Does the cloud offer an operational advantage to small businesses?

The cloud is everywhere, changing the way we live. Increasingly the television and movies we watch are delivered from cloud based applications like Netflix, BBC iPlayer and Sky’s Now TV service. Many of us listen to music streamed from the cloud on our mobile.

Web based services like Google Docs and Microsoft Office 365 deliver office applications that once resided on PCs, along with automatic backup and storage of documents. They also offer very useful sharing capabilities for collaborative working. For very small businesses the low cost and simplicity on offer are highly attractive.

However, bigger SMEs need more flexible cloud solutions with access to rack space. This is the key advantage of cloud services. Instead of committing scarce capital expenditure to hardware and applications you cannot be sure you will need, cloud gives you the option to “rent” hardware and applications as and when you need them.

Amazon Web Services is a good example of a comprehensive cloud solution that pioneered “variable expense” pricing models, including pay as you go with no contractual commitment.

Buy as much or as little as you want, when you want. No long term contracts, no capital tied down. The result: much needed flexibility.

The cloud is almost universal among start ups who share office or hot desk at one of the increasing number of co-working spaces such as They don’t worry about committing to real estate, and are happy to run their entire IT operation in the cloud. Their only resources are the end point devices, mobiles, tablets and laptops, and the employees that use them.

This agility improves time-to-market, with more thinking about marketing and building the business. Used well, it gives SMEs access to the kind of resources that much bigger players have in house. Something simply not possible twenty years ago.

The concept of letting someone else worry about your IT infrastructure while you build your business is very compelling, but be careful.

Except at the micro-business level, cloud is not a one-size solution. Fitness for purpose and security are prime concerns for anyone thinking of shifting IT, applications and data to the cloud. Choosing a provider like AWS, with its huge economies of scale may give you cheap rates but not necessarily a service tailored to your particular business. A smaller, more focused provider may be what you need. Do your research.

Simply shifting data or processes to the cloud without due diligence is asking for trouble. Just how secure is your cloud provider? You need to know.

According to a recent survey by the Department for Business Innovation & Skills, 2014 saw a 7% increase in businesses using cloud storage and hosting of business critical applications, but there was also an increase in breaches relating to cloud computing services.

Although the headlines tend to focus on the breaches at giant corporations like Sony or JP Morgan Chase, cyber criminals actively target small businesses as well. Quite often these vulnerabilities will be found at the cloud provider by determined cyber criminals.

However, even when data is stolen, damage can be limited if the data has been encrypted. Some cloud providers offer this, but many do not and you need to be sure of the quality of encryption offered. An option is to separate the storage and encryption functions.

It is now possible to engage a Managed Encryption Service from providers expert in advanced encryption techniques. This service effectively sits on top of your data in the cloud as an extra layer, giving you best in class data protection and peace of mind.

So choosing a cloud provider should always include due diligence on the provider, its record and the type of security built in – if any. If they can’t provide the assurance you want, walk away.

If your business processes any form of personal or financial data, you need to be absolutely sure of the integrity of that data in the cloud. In the eyes of the law, the responsibility for data lies with the data controller – and that is you, no matter how small your business. Your customers and partners expect you to protect their data wherever you put it.

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