ANTenna Blog -- Business & E-Business

An on-demand financial services vendor points to a couple of companies who are betting on cloud computing to cope with the current economic troubles.

Stephane Dubois, Chairman, CEO and Founder of Xignite, isn't naive about the crisis. He understands that in current conditions, everyone's first reaction is to hunker down and try to ride out any credit and financing problems, not to mention shrinking sales.

But he claims that cloud computing services can help companies fight back, and points to a couple of real-world examples. First, he uses the example of a precious metals broker that used to rely on middlemen and other brokers to get the market information it needed. The comapnny looked small and out of the mainstream compared to larger outfits that offered their customers real-time access to commodity prices.

Buying that capability as a service helped them triple their business, Dubous says, becoming a big player instead a just a local player.

Second, he describes a midsize menswear retailer that used cloud-computing services to add local-currency shopping capabilities to its Web site. The idea, he says, is to let Swedes buy in Krona while Venezeualans buy in Bolivars. This kind of localized approach lets companies appear much larger than they really are, Dubois says.

The key to making it happen for is to leverage other people's technology without a big capital investment. A large company might spend a lot of money to build a feed and create an infrastructure to support multiple countries, Dubois said, but smaller companies can just buy that functionality as a service, with no work beyond adding a "a little hook to their Web site."

The bottom of the market is a good time to invest in growing your business," Dubois says, and cites Warren Buffet's investments in General Electric and Goldman Sachs as a sign we might be there.

That seems a trifle optimistic to me given the markets' continued roller coaster rides, but just trying to cut costs doesn't seem like much of a strategy for success either.

The key, as Dubois rightly points out, is to make sure that expenses match revenue. Cash flow issues have killed many a business, and buying your software as a service lets you scale costs up -- or down -- as business dictates. In the cloud, expenses rise only when the business grows, and if business declines you can cut subscriptions or shut it off if need be. You're not left with a lot of legacy, sunk, investments.

That kind of flexibility makes a lot of sense when the only certainty is uncertainty.

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