Understanding Cloud-Based Services - FAQ

When your business uses cloud-based services, it taps into just the services it needs, when it needs them, without having to make large investments.

43% of small businesses are currently using cloud-based services, up from just 5% in 2010, according to the National Small Business Association.*

Scott Fairchild, Senior Director of Product Management at Spectrum Business, offers insight into how your company can evaluate what “the cloud” has to offer.

We’ve been hearing about the cloud for a while, but there is still some confusion around its meaning. What exactly is the cloud?

 SF: “The cloud” refers to resources that were once local that are now available remotely in a central location, usually accessed through the Internet. Instead of buying software and installing it on your computers, for example, you can access it via the cloud using any device that has an Internet connection. The same goes for servers—instead of having an email server or web server at your business and connecting all your computers to it, you use a server that’s located in the service provider’s data center.

What advantages does the cloud offer to small businesses?

SF: Using cloud-based services frees businesses from having to purchase equipment and software upfront and allows them to pay for only what they use. For example, you can use computing power on Amazon’s servers for a particular project and pay only for the capacity you consume, rather than buying hardware that you may no longer need once the project is over. Or, you can pay a monthly subscription fee to use business software online and cancel if you no longer need it. Another advantage of using cloud-based software is that it’s updated automatically, so you can access new features as soon as they become available.

 How can the cloud help improve productivity?

SF: Cloud-based services give small businesses collaboration capabilities that they may not have had in the past. For example, some cloud-based file sharing tools allow users to send documents to anyone, track who’s opened them and see what changes have been made. Online conferencing tools allow users to host virtual meetings and communicate in new ways with customers or remote employees. Cloud-based apps also help workers in specific industries to be more productive—for example, there are apps that allow restaurants to take reservations online and even apps that allow dog grooming services to take appointments.

What are the benefits of using cloud-based storage compared with storing files onsite?

SF: Files stored in the cloud are available from virtually any device that’s connected to the Internet. In the past, you would have to bring the files with you on a device or memory stick, or you’d have to email them to yourself. Another benefit is that data stored in the cloud is generally backed up and replicated to other, remote servers, so that if something happens to one server, you won’t lose your files. This isn’t the case if you have files stored on a device that goes missing or that’s damaged by a fire, flood or other disaster.

 How safe is data stored in the cloud?

SF: Cloud providers offer different levels of encryption and protection. Before choosing a service, you need to ask about the security measures they have in place. Work with your IT consultant or technical staff to help you choose a service that meets your needs, particularly if you’re in an industry like health care or finance that has very stringent rules about how data can be stored and with whom it can be stored. Retailers will want to be sure they use the cloud in a way that complies with payment card industry standards.

Can businesses that use cloud services expect to save money long term?

SF: Generally speaking, yes. Paying for resources on an as-you-go basis rather than upfront can mean significant savings. Yet there are cases when it may be more economical to buy an application outright. For example, agraphic design firm might not need a monthly subscription for an entire suite of cloud-based design programs if it can buy and install the one specific program it needs.

Think about the applications and services you need and analyze what it would cost to use them through the cloud versus hosting them in-house. When it comes to software, you should also find out if there are features you would lose by using the cloud-based versions, because in some cases they differ from boxed software.

What factors should businesses consider when choosing a cloud services provider?

SF: Along with security, they should consider stability.There are many new cloud applications and providers popping up, and businesses will want to be sure that they won’t disappear. If I use a reservations-booking application from a new provider and have reservations booked for the next two months, I could lose my reservations if the provider goes out of business. This type of scenario is becoming less common over time, but it’s still something businesses need to think about.

It’s important to get advice when choosing a provider, ideally from an outside, neutral advisor. Those who can’t afford to do that should leverage their current providers—for example, sales engineers and other technical staff with their Internet service provider—to gather information.

The cloud represents a potential time and resource savings for your small business. By understanding what the cloud has to offer, and mapping your needs to it, you can determine how to tap into this opportunity at the right time and with the right provider.

* National Small Business Association 2013 Small Business Technology Survey