Outsourcing the IT Department to the Cloud: Does It Make Sense for SMBs?

By | Jan 30, 2012

Cloud computing--it's been the buzzword around technology markets of all types for the past several years and is finally starting to deliver on promises made. In many ways a more efficient reworking of the centralized data concept, cloud computing promises more for less by allowing a small or midsize business (SMB) to outsource any part of or all of their IT department. But while "as-a-service" options all offer greater ease of use and supposedly lower costs, does letting a cloud provider take full IT control really make sense?

The Great IT Debate

For SMBs, the cloud represents two things: lower cost and improved agility. Many businesses love the idea of having no in-house servers, which should cut power costs and end the need for upgrades over time. In addition, the cloud's promise to deliver almost any app and run on multiple operating systems makes many SMBs eager to buy in. Limited patching and downtime and always-on access sounds great to most business owners.

In a recent ZDNet article, Josh Gingold talks about the "great debate" the site is currently running, which centers around the use of cloud computing as an SMB's only IT department. Arguments on the pro side are that small businesses need little enough IT. The rebuttal is that SMBs shouldn't shunt all their data elsewhere and should have at least one member on staff to offer advice about cloud strategies and getting best deals from cloud providers.

The Cost/Agility Dichotomy

One of the most significant arguments in favor of the cloud is that it is less expensive than a local server, but some experts maintain that agility is what really sets the technology apart. Detractors say that the cloud can't be both cost-effective and agile, and therefore isn't the best option for enterprise-level business, much less SMBs. NetworkWorld recently examined this dichotomy, and made the case that cost and agility can, in fact, coexist in cloud computing.

The analogy used by the NetworkWorld piece is that of automation: Cloud computing essentially comprises stacks of virtualized servers with greater computer control over a larger data area. And that automation not only lowers costs but increases agility. The first automated assembly lines both reduced the cost per item produced and increased the speed at which a company could produce it; cloud computing may well offer the same benefit. With an increased reliance on pre-defined scripts rather than direct monitoring, the cloud should be able to more quickly complete any tasks a business sets out, and with lower labor costs. The price of off-premise IT should decline.

To IT or Not to IT?

An IT budget is often the most bloated in a company, and reducing it down to a single payment per month has many companies ready to hand over the virtual keys. The market is young, however, with performance standards still in flux, and many SMBs unsure of what to pay for services. Some movement to the cloud makes sense as technology evolves, but putting every mission-critical egg in one basket isn't necessary yet. While a full IT department may not be required for SMBs, in-house IT knowledge is invaluable in a changing market.

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