 billion in 2016.

Australia is well ahead of the average 18.5% increase in global spending this year.

These new cloud-based businesses can, in fact, start a business in a matter of weeks and be in the market almost immediately, without placing strain on capital, as opposed to non-cloud business.

This new landscape changes everything; how we purchase, plan and forecast.

Very shortly, all software will be leaving the shelves and we’ll get it online, but the major difference is that we won’t buy it, but hire it.

It doesn’t mean the death of retail as such. They just move their activities to a phone instead of a shop floor.

“In some cases it may only be a website to communicate with or a customer centre in Asia, which some clients will not appreciate. There will be several clients who will be forced to go in a direction they are not happy with,” says Woolcock.

She has, however, noticed that many clients who initially had an adversary attitude become advocates of the new technology in due time.

MYOB found in their latest Business Monitor that the financial gap between the online-savvy and the cautious ones is widening. Businesses that use the cloud are 106% more likely to see their revenue rise, than those who did not.

The Business Monitor also showed that those businesses using a cloud solution are more likely to plan to increase their activities in the market within the next 12 months, than those without.

So how do you build a cloud?

“We suggest investing in already developed products and to test them first, but of course if you can’t find what your business needs, you might have to develop it and that comes with a price tag. Many start-ups don’t have the money to develop something generic” says Woolcock.

In building cloud applications it is all about developing methods, applications built in days, reviewed in hours and rolled out in minutes.

No more old-fashioned lengthy specifications that need to be signed off by everyone.

Choosing the right technology and having the right people are, of course, crucial in that process.

Building a cloud is not for everyone, but again there are existing solutions that can be modified to your business needs.

Cloud advantages for small businesses:

• You can access your files wherever you are.
• You can access your files on any device.
• The information is automatically backed up.
• Software is cloud-based, so there are no expensive licences.

Possible cloud disadvantages:

• Don’t put everything to the cloud, including “secrets” that you don’t want anyone to see/know.
• If internet is down, your cloud is down – you need a reliable connection.
• Lack of support, sending an email and getting an answer 24 hours later, might cause havoc in your business.
• Is it cheaper? Compare pricing plans for every application in your contract.