Frequently mentioned as the future of business technology, cloud computing’s biggest benefit is that it makes enterprise-quality technology affordable for small businesses. Cloud computing let’s you compete at previously unattainable levels. In fact, it’s now entirely possible to completely run your entire small business in the cloud.

However, in talking with many of my clients, not everyone is on board with this idea. For every person extolling the benefits of cloud computing, there’s an opponent with an equally powerful risk or disadvantage. With so many differing opinions, how can you possibly decide what to do? Let’s take a look at the major pros and cons of cloud computing.

Pros

1. Improved Disaster Recovery

Moving your business data to the cloud can make Disaster Recovery / Business Continuity Planning, i.e., retrieving data in the event of a hardware compromise or disaster on site —easier and less expensive. You can even set up your system to back up data automatically to ensure you’ll be able to recover the most up-to-date information in case of emergency.

According to a study by SpiceWorks, and sponsored by Carbonite, 45 percent of small and medium sized businesses (SMBs) have experienced data loss and, on average, it cost $9,000 to recover the data.  One of my clients had over 5,000 documents stored on one computer, with no backup, when the hard drive on the computer completely failed.  You can minimize this cost by having a good Disaster Recovery (DR) plan in place before disaster strikes.

With an investment of less than $1,000, you can set up a solid DR plan to recover data in a couple hours.  No matter how you do the math, $1,000 in disaster preparation is a lot cheaper than $9,000 to recover after an event, not to mention that potential loss of business.

2. Increased Collaboration between employees

Moving to the cloud increases opportunities in businesses for collaboration between employees. Colleagues can sync and work on documents or shared apps with ease, often simultaneously, receiving updates in real time.

Additionally, cloud computing allows each team member to work from anywhere. The cloud centralizes your data, which means that you, your employees, and even your clients can access your company data from any location with Internet access.

A great example of this is the Google Apps for Work products.  For as little as $5 / employee / month, you can have a full suite of applications, including mail, calendar, word processing, spreadsheet, presentations, file sharing and more.  These apps are automatically updated to the latest version for all your employees.  Contrast that to buying individual software applications for hundreds of dollars per employee that need to upgraded manually every 1-2 years.

3. Green

Cloud computing decreases a business’ carbon footprint by reducing energy consumption and carbon emissions by more than 30 percent. For small companies, the decreased energy usage can reach 90 percent—a huge money saver. It can also help a business project an environmentally sound image.

Cons

1. Dependency on Internet Connectivity

Running all or some of your business applications in the cloud is great, as long as you can maintain a consistent Internet connection. If any one of your cloud-based service providers loses connectivity, or if your ISP experiences an outage, you’re out of business until that Internet connection returns. Even the best servers go down occasionally, so if you decide to use this method, it’s important to implement a backup plan.

2. Ongoing Costs

While cloud computing is relatively inexpensive to start up, depending on your needs, an in-house solution may cost less in the long run. Buying an in-house server and installing a network system is definitely a large, up-front capital investment, and you also need to consider ongoing IT maintenance costs.

With cloud computing, you pay the same amount each month to maintain not only your server, but also all your data. The choice you make may depend on whether you have a lot of startup capital to invest in a private network. Be sure to compare all the costs for supporting both an in-house server and cloud-based server to see which option works best for your situation.

3. Security

It boils down to whom do you trust with your business data? Not every business should place its data in the cloud.

Companies with highly sensitive data—or that must meet stringent compliance regulations—may well need their own IT department to keep data secure. When you store data in the cloud, you’re trusting a third party to keep it safe.

Does your small business have an IT department that’s security savvy enough—with enough resources—to lock down your data? If so, you’re set. If not, the cloud may well offer you more security than you could provide on your own.

In Summary

Should you choose cloud computing or should you set up an in-house network? Both options have their pros and cons. Research your options both in and outside the cloud, and weigh them against the specific needs of your business.  Be sure that you do a complete life-cycle cost analysis to compare all costs and risks.  We can help provide a complete analysis for your business.  Contact us to set up an initial consultation.