Apple, Google and eBay were all started in a garage, romanticizing the notion that one can create a business with virtually no start-up costs and become phenomenally successful. Indeed, that’s become a big part of the American dream. Over the years, The Small Business Professor has had his fair share of inquiries from friends who were looking to start small businesses with little to no start-up costs, especially in the technology realm. That got me thinking _ wouldn’t it be great to buy only as much compute power as you need?

Question: I just started a small plumbing fixtures company. Does anyone offer a “pay-as-you-go” model where people can rent compute power, so I don’t need to spend thousands up front? I can’t afford huge capital investments right now, and I don’t want be locked in.

Answer: These days, small businesses can indeed “rent” a full-blown computing environment lock, stock and barrel _ processing, storage, networking and other resources, as needed, including applications.

Small businesses can access these resources over the Internet through a pay-per-use model. Typically, compute resources are rented out for specific periods of time, according to a pre-determined hardware setup; the small business pays for the time and configuration, regardless of actual use. A newer, somewhat more flexible, rental model is emerging now as well. Within this scenario, small businesses can adjust the compute environment to meet their changing needs, and they’re billed only for the services they actually use.

This new model avoids the “IT roller coaster” of yore, where new businesses were finding themselves having to buy new (rapidly depreciating) hardware every three years or so. And they were paying a ton of money to technical people to maintain and service their equipment. Needless to say, these costs can mount up very quickly. According to Adam Stern of Infinitely Virtual, “companies are beginning to offer other professional services, such as disaster recovery and related types of support, that make it easy for small businesses to move to this rental environment. These services help business owners avoid the financial burden (and guaranteed obsolescence) that comes with acquiring hardware every few years”.

And because various industries have distinct requirements within this rental model, some service providers are even specializing in specific markets. These targeted offerings not only make it easier to find the right provider, they give small businesses greater choice and that’s a true win-win.

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Bruce Freeman, a small business consultant, is adjunct professor of entrepreneurship at Seton Hall and Kean universities. He also is co-author of “Birthing the Elephant: The Woman’s Go-For-It Guide to Overcoming the Big Challenges of Launching a Business.” Readers may send him questions at


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