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
Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.
Grow Your Business Technology

Cloud Computing: A Small Business Guide

Cloud Computing: A Small Business Guide
Credit: Rawpixel.com / Shutterstock

Cloud computing can be confusing. If you're considering a cloud service for your business, here are three questions to ask:

  1. What type of cloud computing does your business need?
  2. How much are you willing to pay?
  3. Can you deal with the security risks?

To help you answer these questions and better understand the cloud, here is our cloud computing guide for small businesses.

Cloud computing gives users access to data wherever they have an internet connection. 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 – or in the office, out in the field or on the road. This is exactly the convenience that cloud computing provides.

Cloud computing is an umbrella term for different types of cloud services, including these:

  • Cloud storage – stores and backs up your files for regular access and for sharing and syncing them across devices.
  • Cloud backup – similar to cloud storage, but primarily used as a backup source in the event of a crash, cyberattack or other data loss.
  • Software as a service (SaaS) – uses the web to provide a service, such as Office 365, Google Apps, QuickBooks Online and Salesforce (may also be called Platform as a Service).
  • Cloud hosting – facilitates all types of information sharing, such as email services, application hosting, web-based phone systems and data storage.

For a list of SMB-friendly cloud storage solutions, see our countdown of 22 Cloud Storage Solutions for Small Business.

Editor's Note: Looking for information on cloud backup for your business? Use the questionnaire below, and our vendor partners will contact you to provide you with the information and quotes you need:

buyerzone widget

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.

Businesses use cloud computing to access information anywhere with any compatible device. Rather than 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 available wherever, whenever.

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

Business owners use three types of cloud services to store their data and provide 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 wide 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 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.

The cost of cloud computing varies greatly, depending largely on the type of cloud service you need.

For instance, cloud storage and file-sharing services like Dropbox start with free accounts, but paid plans with advanced features cost $20 and up per month per user. Cloud backup and recovery services like Carbonite cost $59.99 per month.

Amazon Web Services, on the other hand, offers a wide range of cloud services, letting you use its data centers for free or on a pay-as-you-go basis.

Cloud-based software pricing also depends on the provider and industry. Other factors that affect SaaS pricing include the number of users, how you will be launching and distributing the software across the company, tech support, and contract terms.

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

Another concern about cloud computing is its security risks. Cyberattacks are at an all-time high, and no business is safe. 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 with designated usernames and passwords, verifying user identity itself remains a top concern.

In weighing the risks of cloud computing versus its benefits, business owners are especially concerned about how their information is kept safe in the cloud. The key is finding the right cloud service provider and understanding its contingency plans in the event of a security breach – as well as having your own.

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

Here are 10 security questions to ask cloud computing vendors before signing up for their services:

  1. Who can see my information?
  2. Is my data located at multiple data centers in different locations so it is protected from regional attacks?
  3. What redundancies do you have in place to protect my data?
  4. What specific measures do you take to encrypt my data?
  5. How do you manage encryption keys?
  6. What happens and how will you restore my data if there is a crash or cyberattack?
  7. What security certifications do you have?
  8. Are you compliant with the most current security protocols?
  9. What can go wrong during implementation?
  10. Are you a reseller? If so, who is responsible for service and support?

Editor's Note: Looking for information on cloud backup for your business? Use the questionnaire below, and our vendor partners will contact you to provide you with the information and quotes you need:

buyerzone widget
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.