To be sure, CEOs are not taking the complete plunge overnight. Many appear to be testing one or two functions at a time. Sono-Tek, a $10 million-a-year maker of ultrasonic liquid atomizing nozzles—that earns 60 percent of its sales internationally—has moved its customer-relationship management (CRM) system to the cloud. CEO Christopher L. Coccio, says the company, based in Milton, New York, keeps analyzing and reviewing to decide which function will be next. “It’s going to be an organic evolution as opposed to saying, ‘Tomorrow, Sono-Tek is going onto the cloud and that’s it,’” he explains.
The array of SME’s doing business internationally is fabulously complex. Some companies export manufactured goods, relying on distributors and partners. Others are professional service firms that deliver engineering or legal services. Still others are retailers of everything from beer to shoes. Some are just starting out on their global strategies, but others already have graduated to opening offices, plants and stores in foreign lands. Certain companies have sprung up precisely because of the power of the cloud.
One small company called Music Mastermind, based near Los Angeles, sells its musical game applications in 154 countries because it relies on IBM’s SoftLayer hosting platform. Its business model would not be possible without the cloud. It’s increasingly clear that the cloud, when used wisely, can make SME companies more competitive than ever against larger rivals. “There’s no question [that] the cloud levels the playing field,” says Laurie McCabe, co-founder and partner in the research firm SMB, based in Northborough, Mass., which specializes in the IT needs of smaller companies. “They couldn’t possibly do all this on their own. They are not Coca-Cola. They don’t have zillions of tech people to evaluate things.”
McCabe says one key to using the cloud is to develop a go-global strategy and understand how the technology can support what the business is trying to achieve. The functions that touch customers or employees in multiple geographic locations are often the first to move to the cloud, such as marketing, CRM, human resource systems and employee collaboration tools.
Clouding Up Data
One source of confusion is the terminology that surrounds the cloud. What is a “private cloud” versus a “public cloud” versus a “hybrid model?” The best rule of thumb is that a private cloud refers to the decision by a company to locate servers, software and data in a gated area in a host company’s data center. It is walled off from other systems and locked with a key—either literally or figuratively. But it is considered a public cloud if a company’s IT assets are located in servers that also help other customers. That may be cheaper, but it implies less security and privacy.