Skip to main content

Cloud based computing doesn't have to be confusing.As a small business owner, is your head swimming from hearing the term ‘cloud based’ so much?  Don’t worry, here is your intro course.

A cloud vs. THE cloud

A cloud, as many of us remember from our elementary school units on the water cycle, is made up of condensed water floating in the sky.  A NASA definition states, “A cloud is a mass of water drops or ice crystals suspended in the atmosphere.”  Now, though, we hear the word cloud thrown about in a different way.

When doing a quick Google search for ‘cloud,’ I wasn’t all surprised to find that most of the pages that popped up did not deal with those white things in the sky.  Instead, most of the pages were about THE cloud, not A cloud.  And, that is a little bit trickier to explain and comprehend.

What is THE cloud?

“The cloud is just a metaphor for the Internet.” –PC Mag

“The cloud is a network of servers…” –Mashable

“The cloud is not a physical entity…” –Microsoft Azure

Essentially, the cloud is a way to describe data and software that is stored on and accessed via the internet instead of your personal computer’s hard drive.

Cloud based computing 101 for small businessesFor example, if you write a document using a word processor like Microsoft Word, all of that data is stored on your computer’s hard drive.  If you write a document in Google Docs, or write a message on Facebook, however, that information is not stored on your computer’s hard drive–it is stored on various servers…in the cloud.

Real life clouds float above us.  They aren’t permanently attached to any single home, but we can all look out the window and see them when we want to.  THE cloud is similar.  Cloud based computing means that data and programs are no longer stored solely on your computer.  They are “floating” above you, but can be accessed when necessary.

Why use the cloud?

It’s important to realize that cloud based computing does not have to be an all or nothing thing.  You can choose to use to still store some information or utilize programs that are part of your computer’s hard drive.  In fact, many of use the cloud without realizing it.  If you’ve ever posted pictures on Instagram–those pictures are stored on the cloud.

Cloud-based computing can be used for both personal and commercial purposes.  Most businesses choose to enter in to the world of the cloud for two main reasons:  money and convenience.

1. Using the cloud to save money

Cloud based computing can save businesses money.  How?  First, let’s look at storage.  Businesses have a lot of data to keep track of.  Financial data, customer data, employee data, supplier data etc….  The more storage a computer offers, the more expensive it is.  By saving data on the cloud, using programs such as DropBox, you can reduce the need for processors with large storage capabilities, which will reduce that cost.

Secondly, buying computer software is expensive.  It’s especially expensive when only a few years later it is outdated and you need to purchase the latest model.  Cloud based software eliminates that issue.  Because it is connected via the internet and you subscribe to the software rather than have it installed one time, updates happen automatically and usually included within the contract of the subscription.

2. Using the cloud for convenience

Picture this: you walk into your child’s room one morning and discover that he is burning up with a fever.  There’s no way that he can go to school, which means there is no way that you can make it to work.  But, you have a LOT to do.  When businesses use cloud based storage and cloud based software, that information can be accessed from any computer as long as it has internet.  Now not being able to make it into the office doesn’t have to be a total lost day of work.

Cloud based computing can offer conveniences to businessesOr, do you have employees that visit job sites or clients all over?  When the cloud is utilized, those employees can access and input important information from a laptop, tablet, or cell phone instead of needing to waste time to drive back to the office.

Common hesitations…

Believe me, I know that it can be scary to think of suddenly putting your trust in this intangible thing.  Security is one of the biggest hesitations when it comes to cloud based computing.  But Cloud expert, David Linthicum, states, “…I’ve been finding that clouds are more secure than traditional systems, generally speaking.”  He goes on to explain about how where things are stored (cloud or computer hard drive), doesn’t really matter as much as how easy it is to access.

In an article for the New York Times, Quentin Hardy explains, “The same way that your money is probably safer mixed up with other people’s money in a bank vault than it is sitting alone in your dresser drawer, your data may actually be safer in the cloud: It’s got more protection from bad guys.”

Security is something to be concerned about no matter where your data is stored, but the cloud doesn’t necessarily put a business at any more of a risk than using traditional storage.  Click here for tips about cloud storage security. 

Is the cloud right for my business?

As we said earlier, moving to the cloud, doesn’t have to be an all or nothing thing.  You could start with one thing, such as cloud based accounting, and see how that works.

Would you like to learn more about cloud based accounting or other ways to improve your business?  Contact us at Lucid Advisory and Finance!