Should Small Businesses Move to the Cloud?

Cloud isn't always the right answer. I've seen small businesses save money moving to AWS, and I've seen others spend more than they did on-premises. The difference is understanding what you're getting into.

Where Cloud Makes Sense

Variable workloads. If your traffic spikes seasonally or unpredictably, cloud scaling beats buying hardware for peak capacity that sits idle 90% of the time.

No IT staff. Managing servers requires expertise. Cloud providers handle patching, hardware failures, and infrastructure maintenance. For a 10-person company without dedicated IT, this is valuable.

Remote teams. Cloud-based tools work from anywhere. No VPN configuration, no on-prem servers to access remotely.

Rapid growth. Adding capacity in cloud takes minutes. Adding on-prem capacity takes procurement, shipping, and installation.

Where Cloud Gets Expensive

Steady, predictable workloads. If you run the same compute 24/7, you're paying a premium for flexibility you don't use. A dedicated server or colo might be cheaper.

Heavy data egress. Cloud providers charge to move data out. If your application transfers large amounts of data externally, those costs add up fast.

Lift-and-shift migrations. Moving an on-prem VM to a cloud VM often costs more. Cloud benefits come from using cloud-native services, not just running the same workload somewhere else.

Complex compliance requirements. Some industries have data residency or handling requirements that complicate cloud adoption. Not impossible, but adds cost and complexity.

What to Evaluate

Total cost of ownership. Don't just compare compute prices. Include:

• Storage and data transfer costs
• Reserved vs on-demand pricing
• Support tier costs
• Migration effort
• Training time

What you're giving up. You lose direct control. Provider outages affect you. Pricing changes affect your budget. These trade-offs are usually worth it, but acknowledge them.

Your actual requirements. Do you need 99.99% uptime or is 99.9% fine? Do you need enterprise support or is community knowledge enough? Over-specifying requirements leads to overspending.

My Recommendation

For most small businesses, cloud makes sense for:

• Email and productivity (Microsoft 365, Google Workspace)
• Customer-facing web applications
• Backup and disaster recovery
• Development and testing environments

Consider on-prem or hybrid for:

• Large databases with steady load
• Workloads with significant egress
• Environments with strict data locality requirements

Key Takeaways

• Cloud isn't automatically cheaper - model your actual costs before migrating
• Variable workloads benefit most from cloud elasticity
• Steady workloads may be cheaper on-prem or with reserved capacity
• Data egress costs catch people by surprise - factor them in
• Most small businesses benefit from cloud for email, web apps, and backup
• Don't lift-and-shift - redesign for cloud or stay on-prem