1. Business Ideas
  2. Business Plans
  3. Startup Basics
  4. Startup Funding
  5. Franchising
  6. Success Stories
  7. Entrepreneurs
  1. Sales & Marketing
  2. Finances
  3. Your Team
  4. Technology
  5. Social Media
  6. Security
  1. Get the Job
  2. Get Ahead
  3. Office Life
  4. Work-Life Balance
  5. Home Office
  1. Leadership
  2. Women in Business
  3. Managing
  4. Strategy
  5. Personal Growth
  1. HR Solutions
  2. Financial Solutions
  3. Marketing Solutions
  4. Security Solutions
  5. Retail Solutions
  6. SMB Solutions
Grow Your Business Technology

Cloud Computing: A Small Business Guide

Cloud Computing: A Small Business Guide Credit: Emotional intelligence image via Shutterstock

In today's ever-changing business climate, it's critical that small business owners get what they need right when they need it. Whether they're on their computers, tablets or mobile phones, it's more important than ever for businesspeople to have information right at their fingertips, wherever they are. This is exactly the convenience that cloud computing provides.

For small and midsize businesses (SMBs), the benefits of cloud computing are endless. Cloud computing saves businesses time and money by boosting productivity, improving collaboration and promoting innovation. Cloud hosting facilitates all types of information-sharing, such as email services, application hosting, Web-based phone systems, data storage and more.

Cloud computing is used by everyone from individuals to private and public organizations, including educational systems and governments. In business, cloud systems are used by organizations of all shapes and sizes, from small businesses to multinational corporations.

Businesses use cloud computing to access information anywhere using any compatible device. Unlike storing information on your computer or a server in your office, cloud computing stores data on the Internet. It works by making information available from a central Web-based hub that gives anyone with proper credentials access from any location with an Internet connection. Cloud computing also syncs data for all devices connected to the cloud, keeping them updated with real-time information.

In the cloud environment, users can access all types of files, use applications as though they were in the office, and even collaborate remotely while working on the same project or presentation on their device as someone on the other side of the globe. Even if you're away from work or your office server is inaccessible, data in the cloud is always up-to-date and always available wherever, whenever.

Cloud-computing services can range from data storage to functional programs, including accounting, customer-service tools and remote desktop hosting.

According to a study by Neovise, an IT research firm that focuses on cloud technology, 54 percent of organizations use cloud computing. Of these organizations, 74 percent use some combination of different types of clouds, with 40­-50 percent of them using multiple services of the same type of cloud.

Business owners use three types of cloud services to store their data and provide them with services: public, private and hybrid.

Public Cloud: A public cloud service is built on an external platform run by a cloud-service provider. With this off-site cloud service, users get their own cloud within a shared infrastructure. The provider offers everything from system resources to the security and maintenance of your cloud system. Since it is managed by an outside company specializing in cloud services for a large range of customers, a public cloud system is great for organizations that want more elasticity, cost-effectiveness and the latest technology.

Private Cloud: A private cloud service is a cloud platform built within your own walls on your own hardware and software. Since a private cloud is managed by your own internal IT team, it is ideal for businesses that want exclusive access, more flexibility and greater control over their cloud. To use a private cloud service, however, organizations build their own data centers, making it a costlier cloud option.

Hybrid Cloud: A hybrid cloud service employs both private and public clouds. In a hybrid cloud system, an organization’s own IT team manages part of the cloud in-house and the rest off-site. For instance, a hybrid cloud system is perfect for an organization that wants to manage business-related data (such as customer files) in-house but wants to store less-sensitive information with a third party. Hybrid cloud systems are used by all types of organizations but are 46 percent more likely to be used by larger organizations with more than 1,000 employees, according to the Neovise research.

After extensive research, our sister site, TopTenREVIEWS, named the following as the three best cloud-computing services:

Heroku

Heroku is an impressive cloud-hosting platform that is both robust and easy to use. Its suite of powerful features includes compatibility with every major Web language, fast application deployment, monitoring and analytics, an intuitive user interface, easy scale management and simple third-party add-on integration from outside vendors. Heroku also provides a collection of tutorials and documentations for uncomplicated utilization.

Amazon Elastic Beanstalk

Carrying the trusted e-commerce behemoth’s name, Amazon Elastic Beanstalk is an excellent cloud platform that offers a comprehensive set of cloud-computing tools. Its services include Amazon EC2 (Elastic Compute Cloud), a Linux or Windows server for your cloud; Amazon S3 (Simple Storage Service), where you can store files like documents, photos, videos and more; Amazon RDS (Relational Database Service) for databases; and Amazon ELB (Elastic Load Balancing), which essentially manages traffic in and out of your cloud. You can select which of these simple-to-use tools you’d like to use, or choose all of them for maximum capability and cloud management.

Windows Azure

Coming in at No. 3 is Windows Azure, which is perfect for anyone who wants to source out all the administrative tasks associated with cloud computing. Windows Azure offers a platform-as-a-service that handles everything from setting up and configuring to updating and maintaining your cloud server. It is also one of the few services that support .NET applications. Included in the Windows Azure package are in-depth documentation and tutorials, as well as email and phone support, making it one of the most user-friendly cloud services out there.

Cbeyond, a cloud services and communications provider for SMBs, also suggests finding cloud-computing services that offer both cloud and network connectivity to simplify logistics, save money and avoid the headaches of dealing with multiple vendors.

The drawbacks of cloud computing are twofold. First, implementing any new type of technology will require training personnel and establishing an effective troubleshooting system during and after the cloud has launched. You will also have to address any hesitation among your employees, especially for those who are unfamiliar with cloud technology.

Another concern about cloud computing is its security risks. Business owners and decision makers primarily worry about sensitive data in the cloud and their vulnerability to unauthorized users. While an organization's cloud is typically accessed using designated usernames and passwords, verifying user identity itself remains a top concern. A study by the Ponemon Institute, an independent privacy and data-protection research center, found that a mere 29 percent of organizations have confidence in a cloud's ability to authenticate identities and secure who has access to sensitive information.

In weighing the risks of cloud computing versus its benefits, executives are especially concerned about how their information is kept safe in the cloud.

Cloud safety is all about finding the right vendors and implementing technology that focuses on both identity verification and data encryption.

“Businesses need to understand that data safety doesn’t just happen on its own,” said Helen Ching, founder of Cloud Launch One, a cloud consulting and services firm. This means that businesses need to be strategic in adopting security systems, such as by authenticating devices connected to the cloud and the identity of the person using it.

One way to protect sensitive information is to encrypt data as it enters, leaves and rests in the cloud, Ching suggested. This can be done by leveraging DLPs, or Data Loss Prevention tools, which monitor data leakage and ensure the secure transportation of data to and from the cloud.

Businesses must also do their due diligence and research cloud service providers before signing up with them. Phil Agcaoili, chief information security officer at Cox Communications Inc., recommends taking the following steps to vet your provider:

1. Consider utilizing the Consensus Assessment Initiative Questionnaire (CAIQ) provided for free by the Cloud Security Alliance (CSA). The CAIQ offers boilerplate questions established by hundreds of security professionals around the world.

2. Demand that your cloud service provider has and maintains appropriate levels of security assurance and verify that they have posted this information on the Security, Trust, and Assurance Registry (STAR).

3. Ensure that you have appropriate security language in your contracts with the cloud service provider, and establish meaningful service-level agreements to guarantee service delivery.

4. Validate that your cloud service provider is spot-checking its performance. The CSA has Cloud Audit that can provide an automated approach to doing this, while some companies perform a right to audit. Determine how thorough you need to be in order to obtain a level of assurance.

5. Consider your back-out plan if the cloud service provider relationship does not work out.

6. In the end, ensure that you have a thorough understanding of what information you can't afford to lose. As the old security saying goes, don't digitize anything you don't want to lose. Likewise, don't store it out in the cloud.

Sara Angeles
Sara Angeles

Sara is a tech writer with a background in business and marketing. After graduating from UC Irvine, she worked as a copywriter and blogger for nonprofit organizations, tech labs and lifestyle companies. She started freelancing in 2009 and joined Business News Daily in 2013. Follow Sara Angeles on Twitter @sara_angeles.