You’ve got to spend money to make money.
So the old adage goes, but with the advent of scalable technology from the cloud, that may need to be updated to, ‘you’ve got to spend money to save money’.
Why scalability should be your biggest concern
Lewis and Churchill famously described the stages of small business growth in their Harvard Business Review article:
- Stage one is all about striving to stay afloat
- Stage two has you established as a workable entity, but the major goal is still survival. ‘They key problem thus shifts from mere existence to the relationship between revenues and expenses…and the owner is still synonymous with the business.’
- Stage three means you’ve reached a certain level of success: ‘cash is plentiful and the main concern is to avoid a cash drain in prosperous times.’
Cash flow, time and growth therefore remain your top priorities even a few years into your startup. Managing infrastructure load, spending vast sums on software licenses during periods of growth (that you might not need at quieter times) and dealing with lack of predictability in your IT expenses are all distractions from those priorities.
This is where the scalability of the cloud proves to be a life (or business) saver.
So when it comes to technology what exactly do we mean when we say scalability? Well according to SearchDataCentre it’s this:
It is the ability of a computer application or product (hardware or software) to continue to function well when it (or its context) is changed in size or volume in order to meet a user need.
In other words, it means as your business grows, your demands increase and your staff multiply, the technology you have is able to grow easily and organically with you. It also means that if things get a little slow for a while, it can scale back down with ease.
Scalable technology therefore refers to functionality, cost and speed of availability. And the advent of the cloud has meant that a range of services and platforms now offer you exactly that.
Say you’re developing an online business. Your first and foremost technology-buying decision is what infrastructure to build and host that website on. Sure you could put a server under the stairs that will suffice for a while. But say you do well and one server is no longer sufficient for the number of hits you’re getting. Then you grow a little more and take on a couple of engineers and get an office? How do they access the server? Is it still safe under your stairs?
Every time you grow you face more expense and risk, neither of which are easily quantifiable.
If instead, however, you had started out investing in a cloud infrastructure, like Microsoft Azure, things could have run a lot more smoothly. It’s a fixed monthly cost with set prices for increasing capacity when you need it. You don’t have to worry about storage and security – that’s the cloud vendor’s job – and since it’s based in the cloud your engineers can access it to develop the site from anywhere any time. In fact, it may even mean you can delay getting a physical office and save up those vital pennies for customer acquisition or further site development.
Plus, as David S Linthicum, blogger at InfoWorld says, when you don’t have to worry about managing on-site infrastructure and security, ‘you can focus on the core issues around IT: defining and implementing core business processes.’
Everyday scalable technology
‘Start early looking at production automation, proven process technologies, and minimum staff approaches,’ suggests Martin Zwilling. Creating an attractive and viable startup means minimising costs and bureaucracy. The scalable answer here is software-as-a-service.
Once again, this means predictable monthly costs that you can increase or decrease depending on need. And it means you don’t have to reinvent the wheel with every process and business development. Apps exist that helps you manage your accounts, your time off and HR and project management, to name a few.
Even if you are right at the start of your startup, investing in SaaS could save you serious money. Email and calendars are pretty much essential right from the off for any business that wants to be taken seriously. Microsoft Office 365 and Google Apps are perfect examples of scalability built for success: they offer company email that you pay for per user, meaning you can predict the cost of a new hire and know exactly how much you’ll save if you have to let people go.
Plus you get shared document storage and basic office programs for documents and spreadsheets. This is a big improvement on old-school licences and in-house email servers that were costly, cumbersome and extremely limiting. Plus upgrades are automatic, there’s no new licences or difficult installations – just permanent access to the best version that’s available.
Pay now, save later
It might feel odd signing up to services that are well beyond your immediate startup need, but when you start to grow and they prove reliable, safe and flexible you’ll soon realise that doing so will have saved you not just pounds and pennies, but stress and valuable time too.