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Pros and Cons of Investing in Cloud for Small Business

Updated on December 29, 2014

-By Simrat Singh (Sam)

What two things does all small business have in common; they are ‘small’ and are looking for ‘success’, but ‘success’ is a relative term with lots of paradigms involved. Saving time and money is most crucial to ensure business success, irrespective to the size or maturity of the firm. Cloud services and solution are the ‘buzzword’ for the today’s entrepreneurs which can help cut cost and save considerate amount of time to be focused on essential business functions.

Cloud computing delivers! The idea of cloud computing might be hyped but the fact still remains "its value for money". It has its ‘pros’; but there are also ‘cons’, to decide the use cloud computing and its relevance to your business; you need a basic understandings of cloud solution & services and a generic idea of how they can bring value to your firm after carefully weighing the pros and cons.

First thing first ‘What is Cloud’?

In my previous articles and blog posts I have discussed what is cloud computing but still it won’t hurt to brush up, cloud computing is a ridiculously efficient way to leverage the computing, sharing, software and other IT services on demand. The users share processing power, storage space, bandwidth, memory, and software’s. Sharing of resources helps achieve coherence and economies of scale making cost go down much like an electric grid; e.g. if you own a house and a power plant/source is setup individually, the cost drives up but one power plant that shares electricity among its users helps achieve economy of scale. Same way if an individual IT infrastructure is set-up it drives the cost up immensely. Thus Providers of cloud computing solutions, whether they are software, hardware, platform, or storage providers, deliver their services over the Internet, making no need to buy heavy & costly servers, hard-discs and other IT equipment.

Pros of Cloud Computing

Negligible startup cost / investment

All you need is a functioning computer with reliable internet connection to take value from your cloud solution. There is no need to buy or invest in new hardware, software, or hiring additional IT employees.

No maintenance cost

There is no maintenance cost associated with the cloud solution as you don’t need to update maintain or repair any server or equipment, making it a cost effective solution.

Easier management

As the equipment are remote and third party concern it librates you from any logistical issues, there is no need to plan power and space requirement in order to leverage the cloud solutions making extremely easy to manage.

Small monthly payments

As there is no large upfront fees required the cloud solutions are easier on the pocket. Many cloud solutions like SaaS (Software as a service), PaaS (platform as a service), etc. are available on monthly fee basis with no long term contract obligations.

Dynamic scalability

Today IT Scalability is must for any business; it signifies optimum utilizations of the computing/storing capacity for a business. There is a fluctuating need for capacity, to avoid over capacity or under capacity and strike a balance in harmony with the ‘ideal capacity’. That will allows you to scale up or down as budget grows or tightens and allows you to value the fluctuation. You can quickly add additional licenses, storage space, on as needed basis.

Provisional capacity

There is often need for extra capacity for temporary projects, investing in new severs and database hardware for that is just a waste of resources and sheer stupidity, cloud computing offers this feature where the users can temporary use of extra capacity without wastage of resources.

No contingency cost

In-house backup databases & servers are the additional cost that a small business are resilient to spent, with small IT budgets and cost cutting there is almost no IT contingencies planned. But cloud computing datacenters offers the way, if an component fails or there is an equipment failure the other components & servers takes its place in fraction of seconds making data more backup secure.

Universal accessibility

Cloud computing solutions are accessible by anyone from anywhere at any time all you needs is a stable internet connection, as its not fixed and confined to the business premises its universally accessible, making it a blessing for small businesses that are spread across a large geographical area.

Faster deployment and initiation period

With cloud computing the deployment rate is fast as compared to any in-house IT solution, as you don’t have to buy, plan, build or setup IT hardware and equipment, software applications, etc. Thus with cloud offerings you can start using the services within hours rather than weeks or months, making it a fast and a reliable way.

Cons of Cloud Computing

Downtime and outage

We think that the cloud solutions will be available every time all day, but even with the cloud technology there is no guarantee of unforeseen from not happening; the hard truth is the uptime is entirely out of your hand. Generally there are three reasons for downtime:

Scheduled downtime is often carried out for the purpose of upgrading new software, installing new hardware or to perform routine maintenance, it’s generally performed in after hours and is informed well in advanced.

Unscheduled downtime also known as outage is generally some sort of equipment failure or technical problem. It is rare but it does happen even with the biggest cloud providers and MSPs (managed service providers)

Intermediary outage is associated with the third party providers like ISPs (Internet service providers) if the internet goes down there is no connection to the cloud services. Thus to efficiently leverage cloud services you need a reliable internet connection.

Security issue

There is always that factor that you are turning over sensitive data to third party and exposing it to potential risks without proper level of cloud security your data could be exposed or hacked but this factor is completely variable to the security provide by the MSPs.

Possibility of Data loss

There is a possibility that you might lose some data due to hardware failures, outages, improper backup procedures, hackers, and rogue employees, that’s why choosing the right Cloud Service provider is of utmost importance

Integration and customization

Some web based software solutions and cloud services are offered as a one size fits all solution. If you need to customize the application or service to fit your specific needs or integrate with your existing systems, doing so may be challenging, expensive, or not an option.


For small business it’s very important to decide carefully after weighing both the pros and cons to choose a MSP and a solution that is right fit for them. For small business, cloud computing offers a number of attractive benefits. With the pay as you go model there are no large, upfront investments in hardware or software licenses so your IT costs can be significantly reduced. You or your IT staff does not have the additional burden of keeping new software or hardware updated and running. The ability to access your data from anywhere using any one of a variety of Internet capable devices can be a major convenience or even a lifesaver.


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