Hindsight always brings wisdom.

When i was in college, I worked on a website that highlighted green issues. It was during the the dot-com boom and we, as in a bunch of college kids, thought we could combine social entrepreneurship with making money.

Easier said than done.

For a small business, our operating costs were pretty high. We were renting an office, bought expensive computer equipment, and deployed security (though, I still don’t have a clue what thieves would have found in our office!). Oh, and we also bought expensive proprietary licensed software such as Microsoft Word, Excel, and Access to improve productivity. Needless to add, we failed miserably (although, it was a great learning experience).

I am sure we would do things differently with today’s technology. I am sure we would be less concerned about investing in expensive enterprise software solutions. Instead, we would substitute expensive productivity applications with cheaper on-demand SaaS solutions. Or, even free ones.

Maybe, you are wondering about productivity applications and what the big deal about them is. The idea is pretty simple: technology has shortened average business cycles through instant communication (think chat software such as Yahoo and Skype) and information processing (think word processing software and excel sheets). However, a key drawback with most such software is that they are expensive and proprietary. In addition, until recently, collaboration was a limited affair.

Cloud-based software changed all that. In addition to providing standard word-processing capabilities, cloud-based software lends itself to collaborative capabilities.

There are enormous benefits to using cloud-productivity software.

For starters, such applications enable collaboration across geographies. This is because the actual application (or software) resides in the cloud. What this means is that you can access it from anywhere in the world. All you need is an internet connection. Think about it as a word document floating in a technology cloud. Great, isn’t it?

Then there is the other obvious benefit of cost-saving. This means that you don’t need to buy an exclusive license for each user. Instead, you can pay per use or per user or, even, in some cases for a specific time-period of use. Cumulatively, this works out much cheaper than paying a hefty amount for license fees. The cost-saving can also be indirect in some cases: you can cut down on real-estate costs by working from home!

The third tangible benefit to cloud-based software is that they could be bundled in a suite of applications that are Internet-enabled and work across multiple platforms including traditional software such as Microsoft Word and Excel. What this means is that you can pretty much shift your entire business to the cloud in a short time, without any loss of information and, ahem, productivity.

Cloud-based productivity applications come with a caveat, though. Although they are fairly feature-rich, they do not have the bells and whistles normally found in proprietary software. In addition, some organizations are not comfortable with the idea of their data being stored in a public cloud (though, of course, that organization can always opt for the more costly private clouds).

Regardless of their cons, I still think cloud-based productivity applications are great for small businesses.

Let’s go back to my example and see how things could have been different:

1.Investment in real estate: Not required

2.Investment in proprietary and expensive software: Not required

3.Investment in separate collaboration software: Not required

4. Collaborating on projects with green experts across geographies: Yes, please!

Now, you see how things could have been different.

Article by Rakesh Sharma – editor at Getapp.com

Rakesh studied computer engineering, worked as a technical writer, and recently graduated as a journalist. He is interested in the intersection between technology, business and journalism. He enjoys good food, wine, and travel. Rakesh can be contacted at editor@getapp.com