How do you think about the information technology in your business? Do you see it as just another business expense? Or as a cost-centre rather than a business facilitator and balk at upgrading your hardware and software because of the mammoth costs involved? If this is you, wake up: technology is here to make our lives easier and our businesses more productive. Especially as a new technological model called cloud computing is set to shake up the savvy entrepreneur’s world.

It’s a great name, isn’t it, cloud computing? It’s a term that signifies a radical shift in the way we think about IT. Here’s how it works. At the moment, most businesses buy licences for software that gives access to the application on a 24/7 basis. The trouble is, most of us don’t need to use software around the clock – so why should we have to pay for it when we’re not using it?

A good example is Microsoft PowerPoint. This piece of software is routinely included in Microsoft’s Office suite of products – but no organisation needs to use this software all the time. Under a cloud computing model instead of having to pay for the privilege of accessing this application whenever you want, you’d only need to pay when staff members actually use it.

When cloud computing takes off, all the cutting edge software and hardware enterprises need will be located ‘in the cloud.’ The cloud is a concept rather than a real space, and it comprises data centres run by specialist hosting companies, which house hardware like servers, that run state-of-the art software, supplied by software vendors.  Businesses that use IT services in the cloud only pay for the hardware and software they use and don’t pay for access to software and hardware – for example unused server capacity – they’re not using.

Here’s an example of how small businesses can use cloud computing. Let’s say each month you send out an email newsletter with a special offer or promotion and typically, hits to your website increase five-fold for two days after the newsletter is sent out. You have a number of choices here. You can let your site crash during that time because your servers can’t handle the increase in traffic. You can upgrade your servers to cope with the traffic spike, then have them sitting idle outside the time of the monthly email distribution. Or you can enter an agreement to access capacity from service providers in the cloud while traffic to your site remains high, and cut back this access when you don’t need it.

A whole heap of IT companies are currently preparing hardware and software solutions to give small businesses access to cloud computing technology – for example, the new IBM LotusLive iNotes cloud service allows customers to move some or all of their email to the cloud.

Telstra, Microsoft and Google, as well as a plethora of smaller companies, also have cloud-based applications for small business and it’s worthwhile checking their websites to see what they offer to help you use technology to increase efficiencies and cut costs in your business.