“The cloud” is a popular catch phrase that refers to on-demand computing resources delivered over the Internet. An estimated 37% of small businesses are already operating in the cloud, and nearly 80% could be doing the same by 2020.1 In fact, small-business owners spend an average of four hours a day online running their companies.2
There are three different types of cloud-based services. Software as a Service (SaaS) is when a business rents or borrows online software, typically by subscription. Platform as a Service (PaaS) enables companies to build and deliver custom applications for their own purposes. Infrastructure as a Service (IaaS) involves the utilization of servers, networking, storage, data centers, and other computing capabilities on a pay-per-use basis.
Instead of buying, installing, and maintaining hardware, software, and servers, companies may be able to utilize cloud-based tools more simply and at a lower cost. Of course, this requires a speedy and reliable Internet connection, which is less likely to be a problem today than in the past.
Why the Rush
Cloud services allow businesses to scale IT infrastructure up or down quickly to help meet business demands and facilitate growth.
Cloud applications can make it easier, faster, and less expensive for small businesses to keep their technological capabilities up-to-date and take advantage of cutting-edge features.
Owners and employees can access company data with laptops or mobile devices from any location with an Internet connection.
For disaster planning and business continuation purposes, companies are able to back up some or all of their data operations in the cloud instead of paying for off-site hardware and storage.
When you store data in the cloud, you’re counting on a third party to keep it safe. Unfortunately, universal standards for data security have not been established.
Cloud services may offer more security than you could provide on your own, especially if your technology budget is limited. On the other hand, companies with highly sensitive data — or that must meet stringent compliance regulations — may be better off investing in a private network.
Handling some computing functions in the cloud could save you time and money. Still, it’s important to weigh the potential benefits and risks, and to consider contractual obligations carefully before committing to any major technology investment.
1) The Wall Street Journal, June 3, 2015
2) Intuit, 2015
The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright 2015 Emerald Connect, LLC.