Gone are the days when cutting edge technology belonged solely to big corporations and institutions. Today consumers and small businesses alike have access to a wealth of computing applications, equipment, and devices brimming with power and sophistication. We’re talking about advanced mobile technologies, data-center consolidation, server virtualization, SaaS, PaaS, outsourced data security and backup, and cloud computing. This technology, coupled with the natural flexibility and affinity for innovation inherent to many small businesses, may actually give them a competitive advantage over larger companies.

As further testimony to this trend, a recent post at Informationweek pointed to the fact that many tech firms are actually optimistic about the continued growth of these technologies even as sales in other industries are stagnating and declining in response to a weakened economy. A significant part of this market consists of small businesses eager to trim operating expenses and improve the efficiency and efficacy of their operations.

As technology continues to advance, and more people get comfortable with the idea of using it for their businesses, we can expect the emergence of population of tech savvy small businesses that will keep the big guys on their toes.

All this brouhaha is for good reason. Cloud computing represents a fundamental change in the way consumers and businesses are using their computers and mobile devices, and it is a trend that small businesses cannot afford to overlook.

The following is a simple guide to cloud computing and how it can be used to enhance your small business:

What is cloud computing?

First of all, the “cloud” is just another name for the Internet, and thus cloud computing really refers to any services and applications that are hosted and accessed via the web.

It came about as a convergence of several technology trends namely, software as a service (SaaS), Web 2.0, open source software, and grid computing.

How can cloud computing be used in the small business?

Cloud computing allows small businesses to remotely manage and store information, and access customized software or services from virtually any device with Internet access.

Popular small business SaaS applications involve customer relationship management, finance and accounting programs, human resource management, and document collaboration

Small businesses can also use cloud computing technology to boost their storage capacity via online storage services and create online backup and archiving accounts.

What are some popular applications currently being used by small businesses?

Google Apps- for “…a custom email address, tools for word processing, spreadsheets and presentations, a shared calendaring system and access to a flexible intranet system.”

Salesforce.com- specializes in on-demand customer relationship management (CRM) software and services

Infusion CRM- provides a web-based, centralized customer management

Netsuite- offers “integrated web-based business software suite, including Accounting software / ERP software, CRM software, and Ecommerce software.”

QuickBooks Online- “Online accounting software for small businesses–keep track of expenses, invoice clients and manage payroll…”

FieldOne offers full management suite for service professionals and businesses with industry specific applications, such as HVAC software in addition to general order tracking and other broad business automation.

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SAP recently unveiled its own software package called Business ByDesign offering a range of on-demand enterprise applications via a dashboard.

What are the benefits of cloud computing?

• Reduce hardware and software expenses: Cloud computing allows small businesses to save on expensive hardware, software, and maintenance costs since data and applications are being held on remote servers. (This may be particularly attractive to new small businesses since it reduces start-up costs). Most companies have affordable monthly rates so expenses can be spread out comfortably over time.

• Increase ease and flexibility: Users can access their business services and applications through almost any device with an Internet connection including laptops, mobile phones, and PDA’s. It is also easy to add new users to the system when you need them.

• Streamline your IT department: Cloud computing allows your in-house IT department to focus on projects that can enhance the business and be free from the more mundane tasks, such as dealing with glitches in the software or maintaining the company’s servers.

What are the drawbacks or concerns with cloud computing?

The two biggest concerns for small businesses are downtime and security. If your service provider’s network is down, it can bring your whole business to a grinding halt. And many are still wary about the security of data stored and accessed in the cloud.

Among all of these posts there is a central theme: Small businesses are operating in a world where Information Technology is extensively changing the way people live and work. The emergence of Web 2.0 and the proliferation of versatile mobile devices supports a culture of instant information and global connection. People are not only itching to share both themselves and their knowledge with the world, but they want their own queries to be fulfilled efficiently and accurately.

Small businesses should take note. In order to run a successful business these days, it is essential that you get a foothold in several key areas, namely:

• The Internet. Don’t underestimate the power of the Web on your bottom line. A Web presence, no matter how small or basic will let online users know that you exist. Even if you do not have a website, it is essential that you register your business by any local search engines as well as relevant Point of Interest databases.

• Mobile Technology. This is extremely important if your small business has employees who do field work (work outside of the office) or who frequently go on business trips. According to research conducted last year by Aberdeen Group, 48% of nearly 700 respondents stated that the challenge of managing a decentralized workforce was a prime motivation behind investment in mobile business solutions, while 33% stated that the motivation stemmed from trying to reduce operational costs.

• Software as a service (SaaS). On-demand software (also called software-as-a-service or SaaS) may be the perfect solution for many small businesses that are lacking the infrastructure to effectively operate various aspects of a business such to payroll processing, and reporting on sales and marketing. These software applications that are leased over the Web or to mobile devices from an outside vendor. There are also industry-specific SaaS programs designed to help businesses operated more efficiently.

• Proper data security. To be successful these days small businesses need to know how to properly protect any sensitive business data and customer information including as names, social security numbers, pin numbers and access codes. You can do this by installing up-to-date anti-virus software on all computers, setting up a corporate firewall, securing your mobile devices, and making sure that you have a reliable method of data backup.

While big corporations may have the resources to test the waters of emerging technologies and thus place themselves at the cutting edge, small businesses with their limited resources are often left to wade through the currents with little sense of direction.

Many claim that small businesses cannot afford to pass up on these industry-shaping trends, while others suggest that they be ignored- at least for now.

But the truth is, that while small businesses should certainly take note of the following trends in business technology, the answer to how much to invest in them will really depend on the particular nature of each small business and the resources available to it.

1. Mobile technology is spreading its wings. The emergence of sophisticated mobile devices, such as the iPhone and Blackberry Curve, and an eminent explosion of mobile software applications promises small businesses greater flexibility, effciency, and coordination that will help maximize resources and create growth opportunities. Small businesses will increasingly rely on their smartphones for unified communications, network synchronization, and location-based services.

2. Software as a service (SaaS) creates opportunities. On-demand software (also called software-as-a-service or SaaS) refers to software applications that are leased over the Web or to mobile devices from an outside vendor, such as NetSuite. These hosted software applications provide the infrastructure needed to effectively and efficiently operate various aspects of a business- from sales and marketing reports, to payroll processing, and a slew of location-based services, such as Vettro’s application for mobile devices that helps utility crews and excavators navigate around buried cables and pipelines.

3. Social Networking and virtual societies. There has been a lot of speculation regarding the earning potential of social networking sites such as, Facebook and MySpace as well as virtual societies, such as Secondlife. What is certain, however, is that these sites offer a new way for small and mid-size businesses to connect with their customers and employees. Retail companies, for example, can create a virtual store, to monitor how many people it attracts and how these people interact with the space.

4. Going Green Tech-style. Much of the hottest techonology today not only helps the environment by reducing the use of utilities and the need to travel, but it also increases employee productivity, efficiencey, and job satisfaction. The use of audio, video and Web conferencing services often reduces the need for business travel, in addition to cutting down carbon emissions. Location-based services for mobile devices also improves the efficiency of operations on the road by effectively directing travelers to their destinations and thereby reducing fuel consumption. Businesses are moving away from paper invoices, statements, letters, and memos in favor of paperless options, such as e-faxes and e-mail.

5. Data Storage. Many small businesses these days need a significant amount of storage to hold their digital assets and information. In response, companies such as Amazon.com (S3 Simple Storage Service) and AOL (XDrive.com) are offering businesses online storage solutions for their web applications. Google is also expected to enter the fray with a “Google Drive.” There are many smaller companies offering storage services, such as Box.net and ElephantDrive.com. Many of these storage services offer up to 25 GBs for free with additional storage and features costing from $2 to $10 per month Some of these companies also offer advanced features such as versioning, personal encryption keys and multiple user log-ins.