Understanding the Small Business Cloud

As entrepreneurs, we're increasingly hearing that cloud computing can benefit our businesses; but what is the "cloud" and how exactly does it work? The fact is that you've probably been using cloud computing for years, perhaps without realizing it. If you have a Hotmail e-mail account, use Facebook, or do your banking online, you're utilizing the cloud.

The cloud simply means applications and services that people access via the internet instead of installing software on their own computers. If you're online, you're somewhere in the cloud. The reason for so much discussion about these services lately is that, over recent years and months, many valuable services that once required installing applications have become available as cloud services. Often, businesses can use free versions of these applications in the cloud, while full-featured versions are available at low subscription rates.

For example, Microsoft's recently released Office 2010 contains free and subscription-based cloud versions of its popular business applications like Word, Excel and PowerPoint. Through the cloud, these documents can be accessed anywhere via browsers or mobile devices. Similarly, Google's Gmail and Google Docs operate in the cloud.

As it turns out, the cloud is more heavy-duty and provides more utility than initially perceived. Entrepreneurs now can access customer relationship management tools like those offered by Salesforce.com and SugarCRM.com; project management applications like Redmine, Basecamp and Clarizen; services to send digital files like Yousendit, and many other business-oriented programs via the cloud.

Should your business be in the cloud?

How do you know if your businesses backoffice operations belong in the cloud? Keep in mind that it's not an either-or decision. You can continue to use the software you've already invested in while combining them with cloud-based services. Once you've had a chance to evaluate what is available online, you can make the decision to go entirely in the cloud, if it makes sense for your business. In the meantime, here are a few ways the cloud can offer entrepreneurs and small businesses enormous benefits:

Save on resources

• You generally don't need to pay an IT specialist to maintain software and install new programs and updates.
• Reduce operating expenses and streamline IT deployments.
• Decrease hardware investments. You don't need to buy servers for your office, because your files and applications all can be stored online.
• You never need to buy a software upgrade for a cloud-based application; the company that hosts the application always keeps it up-to-date, and the latest version is immediately available to all users.
• Your employees can occasionally (or exclusively) work from home, a hotel or the neighborhood community center if your applications and files are stored in the cloud, saving the costs of commuting to an office, as well as the energy costs of heating, cooling, lighting and running equipment in the office.
• Rather than bulk business licensing, most cloud offerings are subscription-based. Therefore you have the option to purchase a single-user subscription or a full-office subscription for your entire company.

Make your business appear bigger

• The cloud offers reliability, so there is little need to worry about data recovery or losing valuable business data.
• You can use any computer in any location to access your work, not just one that has the software.
• If you have employees in several locations, they can more easily collaborate in the cloud than they would with individually stored files. They all can download, revise and save the same document that's stored in a single location online, and you never need to worry about on whose computer the latest version of a document resides.

Alternatively, you may want to evaluate these considerations to determine if using cloud services is realistic for your organization:

• How reliable are the online services that you intend to use? A cloud-based service provider should offer assurances of a 99.9 percent uptime with exemplary security and privacy offerings.
• When storing to the cloud, be sure to research confidentiality, integrity and security policies for the service.
• Ask questions about governmental requirements for outsourcing data and regulatory requirements for data transparency and reporting.

A good way to get started is to try one of the free versions of cloud services that are available. At www.Live.com, for instance, you can work with Word, Excel, PowerPoint and OneNote; store and share documents and photos; set up an e-mail account; and even create a social network among your contacts, all at no cost. Then you might want to try a file delivery site, like www.YouSendIt.com, where you can send files too large to e-mail (such as video, graphics, images and data-heavy documents). And if you haven't done so yet, create a Facebook Business Page and a Twitter account--again for free--to attract a network of colleagues, customers and friends who can share their best business practices with you.

With little investment, you can easily get your business up and running in the cloud. It is a versatile, yet dynamic option that helps you save on resources without skimping on substantial IT solutions.