How Cloud-Based Systems Trim Your Operating Costs

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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Enter the cloud. It's calling you. It wants to save you money. Actually, it wants to make money off of your business, but if you're even a little bit aware of what you're doing, you'll save money by switching to cloud-based computer applications rather than traditional solutions. Say hello to a brave new world of business conducted in the stratosphere and enjoy the very earthly delight of a larger profit margin.

Email Service with Adequate Storage

Public institutions and large companies often host their own servers for email services, but the number of users times the number of emails mean that they have to cap everyone at a storage limit. People get a little uneasy when they have to actually delete old emails which may hold important information. Archiving is so much nicer. Cloud-based email solutions (yes, of course, Google's Gmail is the top dog here) provide nearly infinite storage capacity for a much reduced cost.

JBI Studios switched from a traditional server-based email provider to cloud-based Google Apps and is saving $75 per user per year. Not bad.

Office Space and Meeting Space

The actual physical space needed to hold workers and conduct business can be one of the largest ongoing expenses for a small business; what if you could reduce that expense, or even eliminate it altogether? Cloud-based systems, from Skype to instant messaging, chat, synced calendars, file storage and transfer, and online, accessible project management, eliminate the need for all the worker bees to be in the same physical hive.

Telecommuting gives your employees greater flexibility (and, often, greater productivity, according to this study from WorkShifting.com) while cutting the cost of office space with its office phone system, furniture, utilities, and maintenance. The same goes for meetings. Feel free to rent a conference room at the local hotel, or use any number of cloud-based meeting solutions (iMeet, WebEx, GlobalMeet). Or just schedule a group call over Skype.

Data Storage and Server Space

Every business has some data to save, and some businesses have a lot of data to save. Data, as boring as it may be, is expensive to store securely if you're doing so on your own servers. You can either purchase and maintain your own servers, or pay someone else to use their physical servers, or switch to the cloud.

Crooner Labs went from six physical servers at a cost of $3000 per month for upkeep to cloud-based storage, which costs them less than $1200 per month.

Those are perhaps the three most dramatic examples, but there are many more ways that using the cloud can help your business run more efficiently for less money.

• Software upgrades and subscriptions: purchase expensive software for your employees or use cloud-based software and systems, for everything from document creation to accounting.
• Phone systems: a cloud-based phone solution can save you hundreds per month. Monaco Baking Co. switched from their provider to a cloud-based phone service for savings of $600 per month. There are also free cloud-based conference calling services your small business can use.
• Customer service: cloud-based solutions for customer service have totally changed the way many companies handle this area, which can become a huge issue when small businesses grow suddenly. There are various ways to take advantage of cloud-based solutions for customer service; you can set up a call center with telecommuting workers, for example, or use a service to receive and respond to customer support tickets.
• Employee training: Webinars and online training courses eliminate the need for travel expenses and still allow you to keep your employees updated and educated.
• Research: Virtual access to research journals, university archives, libraries, magazines, and, um, what's that other one? Ah yes. Books. Search and find for free; often, read and use for free as well.

The ability to scale is perhaps the most valuable characteristic of cloud-based business services. You can start with a service you like, buy in at the level you need, and transition up the scale as your business grows. This ability to spend money only on the services you need now gives you much-needed breathing room. You can increase your service, and corresponding cost, as you see actual business growth. And your increased spending will, most likely, still be far less with cloud-based solutions, allowing you to invest back into your own business.