Cloud Computing Defined
Cloud Computing is a computing model that permits users to access resources such as software, servers, storage and others via a web browser. These resources are housed at remote locations, and the term "cloud" refers to an infrastructure that ties them together in a way that is seamless to the user.
Instead of locating these services onsite and hiring employees to oversee them, a small business pays for Cloud Computing by subscription based on the number of users, frequently on a monthly basis. Certain large vendors, such as Microsoft, Google, and Intuit, offer packages that may include word processing, spreadsheets, e-mail, data storage, groupware, calendars, server access, remote security, billing, and others.
There are two types of cloud computing models:
- Public cloud. This type of cloud service is maintained by a vendor selling a product or service to a sizeable customer base. Examples include Microsoft Office 365 and Google Apps. A public cloud permits a small business to access technology resources quickly without investing in servers or personnel, a plus when an organization is small or is in start-up mode.
- Private cloud. As its name suggests, a private cloud is maintained for one organization, either by the organization itself or by a third party. A private cloud may exist onsite or off premises. Because a private cloud requires more knowledge and resources to maintain, it may not be viable for a very small organization that lacks the technology expertise to develop and oversee it.
The issue of a public cloud versus a private cloud need not be an either/or choice. Your small business can maintain a private cloud for sensitive data, such as customer information, and access a public cloud for other uses.
Advantages of the Cloud
Cloud computing presents many potential advantages for a small business, including the following:
- Centralized software and management. Cloud Computing vendors take responsibility for software upgrades, security patches and other ongoing maintenance issues. As technology applications become increasingly robust, a Cloud Computing model removes the burden of building and maintaining applications.
- Easy remote access to technology resources. Any business with a web browser, which in this era is virtually everyone, can get started in Cloud Computing.
- Potential for cost savings. Depending on the situation, a Cloud Computing model has the potential to reduce capital requirements, lessen energy and power consumption, and consolidate technology infrastructure.
There also are potential drawbacks that users need to understand.
- Security breaches. It is important to ask Cloud Computing vendors about security protocols. Determine whether a vendor implements multiple layers of security, employs firewall controls, restricts access and practices other commonly-used procedures. If you select a Cloud Computing model, your vendor may assist you in connecting securely to the cloud.
- Service interruptions. Vendors should maintain redundant servers and implement other practices that attempt to maximize customer access.
- Vendor instability. There is always the potential that a Cloud Computing vendor could discontinue a product offering, raise prices, be acquired or experience another business issue that is not to your advantage. Try to determine a potential vendor's financial strength and ability to grow along with your business.
If getting a start in Cloud Computing has potential benefits for you, the following tips may be helpful in your implementation.
- Start with a plan. Make sure your technology roadmap supports your vision for how you want to grow and manage your organization.
- Consider beginning with a single cloud application. This approach could help you gain experience on a relatively small scale, which will be valuable when moving more applications to the cloud.
- Try to learn about Cloud Computing before creating your technology plan. You may be able to find resources online, through business networking groups or at a local educational institution.
Cloud Computing presents many benefits, and a thoughtful approach may help you make the most of them.
© CitigroupCitibank, N A. Member FDIC.