Business Practices: Cloud Computing for Small Business


The “Cloud” is the IT buzzword of the last few years. Are you in the fog regarding Cloud Computing? If you are not already familiar with Cloud Computing, it is a good idea to become familiar with it as it is purported to be a game-changer in how people and business view computing systems, and their implementation. If you believe you know what Cloud Computing is but are not sure, you have good reason to be; the term itself is very nebulous (last pun, I promise). Cloud Computing means different things to different people. Additionally, like any technology, there are pros and cons to Cloud Computing, concerning costs and productivity, and legal concerns, and you should be well aware of them before transitioning for yourself or for your business.

At its simplest, Cloud Computing is the use of a network (e.g., the internet) used to deliver real time applications or software for the user’s purposes. Imagine you want to write a friendly letter to your favorite attorney; traditionally you would open Microsoft Word on your computer, key in the contents of your letter, print out the letter and put it in the mail. In this scenario Microsoft Word is a program that you purchased and installed on the hard drive of your computer- you own a license to use the program in perpetuity and, although you may download updates from time to time, your use of the installed Microsoft Word is not dependent on Internet access. If doing the same in a Cloud Computing environment, you would open your web browser, type in the application’s URL (e.g.,, the web browser would display the Microsoft Word graphical interface, you key in the contents of your letter, print out the letter and put it in the mail. With Cloud Computing, the software developer (Microsoft in this hypothetical) ma provide users with access to for free or it may charge a usage fee. Additionally, when in the Cloud, the Word program is not installed on your computer and, consequently, there is no need to download updates. Going back to the traditional computing world, conceptualize ever Word user in the world working right now on their own copy of Microsoft Word installed on their personal computer- some users are still using Office 1995, some have Office XP but never updated it, and a lot are using pirated copies. Back in the Cloud, every Word user in the world would be using the same installation of Word- the state of the art one at

Cloud Computing can be even simpler that the above example; webmail services, such as Google’s Gmail or Microsoft’s Hotmail, are examples of simple Cloud Computing services. Gmail and Hotmail store your email messages on their servers and you can access your email through any web browser in the world. Additionally, rather than have a local area network connected to your office server, Cloud Computing can provide remote file storage on the Cloud provider’s servers. Therefore, to access the proposal you prepared last week, rather than searching your office server’s local directory, you would simply open your browser and direct it to your Cloud provider. Theoretically, in the Cloud a web browser may be the only program you need to install- think of software as a service instead of a product. Any computer with internet access and a web browser will be interchangeable. If you need to use a software program, go to its website and use it. More and more software coming online: GoogleDocs is a free Cloud office productivity suite (GoogleApps is a business class version); QuickBooks bookkeeping software, Skype video conferencing, etc. Cloud Computing alleviates back-up worries, removes the need to update your software and maintenance issues (reducing IT costs), allows for easy collaboration, and provides anywhere access to your files and programs.

Understandably, security and privacy are tow of the biggest concerns for those weighing the transition. Your work files will no longer be in your custody and control. While this relieves you of the duty of making back-up copies and maintaining the system, it does mean that you are entirely dependent on the service provider and having internet access. Loss of internet access will mean loss of access to your digital data. In that regard, consider the following legal issues:

1. Where is your data physically stored? The physical location of the servers storing your data may determine the legal jurisdiction of any action to recover your data, and, ultimately, it may affect what legal remedies you actually have.

2. Is the Cloud provider responsible for your lost or hacked data? Many of our records contain proprietary and confidential information. Whenever we entrust them to a third party, whether it be through a computer network or real world hardcopies, we do so with the understanding that security may be compromised. Consider the level of liability coverage offered by the Cloud provider.

3. Will your intellectual property rights be protected? Imagine the Rolling Stones storing mp3 music files of their next album on a Cloud server, or Coca-Cola doing the same with the secret formula. Once the genie is out of the IP-bottle, containing the spread of y our IP is near impossible and very costly. With this in mind, consider what third parties your Cloud vendor may allow access.
Google, Amazon, Cisco and the other major Cloud providers have invested greatly in Cloud Computing. These companies understand that continuity of access and security are important considerations for companies weighing the jump, and they are fittingly doing everything in their power to alleviate these concerns. So much so that Amazon’s partial Cloud outage in April was front-page news in the IT community. Nevertheless, it is important for any company making the switch to first read the fine print, with an eye toward the answers to the questions raised above.

* is actually owned by Merriam-Webster.


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