You’ve probably heard of the cloud computing by now. As a small business owner, you may also be wondering whether the cloud is the magical IT solution you’ve been looking for, or just a lot of vapor. Here we’ll take a look at the potential and risks the cloud presents for small businesses.

What Is Cloud Computing?

The cloud is what we used to call the Internet, and cloud computing means using software and services over the Internet. This concept isn’t really all that new. After all, Web-based email, calendars and other common services have been around for years. What has changed is that the applications and services available over the Internet have grown to include nearly everything a business needs.

Need data storage? The cloud does that. Need word-processing software that allows for collaboration? The cloud has that. Need something to manage payroll? The cloud does that, too. In fact, there are cloud-based solutions for most business problems; best of all, they are usually cheaper than investing in the infrastructure and software that would be required to do the same job at home base.

The Pros of Small Business Cloud Computing

Like many things on the Internet, cloud computing is still growing and changing. That said, cloud computing solutions have shown some consistency in what they can bring to a small business. These are:

  • Lower Costs: This was already mentioned, but it is understandably the primary thing small business owners worry about when considering new technology – the costs compared to the benefits. Cloud computing services are usually fee-based (or free) and are very easy to set up. Some of the best Web-based applications out there - Google Docs for one - are free. Although these applications may not have all the features of software such as Microsoft Office, cloud applications are adequate for many businesses - and they cost a whole lot less.

  • Flexibility: One of the most beautiful features of cloud computing is that employees can access the business from any device no matter where they are. This means they can save what they're doing at work, jump in a cab and pull that work up on a mobile device. This flexibility is something that can be made available to all employees. This flexibility also provides another benefit in terms of security and productivity: if a business computer or device dies, the employee's data will be preserved on the cloud.

  • Scale: The ability of cloud computing to scale as needed is another attractive feature. When a business is running a virtual machine on the cloud, whether for storage, hosting, processing, or what have you, the business's resources grow and shrink with its usage. This means that a traffic spike won't bring down a small business's website. Instead, the business will merely pay for the temporary increase in server use, making it much cheaper than investing in more servers to handle random spikes.

  • No More Versions: Businesses that rely on computer technology know the pain that is caused when new software is released. If newer software has desirable features, a business has to pay for the new version and deal with integrating it into the existing system, which often causes compatibility issues. This means other software needs to be upgraded as well until before long, the office PCs are moving like a senior’s walk-a-thon. With cloud-based apps, updates are automatic and usually cost nothing beyond what a business may already be paying for access to cloud services.

The Cons of Small Business Cloud Computing

Of course, cloud computing has its downsides as well. Cloud computing on a business scale is new, and there are always challenges that come with adopting new technology. The major question marks and issues in cloud computing are:

  • Security: With cloud computing, all of a business's data is out there on the Internet, rather than stored on a machine in the office. This leads many business owners to worry about their cloud services being hacked. Whether your data is more at risk in the cloud, where it is protected by cloud service operators, or at the office, where it is less likely to catch a hacker’s attention, is a difficult question to answer. A business can make data nearly 100% secure, but this level of security doesn't come cheap. For most businesses, security really comes down to balancing security fears about working in the cloud against the advantages.

  • Reliability: Short of a hot war, it is unlikely that the Internet will shut down. However, this doesn’t mean that cloud services won’t. Working in the cloud comes with the risk of outages, and even the risk that a service provider will go out of business, leaving its clients in the lurch. With traditional software, businesses can hold onto any software they've purchased if the maker goes under. Data may be able to be salvaged if a cloud service disappears, but those who are using the cloud will no longer be able to access its programs.

Should You Have Your Business in the Cloud?

Whether a business should move to the cloud is a question that has to be answered by each small business according to its unique situation. However, the nice thing about the cloud, is that there's no need to jump in with both feet. Business owners can start with some basic cloud applications like Web-based email and back-up storage for data, as well as shop around to try out different services on a trial basis. Simply put, cloud computing is a way for businesses to get what they need for less, so while it may not be a fit for every business, it's well worth a closer look.