Date
23 May 2017
Unlike Facebook Inc., few SMEs can afford their own large installations of servers. Photo: arstechnica.com
Unlike Facebook Inc., few SMEs can afford their own large installations of servers. Photo: arstechnica.com

Why it’s more economical for SMEs to use cloud service firms

There are three reasons it’s a better idea for small and medium-sized firms to use outside cloud services rather than investing in their own servers.

First, the initial investment is smaller.

To set up its own server system, a small firm has to pay about US$5,000-10,000 for the servers and hire a maintenance guy who will probably cost about HK$20,000 (US$2,564) a month.

Paying a monthly fee for cloud services will involve much less fixed costs, a computer engineer told EJ Insight.

Second, performance is obviously a major concern among SMEs when it comes to IT.

Very often, low bandwidth on the mainland may cause a drop in system speed if a company runs its own servers.

“Take logistics firms,” the engineer said.

“If their drivers shuttle between China and Hong Kong, this problem will be more noticeable.” 

The third important concern is flexibility.

Using on-demand service from cloud providers, which typically own big fleets of powerful servers backed by versatile software, SMEs can flexibly lease bigger capacity if justified by business flows and expansion plans, he said.

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FL

EJ Insight writer

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