Hardware costs are barriers to growth and stability

Unless you are a Silicon Valley unicorn, small and medium size firms, especially newer ones, usually face serious limitations to accessing the funds to finance significant capex investments. This can be a particular problem with the IT hardware necessary for the growth of the business as well as for backup and redundancy.

Today we’re talking about two areas where hardware requirements create problems and what can be done about them.

1. Hardware is tiered. One of the frustrations about scaling up a business is that hardware can’t be scaled up in a smooth line. Instead, you have to add new hardware in discrete increments. If you were to graph it, it would look like a set of stairs. For example, if your server can handle a maximum of 200 clients, when you get client client number 201 you have to buy an additional piece of hardware and space for 199 clients will now be sitting empty. This can force small firms to limit growth, and the limited growth limits the revenues necessary to fund these capex projects.
2. Disaster recovery plans require redundant hardware. Things can go wrong and hardware can fail. Consequently, it is necessary to have redundant hardware available in case of some kind of disaster. This is particularly true because if any part of your IT infrastructure fails, that it could mean serious downtime and studies show many small firms never recover from being offline for any significant period. They don’t have the deep pockets to weather a loss of any of their client base. The problem is that redundant hardware is a drain in capital funds small firms just don’t usually have.

What is a small business to do? Take advantage of the cloud. This offers the opportunity to completely offload much of your hardware. By using a cloud provider’s services, you get two key benefits.key advantages First, you need only use as much capacity as you need, and you can ramp up and down as needed. You eliminate unused capacity.You use what you need.The cloud provider handles having the necessary hardware capacity.

Second, cloud providers offer redundancy and multiple locations, so if anything fails, including an entire physical site, you are unaffected.

In summary, the cloud offers a great way workaround to the problems of limited capital to support large capital expenditures, so you can start to focus on building your business.