Why cloud sprawl can hurt small businesses, and how to avoid it

In many ways, running a successful small and mid-sized business (SMB) can be more difficult than leading a large enterprise. SMBs lack the capital and resources available to their mammoth counterparts, which often limits their ability to access quality technology that can increase efficiency across departments. These services include enterprise resource planning (ERP) for finance teams, customer relationship management (CRM) for sales departments, and human capital management (HCM) for HR functions.

Most SMBs need more than a few services to run their businesses effectively. Increasingly they are finding that turning to the cloud provides a cost-effective, low-maintenance alternative to traditional computing systems. Very often these services run in the public cloud and integrate securely with the business for authentication and data.

In today’s world of best-in-class point solutions, often they will source each of these cloud services from different vendors, residing in different cloud settings. Getting these services from different vendors ensures that each is matched to the requirements of each function. But the combination of multiple cloud providers introduces a new, broad set of issues and challenges for SMBs — the most notable is called “cloud sprawl.”

Cloud sprawl occurs when an organization has too many cloud instances, services or providers which become overwhelming and cumbersome to manage. Instead of benefitting from the flexibility and convenience of having third-party providers take care of its computing, the organization faces a new burden of managing all the complex interactions between each of the separate cloud platforms. A few things become particularly difficult for small businesses when it loses control of its cloud computing resources in this way:

Software updates and upgrades

The updates and upgrades to different cloud services have to be coordinated and tested regularly because there may be coupling between the services. For example, CRM may break when ERP is upgraded, because the ERP vendor is unaware of the dependency. Since cloud services often upgrade several times a year, this can mean the organization has to manage constant rounds of coordination and testing by an integration expert.

Vendor agreements

Agreements generally vary from one vendor to another. The Service Level Agreements (SLAs) have to be rationalized across vendors, which can be onerous when each is honoring a different set of commitments. The organization has to track each agreement separately.

Enterprise-level reporting

To get a complete picture, reports generally require data from multiple cloud services. Each cloud service may not have the same data definitions or the same key fields, making enterprise-level reporting hard, if not impossible, to achieve. Further integration work or additional third-party tools may be needed to bring it all together.

How small businesses can avoid cloud sprawl

Once cloud sprawl has set in, it can be very difficult to manage, especially for an organization that has limited IT resources to draw on. The best way for small businesses to avoid cloud sprawl is to select cloud providers carefully from the outset.

As companies evaluate potential additional cloud services, it’s important to ensure compatibility with current solutions. One way is to evaluate each service in turn to assess how well it works with the others. Another approach is to invest in an integration hub that manages how each service connects to the others. But perhaps the easiest approach is to engage a vendor that provides a comprehensive set of cloud services to run your business. This way, the vendor takes care of making sure that software updates and upgrades are already coordinated and synced, there are a limited number of vendor agreements to manage, and enterprise-level reporting is part of the package.

It’s very easy for SMBs to miss out on the benefits of moving to the cloud due to the unexpected complications of cloud sprawl. Be aware of the potential pitfalls and take this into account when evaluating cloud providers.