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Technology / Cloud technology

Cloud computing solutions: pros and cons

Cloud computing solutions are growing in popularity by the day. Here’s a summary of the advantages and disadvantages that are of most relevance to small business owners.

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Benefits and advantages

  • Access: Data stored in the cloud can be accessed from anywhere, at any time, by anyone (with password control, of course). It’s great for collaboration.
  • Scalable: Most cloud apps are able to grow with your business without you having to worry about upgrades or new hardware.
  • Cross-platform: No more compatibility issues if you use both Macs and PCs in your office, as most cloud apps work well from either.
  • No upfront cost: You don’t have to go out and buy a piece of software; instead you pay by monthly subscription.
  • Data security: The level of security offered by cloud vendors is typically far higher than that available to most small business owners, from access control to backups and hardware redundancy.
  • Integration: Clouds apps are typically very easy to integrate, allowing users to add extra functionality as required. For example, some cloud-based accounting systems allow add-ons of customer relationship management (CRM) and point-of-sale (POS) systems.

Disadvantages and concerns

  • Security: This is the concern I hear voiced most often, either in terms of loss of data or the risk of unauthorised access, however, as mentioned above, the level of security offered by cloud-based providers is often greater than you’d be able to implement yourself.
  • Cost: While there is no upfront cost to many cloud apps, you do have an ongoing monthly subscription to pay, so do the maths before making a decision. It will typically cost more than the one-off purchase price of a similar desktop solution.
  • Response times: For some users the delay between hitting ‘OKAY’ and the system being ready for you to enter the next transaction will be a problem. This delay will depend on your internet speed and the current demand on the cloud application’s servers.

Which of these are relevant to your business?

For most small business owners having a system that they can access from anywhere, that works across platforms and that has good security represents very significant advantages. This is especially true for businesses that are relatively young or unestablished and still working to implement the infrastructure they will ultimately require.

The security concerns some people raise remind me of similar conversations we were having about internet banking about a decade ago. At the time, more than a few people where hesitant to embrace it, but today internet banking is the norm for many.

The reality is that there are security risks associated with both cloud computing solutions and desktop systems. Whichever way you decide to go you will need to protect your passwords, and to anticipate that there may occasionally be security breaches and even data losses (although I have yet to see any of these in the business apps we work with). With desktop solutions you also need to consider issues such as theft of hardware, destruction of data by fire or flood (sometimes along with the backups), and the impact of malware allowing cyber criminals to access your data.

"The level of security offered by cloud vendors is typically far higher than that available to most small business owners."

Want more articles like this? Check out the Cloud technology section.

When making a decision about cloud computing solutions, it’s also important to consider the long-term viability of the proposed provider. If your provider goes out of business you may have only a short period of time in which to access and export your data. While there are no guarantees, in my business we attempt to offset this risk by using and recommending vendors that we believe have viable businesses.

If the vendor does fold, or if you decide to switch to another solution, you will need to be able to exit the application easily. In choosing a cloud-based provider, it’s critical that you can move on freely and extract your data in a format suitable for migrating to another platform.

Have you implemented cloud computing solutions in your business and if so what have your experiences been?

Rhys Roberts

is a commercial accountant who provides the range of services a CFO typically provides to a larger business. He will help you implement financial systems, run your accounts department and provide the information you need to improve the performance of your business.

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