Small Business Cloud and Storage Trends for 2014

by Drew Robb

Data capacity needs just keep growing, and the cloud stands ready to meet small business storage needs. What trends will we see in 2014, and what do SMB owners need to know? Our experts weigh in.

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." 

Cloud Backup for Small Business Evolves

People enamored by cloud apps, however, should be aware that the rules of small business data backup still apply—even in the cloud.

"Small businesses that use, or plan to use, cloud-based applications, must ensure that a data backup and recovery strategy is in place in the event of a data loss," said Eran Farajun, executive vice president at Asigra, a cloud-based data backup provider. "It's not the application provider's role to ensure data recovery; the cloud user is responsible for this recovering lost data."

A year or two back, it was good enough to send vast quantities of data to the cloud to serve as backup protection. The problem comes when you have to recover that data due to a failure or disaster. Suddenly, an issue emerges—it can take an age to get data back down from that cloud.

Enter Recovery as a Service (RaaS). You don't pay for how much data you back up to the cloud (which can get expensive). Instead, RaaS startups such as Bluelock charge based on how much data you recover in a given period. This can markedly change the economics of cloud backup for some SMBs.

Bluelock Virtual Datacenters (VDCs), for example, let you store as much data as you want for a small fee. If a disaster happens, users pay for the additional resources required to recover—like CPU, memory and software licensing.  As soon as the disaster event subsides, those costs go away.  Thus they don't have to incur large hardware and software costs as an ongoing basis in case a disaster occurs. Look for RaaS to be a growing trend this year.

"Small businesses also can't assume that, just because they have a local copy of their data, that they can recover their applications," said Pat O'Day, CTO at Bluelock. "It can take them days or weeks to get up and running from just backups. New equipment needs to be procured—along with space to put that equipment—and the backup tapes need to work with the new hardware. Protecting your data and ensuring availability is best done off-site."

Remember the Small Business Network

Many SMB's get caught up in the rush to the cloud. But don't forget about your company's network performance capability. A bunch of new cloud services can suddenly create a bottleneck. 

"Increased cloud deployments will put more focus on wide area network or Internet performance," said Everett Dolgner, director of product management at Silver Peak. "The Internet is often the weak link in a cloud deployment."

Simplify It

A side current of the cloud is that people are getting used to not having to deal with all the complexity normally associated with storage technology. Therefore, in 2014, small businesses will insist more on storage that's both simple to manage and cost effective. 

"Simplicity of managing storage in virtual environments will be recognized as a critical metric for success," said Saradhi  Sreegiriraju, director of product management at Tintri. "Small business owners should carefully evaluate their options and adopt storage and cloud technologies that give them the greatest payoff, while carefully considering the security and the cost-effectiveness of these services."

Drew Robb is a Los Angeles-based freelancer specializing in technology and engineering. Originally from Scotland, he graduated with a degree in geology from Glasgow's Strathclyde University. In recent years he has authored hundreds of articles as well as the book, Server Disk Management by CRC Press.

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This article was originally published on Wednesday Jan 8th 2014
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