Can the Cloud Help Small Business?

Contributed by Wall Street Journal Online

By CICELY K. DYSON

When USstoragesearch.com, a 58-employee property-storage business, went national in 2004, business-development director Bill Hipsher didn’t expect to be spending more than $25,000 a month on information technology within a few years. New software, and the need to manage and maintain servers, required him to look for outside IT support and thus kept the Omaha, Neb.-based company from growing as fast as he’d hoped.

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Matt Miller for The Wall Street Journal
Bill Hipsher, business-development director at US Storage Search, has used online call-center and storage services to reduce IT spending.

Nearly two years ago, Mr. Hipsher moved some of the operations off the company’s own servers and onto the cloud, using services like inContact SAAS +1.60% to operate its call center and Rackspace Hosting Inc., RAX -1.55% which US Storage Search uses to operate 400 separate websites that it owns or manages for other companies.

As a result, Mr. Hipsher says the company—which helps people compare and book physical storage facilities online—is saving up to $7,000 a month on IT, can afford to cut back on third-party IT services and expects to add up to 40 jobs this year.

“We’ve been able to reinvest into what we make,” he says. “Every dollar that we’ve made we’ve pretty much sunk back into what we have.”

There’s nonstop chatter, often funded by the cloud-service industry itself, about the new world of the cloud, in which businesses outsource their computing muscle to a third party. Much of the discussion has been around stories like that of Mr. Hipsher, where a small business saves substantially and can then invest the savings elsewhere in its business.

For many small businesses that have used the cloud for a few years, the experience has largely been positive, but not without drawbacks. Cloud services run by companies like Google Inc., GOOG -0.47% Amazon.com Inc., AMZN -0.60% Microsoft Corp. MSFT -0.18% and Dell Inc. DELL +2.26% attract entrepreneurs because of their convenience and low startup costs. But some customers complain about security measures and entrepreneurs’ lack of control over data.

Data housed in the cloud is stored and processed in centers hundreds or even thousands of miles away from a company’s headquarters. While this lets entrepreneurs decide how much storage and processing power they need, it can also be an added frustration for business owners.

“The only downside would be not having direct control over what you’re doing,” says Mr. Hipsher of US Storage Search. The company still operates about a dozen servers on its premises in Omaha.

The future of IT for small businesses will largely rely on both servers on site and in the cloud. Some small businesses have found using a hybrid of both to be beneficial by backing up data on site and in the cloud. IT costs can be particularly a heavy burden on small businesses, because they don’t have the deep pockets of large corporations.

In late June, several users of Amazon Web Services, the company’s cloud, were hit with a scare when electrical storms cut power to 10 data centers in northern Virginia and the generators shut down. While any infrastructure can and will have issues, “no amount of downtime is acceptable or our customers,” says Adam Selipsky, vice president of AWS.

Small businesses in the U.S. spent $3.5 billion on cloud technology in 2011, up 41% from the $2.2 billion spent in 2010, according to a report by International Data Corp., a technology research firm. In 2012, spending on cloud technology was projected to increase by about 25%.

In 2011, cloud spending by small businesses in the U.S. accounted for around 7% of the $53 billion that was spent on all IT expenditures. IDC defines a “small business” as one with fewer than 100 employees.

Operating servers both on-site and in the cloud is “a very effective way of reducing risk,” says Michael Harries, chief technologist at Citrix Startup Accelerator, a Silicon Valley investment firm that works specifically with software startups. Business owners should make the decision based on the “support they have available,” he says.

Harpaul Sambhi, chief executive of social-media recruitment firm Careerify, says running his company solely in the cloud has allowed him to focus more on business growth. Careerify allows a company to connect to its employees’ social networks in order to find candidates for jobs at that company, be it through Facebook, FB +3.58% Twitter or LinkedIn. Mr. Sambhi uses Microsoft.’s Windows Azure to support Careerify’s storage and data processing.

Mr. Sambhi says because an average employee has about 300 social-media contacts, he didn’t want to burden his staff of 12 with trying to maintain servers that are mining the data of hundreds of thousands of users.

“It’s a lot of work for us,” he says.

Financial benefits and convenience aside, some entrepreneurs are still wary of the security risks. The top drawback for small businesses adopting cloud services in 2012 was data security, according to IDC research.

Louis Barajas, a financial planner in Los Angeles who serves mostly Hispanic and elderly customers, says that while he’d like to incorporate the cloud more into his business, his clients are leery of the technology. Even so much as logging on to their bank accounts online could be a struggle.

“They’re all afraid someone’s going to steal their information because they don’t understand the cloud,” he says. “Even if I wanted to, I couldn’t get them to.”

He says that clients with some understanding of cloud technology are still apprehensive because of the lack of direct control.

“Everybody tells you that the information is safe, and nobody knows where it’s going,” Mr. Barajas says.

Mr. Barajas operates his on-site Microsoft servers at a cost of $400 per month paid to an outside IT company. To ease his customers’ minds about security, the servers are frequently backed up at his company, he says. While his business is mostly operated on in-house servers, he says he doesn’t have a choice on using some cloud-based software, such as eMoney Advisor for financial planning.

“Ideally, it would be much simpler to have everything in the cloud,” Mr. Barajas says.

Providers still see the value in offering both on-site and cloud servers. Dell, which had 14% growth in its server business in its fiscal third quarter ended Nov. 2, says growth in its cloud business isn’t having a major impact on its server-network business.

While Dell acknowledges that some small-business owners would feel safer with an on-site server, Nnamdi Orakwue, vice president of infrastructure cloud service, says Dell has been building better security through acquisitions like SonicWall, which helps customers develop and maintain IT security. The deal was reportedly valued at $1.2 billion.

Maricopa SBDC Small Business Academy

Creating Small Business Economic Impact through Global Partnerships

What does a tutoring service, a consulting firm and a software company all have in common? These thriving locally-owned businesses are all run by graduates of the SBDC Academy (formerly known as HP Life). Due to the overwhelming demand the SBDC Academy has expanded with more than 40 sessions offered in three locations across the valley.

Last year more than 500 business owners attended the SBDC Academy workshops. More than 40 new businesses were launched and existing business added more than 53 new jobs; with some firms doubling their revenues.

The Maricopa Small Business Development Center (SBDC) is part of a global partnership with HP to enable entrepreneurs grow their businesses while creating a stronger local economy. Additionally, the SBDC has partnered with Google and local organizations including the Chandler Chamber of Commerce.

With so many options for training and development, what makes the SBDC Academy successful? SBDC Academy graduate and Chandler business owner Laura Petersen believes the success of the program is simple. “The new SBDC Academy is a great set of courses to help businesses and people with ideas take it them to the marketplace and be successful. I have an entire notebook filled with new tips and tricks that I cannot wait to implement! I feel lucky to have stumbled upon these terrific (and FREE!) classes.”

Kristin Slice, business analyst and program coordinator for the SBDC Academy, believes the reason for success is the business owners themselves. “Business owners learn from each other in an open environment with a flexible format designed specifically for business owners. We expanded a globally tested curriculum and incorporated feedback from hundreds Arizona business owners.”

The next series of workshops starts in February in Surprise, Chandler and Phoenix. Visit http://www.maricopa-sbdc.com to register. The SBDC Academy is free but space is limited.

“We are committed to being the go-to resource for small business. Not just putting together resources we think they want. We use technology to create a community of on-going empowerment and connection between small business owners. We have taken the time to evolve the program. We are proud of what our graduates have done and we are excited to see what the future holds,” says Slice.

If you are a member of the media and would like more information on the SBDC Academy please contact,  Mark Engle                                                                                            Email: mark.engle@domail.maricopa.ed, (480) 784-0590

Small Business Owners attending our great hands on workshops.

Small Business Owners attending our great hands on workshops.

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Get some good training in 2013!

The Maricopa SBDC is pleased to wish you all a Happy New Year! We have enjoyed a great 2012, and stand ready to help your small business even more in 2013!

Why not make a new years resolution to get more training? We have our Spring schedule of trainings published and online for signups and registration. For example….

-HP Life program, now called “SBDC Academy” has been rewritten and will be offered in three Valley locations for Spring – Tuesdays in Chandler, Wednesdays in Surprise, and Thursdays in Phoenix. From 4-6 p.m. each day, the classes feature topics such as Marketing Plan Strategy, Marketing Plan Tactics, Financial Plan, Sales, Productivity Tools, Social Media, Email Marketing, Effective Websites, Blogging, SEO and others. These are still offered free, courtesy of Maricopa Community Colleges, our strategic partners such as Chandler Chamber of Commerce, Gateway Community College, City of Surprise AZ Techcelerator, and from a donation from the Hewlett-Packard Foundation. Enrollments are limited so sign up now.

-Brown Bag Workshops will continue for 2013, on Wednesdays from 11:30 to 1:00 p.m. in the following locations Valley wide: Avondale, Glendale, Mesa, Paradise Valley, Phoenix, Queen Creek, Scottsdale, South Mountain and Surprise. We have some exciting topics planned, including Credit Reporting, Financial Management, The Truth About Credit Card Processing, SBA Loans, Recordkeeping, How to Clone Your Ideal Client, Building a Powerful Brand, QuickBooks, Insurance, and many others. Sign up online and remember to bring your sack lunch or favorite deli sandwich (sharing is optional)!

-Technology Programs – we continue to offer quality programs through our association with the Statewide Small Business Incubator Association. Topics coming in Spring include Coffee & Connections – Building a Strong Brand, Investor Pitch program: You Only Get One Chance To Make A Good First Impression, SBIR Proposal Writing Workshop, Patent Clinic, and more!

For all our training for Spring you can find the schedule and links for online signups at our website http://www.maricopa-sbdc.com and go to Workshops & Seminars link.

And have a prosperous 2013 for yourselves, family and small business success!

-Mark Engle, Director

Couch Commerce: How Tablet Shoppers are Changing Online Sales

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Five great lessons from the creator of Startups.com

We acquired the domain name Startups.com a few years back. We briefly tried a Q&A site for entrepreneurs and startups, but that didn’t work out. Then last year we decided to launch Startups.com as a daily deal site for webpreneurs. After one year we had to pull the plug.

This post is my personal reflection on what went wrong. The paint is still fresh, and I’m still a bit sore with the pain of failure on my shoulders… but it’s not the first one in my entrepreneurial life. I am moving beyond it and focusing on what I’m really passionate about.

Genius former chess champion Garry Kasparov said something to the effect of, “I have always learned something from the games I lose that helps me become victorious in the next game.” I am trying to adopt that attitude by offering this reflection upon what went wrong with Startups.com in the hopes that it will help other entrepreneurs.

Lesson 1. Do your thing

Money follows passion, not the other way around. It’s almost impossible to have a great vision for something you if you don’t have the passion for it. But as Sam Walton put it simply, “Capital isn’t scarce; vision is.”

Do your thing, and don’t let other people (or things) distract you from your own path. It’s very hard to do when you read over and over again that Groupon is kicking ass, or how Instagram was an overnight success (which was hardly “overnight” when you scratch the surface of the people involved).

Temptation is everywhere, but you know what? I came to realize that temptations are only tempting when you’re not doing your own thing. If it’s truly YOUR thing and something you’re passionate about, hardly anything can get you more excited than what you’re already doing.

Clearly selling isn’t our thing, publishing is. Publishing attractive and inspiring content to help webpreneurs become more successful. We thought we could also help webpreneurs with deals. Wrong call. Publishing is one thing, and selling is something very different. It involves customer service 24×7, lead generation, funnels, merchants, refunds, and a huge list of etceteras.

Follow your passion, do your own thing, and don’t let distractions and what may seem like bigger opportunities distract you from YOUR thing. If you get distracted, it means you haven’t found your thing just yet… but that’s okay. Just keep looking.

My key takeaway from this is: Don’t chase the new flavor of the month, because it’ll surely become “yesterday’s online fad” as Seth Godin discussed in his awesome post about, “How To Make Money Online.”

Takeaway #1: Just do your own thing, keep your head down, and hussle.

Lesson 2. There are no shortcuts

From afar, your neighbor’s greener pasture looks very nice (and much greener!) That happens here on The Next Web as well, when we read about the latest startup to getting funding, or the biggest acquisition this week.

You are not your neighbor. Be yourself, and stick to it no matter how long it takes you. You wanna be doing all of the latest, greatest things, because from afar, nothing looks complicated. But again, execution is what counts, and that’s what makes the difference at the end of the day.

At Startups.com we decided to take a little shortcut and we bought a script for a daily deal site. We wanted to move fast and cut corners everywhere we could. In retrospect, it doesn’t seem to have been the right decision. It took us five months to get where we wanted to be.

One day it struck me: if we had built it from scratch, we’d have done it in 3 months, and it would have been our own fine and dandy, shiny product. Instead we ended up creating Frankenstein. No one had ownership of the beast, and it never worked as well as we had wanted.

Don’t get me wrong, we’re all for open source stuff like WordPress, MySQL, and PHP. I’m not talking about reinventing the wheel here…

I love the story of a butterfly. A good-hearted man saw a butterfly struggling to emerge from its cocoon, and he very gently took scissors and cut open the cocoon, “so the butterfly could get out easier.” Well, it ends up that although he had the best of intentions, a butterfly actually NEEDS to struggle to break its cocoon so it can develop the strength to fly.

Think about the struggles you’re going through with your own startup. Don’t always take the easy path, because you too are developing your skills to become wildly successful. Think of the biggest companies around: Amazon, Apple, Google, Facebook… do they look like a result of a shortcut to you? No. Not by a long shot.

Takeaway #2: The road to success is long, no matter what they say. If you can’t stand it, just think of the alternative: Get a “regular” job, and the road to success will become… infinite.

Lesson 3. Do one thing

Marketplaces are very tough, and daily deal sites are even tougher. The jury is still out about the daily deal sites: are they just a fad, or are they here to stay for the long run like webmail, apps, etc?

Seen from afar, the daily deal opportunity seems pretty easy, but it really isn’t.

In any marketplace, you have to build two sides of the equation at the same time: buyers and sellers. Without the sellers, buyers who come to the site leave right away because they find nothing to buy. Without the buyers, the very early sellers don’t get their merchandise sold, so the ball stops right there: they don’t promote it to their friends, and they never comes back to offer another product.

Marketplaces normally take a long time until they hit the mainstream, like Etsy did a while back.

At the company, besides running Startups.com we were running KillerStartups.com and a bunch of other initiatives that I’m too embarrassed to share with you here. What can you expect from that? Multiple successes? Hardly. We all face limited resources, budget, people, and energy… We have to admit it, and do just one thing. And excel at it. The world is uber-competitive now, if you’re not amongst the best at what you do, most probably you’re not gonna get anywhere.

Every time an entrepreneur reaches out to me for advice, I tell them the story of when I was a little, 8-year-old boy. At school they taught us how to light a piece of paper on fire with a magnifying glass. You let the sun shine through the glass, and voila! Fire. But in reality, it’s not that easy, because the critical factor is that you stick with it long enough that the little piece of paper lights on fire.

Well, what did that 8-year-old me try to do? Burn 4 different little pieces of papers at the same time. A little bit of magnifying glass time to each of them. What did I get? Nothing. Later in life I realized that if I want to burn 4 different pieces of paper, I need to stick with the first one long enough until it’s on fire. Then I can use that piece to light the next 3 pieces on fire. Simple, but it’s not always easy to stick with that very first piece long enough.

Takeaway #3: Do one thing, no matter how small. When you have it burning, you can make it bigger, better, faster and stronger… later.

Lesson 4. Know when to fold up your tent and go home

It’s very hard, and there’s no winning recipe for it, unfortunately. And you’ll never know for sure if you did the right thing, or if you screwed it up big time by throwing in the towel. I wish there was an easy way to know for certain if quitting is the best option. Actually, maybe there is… If you’re quitting a project to focus your time, energy and limited resources into something you really believe in, then you’re on the right track.

It’s even harder when you read the Steve Jobs’s quote, “The problem with the Internet startup craze isn’t that too many people are starting companies; it’s that too many people aren’t sticking with it.”

Argh! Painful. Keeps you awake at night and makes you think harder and harder, not to mention adding even more stress to your decision process. But still, you need to move forward, and if you feel you’re going nowhere, maybe shutting down is the best thing to do. Or pivot the same project.

But sometimes you need to kill the old to give room for the new to be born. Sometimes the right solution is pivoting, like what Odeo did when they refocused on Twitter. Or what Catherina Fake did with Flickr.

At Startups.com we were 6 months down the road and we realized it wasn’t working. We couldn’t make it work. Our passion wasn’t in selling, but in publishing. Felix Dennis, founder of Maxim magazine, found that out as well when Maxim tried to approach the catalog business. It wasn’t working for them either. They brought in a consultant who told them point blank, “You’re not creating a sales catalog, you’re just doing a magazine.” And then it hit them: their publishing experience was playing a bad trick on them.

We’re no quitters, so after 6 months we decided to give it our all and 6 months later look at where we were at. Seeing it in retrospect now, it was 6 months too long. Wasted resources, wasted time. The writing was on the wall. But we decided to persevere, on the wrong path, so we lost more money, resources, and lost opportunities doing something else. We should have folded 6 months ago rather than keep going and going for an extra 6 months… in the wrong direction. Lesson learned, but a very personal call. Pretty hard to pass those learnings along, you’ll have to make your own calls.

Life goes on to live another day. And another project comes up to fire up your belly and you go full force into it. That’s what we entrepreneurs do.

Takeaway #4: It’s very hard to time the end of a project… when that one isn’t working. How would you know if a project is working? Easy: you’ll be happy (yes, despite the never-ending challenges). As simple as that.

Lesson 5. Focus, execution and details

Boring? You bet. But these 3, by far, are the ones I find the hardest things for us entrepreneurs to do. Really. We’re full of ideas, we want to change the world every minute. Wherever we look, we see opportunities. Tons of them. And most of the time, they’re better looking, larger, more interesting, appealing and exciting than the one we’re busy dealing with.

At the ‘idea stage,’ everything seems possible, so unlimited thinking is great. That’s romance, without the hassle of actually doing it. But when rubber meets the road, that’s when things get tough, and romance goes to the toilet. An angry customer on the phone; your site is suddenly painfully slow; you get flagged on PayPal for transactions. A critical employee called in sick. Tons of unanswered emails. Disappointing sales that day. The email server is having issues and you can’t deliver the emails to your subscribers. That gets to your co-founder’s head and instead of a dialog to work things through, you start fighting.

Well, you get the picture… I wasn’t talking about your company, I was sharing and venting some of the things that I’ve experienced..

Our own personality is sometimes our worst enemy. We need to constantly keep fighting that, every single day.

At Startups.com we got enamored with the idea of Daily Deals, but not passionate about the execution and the details of the entire beast. Others did much better than we did, obviously they had the expertise, vision, passion and willingness to make it work, and dive into the details. We didn’t. And it showed, big time.

Takeaway #5: Keep working at your only thing, until you find love in the details. As they say, the devil is in the details (and so is success).

Closing thought: I took something I read from Internet entrepreneur Jason Calacanis when I emailed Noah Kagan at AppSumo to say: “You win. We lost. Next.” The day you stop thinking, “there’s still something I could do,” you might just be dead. And dead we’re not. Let’s go full speed ahead, and make it possible.

7 Rules for Your Small Business Home Page

June 19th, 2012, by Sarit Lotem

Most businesses today have a website, but many claim that no one visits their site or comment on it. While it is easy to set up a simple web-site, its sometimes tricky to create an EFFECTIVE one. A website is not just the web face of the business it is also a marketing and sales tool that can be very powerful if created properly. This blog will provide you with tips to assist planning an effective website for your business.

Here are some things to keep in mind when designing or redesigning your site’s home page.

1. Who are you? Does your homepage have your logo (or your business name) displayed in the top left area? Your name and logo is critical to your site visitors and it shouldn’t be hidden. If displayed properly,the next time your visitor see your logo he/she will associate it with your services immediately.

2.Who, What, When, Where, Why & How.
Someone’s just landed on your home page. Quickly tell them who you are, what you do, and where they can find you in case this is the first time they’re hearing about you. Then tell them where they can go on your site to get more of
this kind of information. Your home page isn’t the place to get into your company’s life story or to establish your whole point of difference. You have other pages on your site that should be dedicated toward that, like your About page or your Services pages.

3.Give them a way to get in touch with you.
Put your phone number big and visible on the top right corner. Your “contact me” link and social media links should also be very visible to your client. Your prospective clients should not click more than once in order to get in touch with you.

4.Keep it clean.
Did you use the weirdest fonts that exist and added neon color ? This screams amateur and un-professional. I’m not going to use my credit card on this site!

5.No Flash movies!
While it’s true that Flash-driven sites are very cool, they are usually very heavy and most importantly, Apple’s iPad, iPhone and other wireless devices will not show them. Lose the Flash and make the site look sleek, professional and trustworthy.

6.Avoid clutter.
you don’t want to clutter your homepage up with so many buttons and links that customers start getting lost. Pick what’s important, decide which accounts you want to highlight and focus on those.

7.Create the path you want people to follow.
lead people toward the actions you want them to take, by creating a path you help keep them exactly where they belong – navigating through your site.
A good path is created by focusing on the things you want someone to do and removing the options for them to do what you don’t want them to do.

Your small business Web site and in paticulery your site’s home-page is your chance to grab visitors’ attention, tell them that you have the products they want and turn it into a sale or at least an online contact.

Webmaster is a real job. Hire someone or outsource it.

Seniors and social media: the next frontier?

When social media is discussed, I’m betting that the image of your grandmother and grandfather isn’t crossing your mind. But it is crossing the mind of Brian Lang, CEO of Houston-based Seniors in Touch, a new technology startup.

Seniors, who make up arguably the fastest-growing market in the U.S., have long been ignored in the social media realm, Lang said, and right now, he is one of the few taking advantage of the open field.

I spoke to Lang for this week’s Houston Business Journal Tech Effect feature, which profiled Seniors in Touch, a new touch-screen product designed for seniors. Essentially, Seniors in Touch allows older adults in senior living communities to better connect with friends and family through an easy-to-use, touchscreen computer. It has features such as video messaging, photo albums and health care reports.

The more I thought about Lang’s product, the more I realized how much seniors and even aging adults are left out of social media. Don’t they want to connect just as much as the younger generations do?

Despite some fear of technology, if social media sites started deploying tools specially designed for the ease of older generations, couldn’t seniors be just as active on those sites as millennials?

However, Lang pointed out that most of the developers for social media products are young innovators ages 20 to 31.

“They want to be the next Foursquare or Instagram,” he said. “They compete with one another in the market they understand.”

Also, simply put, senior social media isn’t sexy, Lang said.

But there is a lot of money to be made. Lang pointed out that 40 million baby boomers will turn 65 in the next 19 years. And right now, he said, only about 30 percent of seniors are online.

The best part is, seniors want to go online. Lang said their main motivating factors are to connect with their family, to obtain online health information — for example all social security statements are now online — and to stay accessible.

However, when developing products for seniors, Lang said certain things need to be taken into consideration. Not all seniors have the dexterity to use a keyboard, and their hands often shake. Also, eyesight and cognitive issues need to be considered, so large font and simple products are necessary.

“Seniors have compelling reasons to be online,” Lang said. “Right now, the oldest baby boomers are retiring, and there is a lot more demand as boomers retire.”

On another interesting note, Lang told me that seniors overseas in Western Europe have been shown to use the Internet more than in the U.S. This may be because of the way health care is regulated abroad, so seniors are more comfortable going online to get access to this type of information, he said.

Either way, as the nation’s population ages, more tools will be needed to keep younger generations in touch with older generations. So instead of thinking of the next Facebook, entrepreneurs maybe should be thinking about the next social senior product.

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