What Small and Medium Businesses Should Consider When Selecting a Cloud Service Provider

How far along is your business’s digital transformation? What was once a buzzword has now become commonplace for organizations looking to move manual, disconnected business processes from on-premises servers to the cloud. So it’s no surprise that cloud computing has become an increasingly popular option for businesses of all sizes, offering flexibility, scalability, and cost-effectiveness. But according to recent cloud IT investment trends, it’s predicted that only 30 percent of small and medium businesses (SMBs) will shift half of their workloads to the cloud by 2025. For the remaining 70 percent of SMBs that are perhaps moving at a slower pace, we understand how challenging it can be: there are many cloud service providers (CSPs) to chose from and it can be difficult to know which is right for your business. Whether you’re just starting to explore the cloud or looking for further growth, this blog post we’ll define the fundamentals of the cloud for non-technical business leaders, challenges, and benefits, so you can make an informed decision.

What are the most common cloud deployment models?

Although cloud computing is often portrayed as a single option, there are various types available. For SMBs that are expanding, it can be difficult to distinguish between these different types—including pros and cons of cloud providers. Therefore, it is crucial to create consistent definitions of cloud offerings to develop awareness in your company. If you’re one of the many SMBs with few or no in-house IT resources, this can help you make more informed investment decisions.

Public cloud

Public cloud computing is a service-based model that allows for the on-demand delivery of IT resources over the internet, with pricing that follows a pay-as-you-go approach. Public cloud services are highly scalable and provide on-demand access to resources, making them ideal for businesses and organizations with fluctuating or unpredictable workloads (such as website capacity for e-commerce and travel booking). One of the main advantages of public cloud services is their cost-effectiveness, as users only pay for the resources they use, and there are no upfront costs or capital expenditures required to set up the infrastructure.

Private cloud

On the other hand, private cloud is a service model that provides computing resources, such as virtual machines, storage, and applications, to a single organization, rather than being shared among multiple users. The infrastructure can be hosted on-premises or in a data center, and the organization has full control over the underlying hardware and software. It can be challenging setting up and maintaining a private cloud, as it’s expensive and requires specialized skills. Customers in highly-regulated industries, such as healthcare and finance, often use this model.

Hybrid cloud

In a hybrid cloud service model, an organization can combine elements of both public and private clouds. An organization’s data and applications are split between their private cloud infrastructure and a public cloud provider, and the two environments are connected through a secure network. It allows you to take advantage of the scalability and cost-effectiveness of public cloud services while maintaining control over sensitive data and applications through a private cloud.

What are the types of cloud computing models?

While using a public cloud provider, there are different ways organizations can utilize their services, each providing different levels of control over the underlying infrastructure, catering to different user needs and use cases. As cloud computing has grown in popularity, several different consumption models have emerged to provide customers different levels of control, flexibility, and management.

Infrastructure as a Service (IaaS)

IaaS provides fundamental components for IT infrastructure, including networking, virtual/dedicated hardware, and data storage. It offers flexibility and control over resources, making it ideal for migrating workloads to the cloud without major application modifications. It also removes the need to purchase and maintain physical infrastructure.

IaaS requires skilled IT staff or consultants to manage and support the infrastructure. Key roles include cloud architects, system administrators, network engineers, and security specialists who handle tasks such as architecture design, system management, development operations engineers, network configuration, and security implementation.

Platform as a Service (PaaS)

PaaS eliminates the burden of managing underlying infrastructure, such as hardware and operating systems, resource procurement, and capacity planning, enabling organizations to concentrate on deploying and managing their applications. For instance, Amazon Web Services does the heavy lifting of data center operations. It also removes the operational burden of managing operating systems and applications with managed services. This permits you to focus on your customers and business projects rather than on IT infrastructure.

PaaS implementation requires IT staff or consultants including platform administrators, application developers, database administrators, development operations engineers, security specialists, and support personnel.

Software as a Service (SaaS)

SaaS is a model where users have access to fully-functional applications operated and managed by the service provider. SMBs can use the software without worrying about infrastructure maintenance or service management. SaaS applications, accessible via the internet, include project management, editing, design, and business intelligence tools that can be accessed from nearly any device.

SaaS implementation requires skilled IT staff or consultants for various roles including software developers, quality assurance testers, product managers, UX designers, technical support, operations engineers, security specialists, and data analysts.

Learn more from your SMB peers in industries such as travel, healthcare, media, finance and more. Seek inspiration and get exclusive offers in the AWS Connected Community

Six considerations when selecting a CSP

SMB leaders should carefully evaluate the following attributes when defining their cloud requirements and seeking a CSP. This should be part of your checklist while researching.

Security

It’s estimated that 43 percent of cyber issues now target small or medium-sized businesses. Cloud-based security is designed to enhance physical security and address compliance. When considering a cloud provider, be sure to understand the physical security and resiliency controls in place, the third party regulation and frameworks they support, as well as the certifications they’ve achieved. Flexibility is also key, as you may want to integrate security solutions you’re already using with your cloud account for ease of use and to get a greater return on your existing investment.

Total cost (and value) of ownership

SMB leaders should consider the long term value of their cloud investments. Cloud value of ownership refers to the benefits and costs associated with using cloud computing services. These could manifest in different forms, but it is essential to identify the key metrics that matters to your SMB. Some of the common cloud value propositions are:

• Cost Savings: Does the CSP provide ways to optimize your cloud spend over time? This might include saving plans, discounts, and programs to help migrate to the cloud.
• Reliability: CSPs typically have robust infrastructure and measures in place to ensure high uptime for their customers. If your SMB operates in e-commerce, this is especially valuable for your website and app to ensure no potential sales are lost. It is important to compare various CSPs and their uptime history over time.
• CSP experience and reputation: A CSP with more experience in your industry is likely to have a deeper understanding of the challenges and opportunities of cloud computing. They may have better security measures and a wider range of services and features. Additionally, an experienced CSP may have an established track record of successful cloud implementations and satisfied customers.

Partner ecosystem

SMBs such as yours may not have dedicated in-house IT staff or regularly encounter a skills gap. Selecting the right IT partner is key in filling that gap and advancing business outcomes. SMB leaders should consider CSPs offering a global community of diverse partners who will be able to support the unique needs of the business across technology, industry, and geography. A mature CSP should offer access to partners such as Independent Software Vendors (ISVs), System Integrators (SIs), Solution Providers, and Resellers. Together, they all offer expertise to those who do not have strong IT support in-house.

Virtual marketplace

Did you know your favorite software might already be available in the cloud? Researching it on a CSP’s virtual marketplace can help your SMB keep its third-party software spend more economical. Marketplaces can also introduce you to new and familiar tools to keep your business efficient. As added benefits it simplifies procurement, can provide greater savings, and consolidate billing into one monthly invoice.

Solution capability

SMBs should prioritize a CSP that offers a broad range of solutions, drives innovation, and can accommodate their growing business in size and complexity. This can enable your business to be more flexible, reduce costs, attain expert support, future-proof operations, and enhance security.

CSP support model

SMBs should choose a CSP that provides flexible support plans designed based on the operational and business needs. Mission-critical workloads need a support plan that satisfies strict service-level agreement requirements whereas less time-sensitive workloads could function well with a lower level of support. Read about the types of support AWS offers SMBs.

Why do SMBs choose AWS as their CSP?

SMBs prefer AWS due to its comprehensive offerings which help digitize operations at a scale that supports companies of their size. AWS also provides robust security measures, flexible pricing models, and cost optimization tools. SMBs benefit from AWS’s analytics and data services, which allow them to extract valuable insights from their data. Moreover, AWS’s scalable infrastructure enables SMBs to quickly test and innovate, bringing new ideas to market quickly.

Security is a top priority for AWS. We employ a Shared Responsibility Model, where AWS protects its cloud infrastructure while customers focus on securing their individual files. AWS customer Fair Place Finance accelerated their development process by 30 percent and successfully launched a secure and compliant investment app in the regulated finance market. Further, an IDC report found AWS customers experienced 43 percent fewer monthly security incidents and a 69 percent reduction in unplanned downtime. However, it is crucial to prevent application-level risks such as public access to the cloud environment and unsecured networks.

As mentioned earlier, CSPs offer a pay-as-you-go pricing model and AWS is no exception. SMBs can scale their IT infrastructure based on demand, paying only for the resources they consume. This eliminates the need for upfront capital expenditures on hardware and reduces ongoing maintenance costs. Additionally, AWS provides cost optimization tools and services to assist SMBs. A 2022 IDC study found organizations that used AWS Cloud, instead of on-premises data centers, were able cut their yearly IT expenditures by 25 percent. Mikatasa migrated their core workloads to run on the AWS Cloud and the total cost of ownership reduced by 30 percent. Read more about cloud financial management principles for SMBs.

With AWS Cloud’s Artificial Intelligence, Machine Learning, data warehousing, business intelligence, and interactive query analysis services, SMBs can unlock the full potential of their data. These services empower SMBs to gain valuable insights, make data-driven decisions, automate processes, enhance customer experiences, and identify new business opportunities. In fact AWS’s culture of continuous innovation benefits customers by enabling swift responses to market needs. For instance, ProDoctor utilized AWS services to deploy a secure telemedicine solution within a mere three months.

Finally, AWS was recognized as a Leader in the 2022 Gartner Cloud Infrastructure & Platform Services Magic Quadrant for the 12th consecutive year. We are widely regarded as the market leader with extensive operational experience. We offer a compelling package of security, cost optimization, insights, and innovation, making it an attractive choice for SMBs.

Next steps

Cloud has become the top IT priority for SMBs. With the right cloud provider, SMBs can build a better business, identify new sources of revenue, and develop innovative solutions to serve customers. Are you ready to see how AWS Cloud can help your SMB unlock new possibilities and oversee a seamless migration to a secure cloud? Contact us or learn more on our Smart Business website.