Using the cloud to host hardware or software can be particularly attractive to small businesses looking for flexibility. But it’s important to understand what you’re signing up to, says Jo Faragher
You might not even realise it, but your business has probably been a consumer of cloud computing services for some time. Whenever you use a webmail application such as Gmail, or share pictures via Microsoft’s OneDrive, you’re tapping into tools and server power that are hosted remotely.
“In some way we’re all touching the cloud,” says Alex Rabbetts, Chief Executive of Migration Solutions, a cloud computing consultancy. He says there are huge benefits for small businesses in moving more of their technology infrastructure and applications to a cloud platform, the key one being cost. “There’s no capital outlay, and you only pay for what you use,” he says.
Organisations can choose to just pay for server power (also known as infrastructure as a service), allowing them to swerve a big upfront investment in IT hardware; or to ‘rent’ software applications such as payroll or accounting and/or server power that they might not otherwise be able to afford to install in-house. Most cloud software providers also manage the application for clients, looking after updates and security patches as part of a monthly subscription cost.
The Counselling Foundation, a charity, decided to use a cloud-based accounting and payroll system called QuickBooks because it was cheaper than buying and building software in-house. “The price was much less than for the previous system,” says Vicky MacDonald, Finance Manager. The system can be accessed anywhere, so it’s also flexible for staff who want to work from home or remotely.
TechUK, which champions technology businesses and growth in the UK, produced a guide for business leaders on how to make the most of cloud computing services. Sue Daley, Head of Programme for Big Data, Cloud and Mobile at the organisation, says: “There are huge opportunities for all businesses in cloud computing but particularly small firms, because it gives them access to complex computing power and resources, and they can access on-demand services in real time.” However, businesses need to know why they’re looking to use the cloud, and how it will support what they do, she says. “It’s not just a technology; it’s a tool that can support business issues. Start with what your requirement is, and how the cloud can help.”
Many small businesses are cautious about using the cloud, too. Research from FSB found that, despite 60 per cent of small firms using cloud computing services, 38 per cent were sceptical about the benefits and worried there might be risks attached. Their top five concerns were data theft or loss (61 per cent), reliable access to online services (55 per cent), concerns over who could access their data (53 per cent), liability issues (41 per cent) and over-dependence on the service (33 per cent). Many also complained about confusing jargon in terms and conditions, and that pricing structures were difficult to understand.
With these concerns in mind, you should think about the type of data you’ll be storing and moving around via the cloud, says Marlon Johnson, Managing Director of JMS Secure Data. “Choosing your cloud provider may depend on whether you need to comply with data protection law, so you need to understand the type of data involved and find a suitable platform,” he says.
Under the Data Protection Act, personal data cannot be transferred outside the European Economic Area, so if you handle sensitive personal information or documents, ask your provider where their servers will host the data. “Consider whether, if there’s a breach, it would compromise clients,” says Mr Johnson.
In terms of cloud security breaches, the likelihood of this happening to your business is small, and no greater than any other computer security breach. “More of a concern is the business security or stability of your provider,” says Mr Rabbetts. “If something such as [giant cloud hosting service] Amazon Web Services went down, entire countries would be affected, and you’d be at the bottom of its priorities.”
For this reason, he says, it’s important to “understand where you are in the pecking order” – if customer service is important to you, then question the provider on this. Smaller providers, he adds, may suit smaller businesses better as they understand their concerns.
Another area to ask about is what happens if you want to move the data to another provider. Be wary of ‘lock in’ clauses that make it difficult to move.
Once you’ve assuaged any worries about security, though, using the cloud has many advantages over just using your own hardware and sharing work over email, as Rob Hilborn of comparison site Broadband Genie found out. “We switched from using hard drives and Microsoft Office applications to Google Drive a few years ago, and we’ve never looked back,” he says.
“It has helped with productivity, organisation and cost, as well as protecting our files.” All staff are required to use two-step authentication to access Google Drive, which adds security.
In fact, Ms Daley from TechUK says more should be done to promote the security benefits of working in the cloud. Documents and data can be backed up by a third party, and they’re not at risk of being corrupted or lost if they’re held on a hard drive that breaks or is stolen. Some cloud providers also offer updates to security patches.
Moving to the cloud can also allow your business to scale up its computing power as it grows, adding users and capability gradually rather than upfront. But it’s a business decision that should not be taken lightly, says Stefano Maruzzi, Vice President for Europe, the Middle East and Africa at web-hosting service GoDaddy. “Take the time to learn the new tools yourself before guiding everyone through them. Once everything is aligned, you’ll see productivity rise.”
FSB members can now get advice and guidance on cloud technology from FSB Communications. For more information, visit fsb.org.uk/benefits
Types of cloud services
For exclusive use by an organisation, although it can still be managed by a third party and can be sited on or off the premises
For open use by the general public, and may be owned, managed and operated by another organisation – such as Government or a university
A mixture of private and public cloud that allows portability of data or applications between the two
Infrastructure as a service
This is the equivalent of renting hardware such as servers or storage that can be accessed instantly and with no upfront cost. You can add more or less depending on your needs, so it can be a flexible option
Platform as a service
This type of service offers businesses a platform so they can develop, run and manage applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app
Software as a service
This enables organisations to use software but – rather than paying for it upfront on a per-licence basis – they pay only for what they use. It also means the business does not have to install and maintain the application, as in effect it is ‘renting’ it from the provider, often working to a service-level agreement
Jo Faragher is a freelance business journalist