Five Considerations for Small Businesses Considering Cloud Services

Apple’s recent news on its upcoming iCloud initiative highlights the momentum and excitement behind cloud services and is sure to usher in a new round of cloud offerings from others, in addition to putting focus on existing services. While many cloud services appear to offer similar functionality, it is likely that each of these seemingly equal services are implemented and operated very differently. With this vast amount of functionality delivered through the cloud, there is a potential downside — data can be lost, inaccessible for days, or get into the hands of the wrong people. Some may ask, are cloud services worthwhile given all this risk? The answer is yes, because the benefits, such as lower capital expenses, less IT-staff, a more predictable spending model and higher productivity, out weigh the risks. Here are critical considerations to help businesses mitigate the risk of cloud services adoption.

Intended Audience: Consumers or Businesses?

The first consideration, is basic but important – is the cloud service intended for businesses or consumers? While this may seem trivial, it is important because it is at the heart of how the product or service was designed. Was the key design goal to make it easy to share pictures and music with friends or was it security and dependability? In the consumer space, sharing is about getting the data out to as many people as possible, including easily exporting it to social media outlets like Facebook. This leads to a business model that supports getting millions of free ‘viral’ users that can be upgraded over time. However, if you are a business you may not want your business plans to be shared using a service built on this premise. Instead, you will probably appreciate a model with limited sharing to a team of only authorized individuals, whether they are internal or clients. More importantly, you want to easily control when access is shut off. Companies that claim to service both consumers and businesses are often doing neither. The “jack of all trades” approach usually doesn’t work because you only have so much time, money and resources to apply.

Location, Location, Location

Where is the data-center? Running the data-center infrastructure behind a cloud service is a major undertaking. Many companies chose to punt this operation and simply assign a third party such as Amazon Web Services (AWS). The problem is data centers go down, leaving you at the mercy of your provider. In April, AWS had an outage that took some customers like Foursquare and Reddit down for days. Again, this may be OK if you are a consumer getting a free service that stores your bookmarks, but if it’s your business that suddenly can’t get to its most important files or sales data, this is major problem. It is also important to note that depending on which service you are using, the company behind the service may or may not be able to easily migrate its service to its own data-centers. If you are storing or syncing your files to a service, chances are that the company has billions of files stored in its data-centers. Depending on where you are in the world, you may also want to consider the exact location of the data-center. For instance if the datacenter is in Europe and your business is in the western U.S., there may be performance considerations because of the latency in the network over long distances.

Two is Better than One

Does your service store data in more than one location? Cloud services need a backup plan and in cloud computing we call this geo-redundancy. Geo-redundancy is important in case of disaster, be it an earthquake, hurricane or fire. If any of these disasters happen at the site of your data-center, it’s likely that the site will go down. What will that do to you as a customer? Geo-redundancy is important because it means that the data is stored in more than one location; if one data-center goes down, your data is still accessible. Another consideration is to know how your data is stored. Is it on traditional hard disks or is on tapes, which may take a while to retrieve and could impact your ability to get backup data restored quickly.


The next thing to keep in mind is which standards does the cloud service adhere to? There are several important standards; SAS70, which means that the data-center is guarded with strong security, like biometric access, HIPAA, which is the healthcare standard for dealing with patient information. While cloud services are not healthcare providers they fall under the category of suppliers to healthcare providers, and in order to offer a HIPAA compliant service they need to make sure all data is strongly encrypted while transmitted and also when stored. SSL is also used, and simply refers to encryption of data that is transmitted over the Internet, and should be seen as a minimum requirement for any cloud service.


Last, but certainly not least is the reputation or “track record” of the service. Cloud computing and the associated operation, is a practice that takes significant time and skill to learn and master. Even Apple, ran into some problems when they first launched MobileMe, and a few years back Microsoft infamously lost all the data stored by users of the Sidekick mobile device. Developing a cloud service is one thing, scaling it and making it secure is something completely different. Look after things like historic uptime, time in business or for smaller providers successful partnerships with larger companies that have already validated the service.

The cloud is the future, but just like with many other technologies before it, it will take some time for it to mature. During this transition time, businesses need to make an educated decision about which services to use – the good news is that the cloud is here to stay and is an excellent resource to help small and medium-sized businesses prosper.


Written by guest author Martin Frid-Nielsen

Martin is a Silicon Valley innovator and in 2005 founded Soonr, long before the term cloud-computing was coined. Soonr offers a cloud-service targeted to small and medium-sized businesses to enable them to easily store, sync and access files across devices and teams so they can do business faster. Soonr has earned the trust of over 50,000 companies worldwide, and has learned first-hand what’s needed to deliver and earn the trust of companies to store their data.

One comment

  1. Great Article. One more additional criteria I would suggest would be the Security of the Cloud Service Provider. Its a very important criteria that I would ask my clients to take into consideration while evaluating whether a cloud route is right for them. 

    Cheers, Vijay

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