Cloud Computing for your business

Cloud computing is a relatively new concept, but is expanding at an astonishing rate.

If you’ve heard the term cloud computing but don’t really know how it can benefit your business, you aren’t alone. A 2011 US survey conducted by Newtek Business Services found two-thirds of small businesses didn’t know how cloud computing worked. You might be surprised to find that you already use some behind-the-scenes cloud platforms when sending emails or buying things online.

Understanding cloud computing is easier and more straightforward than you may think. This article covers some important points to consider before you decide if cloud computing is right for your business.

On this page:

• What is cloud computing?
• Advantages of cloud computing for business
• The risks of cloud computing
• Using the cloud in your business

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What is cloud computing?

The term ‘cloud computing’ covers a range of online applications that you can access through your web browser such as Internet Explorer, Google Chrome or Firefox.

The easiest way to understand cloud computing is by thinking of it as an online version of the programs that are installed on your computer. Rather than being a piece of software that is downloaded or installed onto your machine from a disc, the programs are on the web and load just like a web page.

Most of the programs you use on your PC now have a cloud equivalent and new applications are being developed regularly. The main difference is that everyone uses the program together on the Internet rather than through individual copies of programs installed on each computer. The metaphor of a cloud represents the integration and networking of numerous computers and services in a virtual online network.

Part of the reason cloud computing can be difficult to understand is that there are a couple of different variations. The two of most interest to small businesses are:

• Software as a Service (SaaS). This covers an array of options such as Google Documents, Gmail, Microsoft Office 2010 and many other products across a wide variety of functions from accounting to database management and customer relations. There are SaaS versions of almost any software you use on a PC.
• Infrastructure as a Service (IaaS). This includes sites like Amazon and EBay that offer online credit card access and sales outlets. IaaS is basically the nuts and bolts of a website, and manages information such as delivery addresses and credit card numbers entered by customers. Usually, this data is located on an internal server or downloaded to an application on the hard drive.

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Advantages of cloud computing for business

Cloud computing has a number of potential benefits for SMEs including:

• Cost saving. Some SaaS cloud-based applications are free of charge or you only pay for the services you need on a monthly basis. This means you don’t need to purchase any software or annual program licences outright. If you need a specific program, you can access it on the cloud for a set price without having to buy a whole program suite of software you might not use. Because data isn’t stored on the hard drive, it doesn’t require high-specification computers. Upgrading less saves you money on your IT bill and lets you retain older computers longer.
• Ease of access. The information stored in the cloud can be accessed from anywhere with an Internet connection – regardless of where you are. This is useful if you or your employees frequently travel or work from home. Cloud computing also allows you to collaborate with a co-worker in another location. Some cloud platforms such as Google Documents enable multiple people to interact with each other and enter data in real-time. This means you can see what your co-worker is typing in a document or spread sheet. For a business owner, cloud computing is a good way of seeing what employees have been working on. With everything in one location, it is easy to check on the status of a project.
• Upgrade availability. As cloud technology advances, you have access to the latest security, server and software upgrades – mostly automatically and free of charge. This saves you time trying to locate and download updates and ensures that you always have up-to-date security and technology.
• Data security. Because data isn’t stored on your hard drives or servers, your information is secure if your hardware fails, is lost or stolen. Cloud networks can be used as a cost-effective way to back up data. Sensitive data stored on the cloud is easy to retrieve if your network security is compromised or a hard drive fails.

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The risks of cloud computing

Before you take the plunge and take your business data online, there are some important things to keep in mind:

• Performance. To get the most out of cloud computing you need to have a good Internet connection. When you’re working on the cloud, data is being exchanged constantly over the Internet and can slow to a crawl if your connection speed drops. Likewise, having multiple computers accessing the cloud at once can cause your network speed to decrease, making it harder to complete other tasks. If your connection drops because of a service failure or network outage, the cloud is inaccessible until service resumes.
• Security risks. All cloud providers have security measures in place to keep your data secure but no systems are totally immune to the risk of a security breach or infection. New services and features are being developed constantly, which opens the door to the possibility of security breaches occurring as attackers attempt to find holes in new software. Keeping anti-virus software up-to-date and using strong passwords are the best protection against security threats. Developing password and Internet security policies for your business is a good way to make sure employees are aware of security risks online.
• Loss of control over data. With your data and software stored remotely somewhere in the cloud at a location that is often kept secret, businesses can feel like they’re losing control of their data. Some concerns have been raised about liability in the event your data is lost by the cloud provider or if your data is passed on to another company or sold. Choosing a reputable cloud provider will minimise any potential issues.
• Relying on a third-party can have other risks. There could be additional costs, such as network administration fees, that you were not aware of when setting up the cloud network. When using Saas, it is also possible that your provider could be sold to another company or go out of business, leaving you stranded.
• Your data still needs to be backed up. You data is still susceptible to hardware failure as it will be located on a server, most likely overseas. This means that data stored on the cloud will need to be backed up to another cloud provider or your hard drive. This could negate the purpose of shifting data to the cloud to save hard drive space, for example.

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Using the cloud in your business

For businesses that require collaboration between employees, cloud computing can save time spent in meetings, emailing work and providing feedback. Google Documents is part of a whole suite of cloud-based applications offered by Google and gives users a shared space on the web to discuss work together using text, graphs, videos, maps and more. Many businesses are already using it for project work and collaborative working.

Most software used on a typical work computer is available in a cloud platform, including word processors, spread sheet and presentation software and even accounting packages. There are even cloud programs for creating forms, photo editing and drawing diagrams and maps. Some software can also be accessed from mobile devices, enabling sharing between PC and mobile.

Managing and sharing documents can also be easier with cloud computing. Software such as Microsoft Office 2010 comes bundled with cloud-based versions of their popular applications such as Word, Excel, PowerPoint and Outlook. These can all be integrated with the cloud-based content management system SharePoint.

SharePoint and similar programs are able to organise and store your documents, which is valuable for keeping track of most business data, from client lists to project charters.

Some cloud platforms enable any file to be stored up to sizes larger than one gigabyte, regardless of file type. This is useful for back-up files or any data that you want to store away from hard drives.

Information supplied by business.govt.nz