SMEs though small, have the potentiality to quickly respond to changes in the market and are therefore considered the most valuable forces within an economy. However at the same time, they are also confronted with challenges. Financial constraints often make these organizations susceptible to new trends.

SMEs of India are one of the most aggressive adopters of ERP Packages for the purpose of streamlining their internal business processes. But these packages are very expensive, require a lot of time, effort, money and have high risks involved.

Cloud computing seems to have come to the rescue of SME’s, a solution to their key problem of affordability. Unlike traditional ERP systems, cloud-based software uses the internet to access hardware, software, and other resources that are provided on-demand to perform work. Using cloud computing services, SMEs can access cutting-edge applications, platforms and infrastructure, cost effectively, to improve their global competitiveness.

Cloud computing, enables SMEs to enjoy the same benefits as by the large enterprises and allows on-demand access to reliable and configurable resources that can be quickly provisioned with minimal customer involvement in terms of management. One only has to pay for the resource one uses, and also one need not have to set up the infrastructure or buy the software. The other big advantage with cloud computing is that one can stop using these services, as and when required, quitting the services. Moreover cloud based services provides more flexibility in terms of rearrangement of the services as new needs evolve there by contributing to save money for the SMEs.

Systems change constantly. To create the best experience for users, SMEs must scale or update systems to meet user demand. However it seems to be a difficult proposition for the SMEs to match up with the change. They need to remain competitive and at the same time need to operate in a limited budget with a less complicated and simplified offering. Cloud computing is suitable for companies of all sizes, mainly the SMEs. It provides ways of rapidly scaling to meet user demand. It reduces costs to a bare minimum and also there is no need for heavy infrastructure investments, which results in maximum productivity.