2016-09-06 13:26:36Product & ServicesEnglishCloud computing lets you store files and services online rather than on your computer?s hard drive. Learn more about why this might benefit...https://quickbooks.intuit.com/r/us_qrc/uploads/2016/09/feature-e1487029736127.jpghttps://quickbooks.intuit.com/r/product-services/service-business/what-is-cloud-computing/What Is Cloud Computing?

What Is Cloud Computing?

5 min read

Cloud computing is storing and accessing files and services online rather than on your computer’s hard drive.

If you have questions about what the cloud is and how it might benefit your small business, you’re not alone. Here are some straightforward answers regarding the biggest questions surrounding the cloud.

Cloud Beginnings
The idea of cloud computing isn’t new. In fact, we’ve been talking about it for about 50 years. First proposed as an “intergalactic computer network” that could connect users worldwide, its current capacity reaches much further than we initially predicted.

The technology was once only accessible to large corporations. But now small businesses benefit greatly from switching to the cloud. In fact, cloud computing has sparked certain trends in the small business world — like the increase in employees who can work remotely.

How Cloud Computing Works

The cloud is divided into four broad models: cloud storage, software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS). Cloud storage and SaaS are the two models most relevant to small businesses.

Cloud storage servers are used as a data warehouse. You transfer information to the cloud but don’t run any cloud-based services on your network. This could take the form of web email services or web hosting providers — like Dropbox, Box and Google Docs — which store all website data off-site.

The most common service model today, SaaS, delivers applications via the cloud. This model is especially appealing for small businesses because it rids them of the responsibility of setting up, maintaining or managing any IT in house. SaaS has a low learning curve and low initial setup costs, making the barrier for entry minimal.

Collaboration tools like Slack, word processing suites like Microsoft’s Office 365 and full-service sales CRM platforms like Salesforce are all examples of SaaS.

In action: A user logs in to a SaaS application — like QuickBooks Online, for example — through a web browser. It doesn’t matter where the user’s computer is located since processing and storage are handled in the cloud. A user can do whatever they need to do, just like they would if the software was installed locally on their computer.

The cloud is also divided into three major types: public, private and hybrid.

Public cloud computing resources are hosted by providers on a public server, meaning multiple companies may share the same physical hardware but are kept digitally discrete. Benefits include lower cost and a large resource pool.

Alternatively, companies can choose private clouds, which may be hosted off-site or on-premises. If hosted on-site, private clouds differ from traditional servers because they typically include capabilities like automated server provisioning, virtual machine (VM) deployment and redundant failover. Businesses have total access to resources and do not share the space with any other customers. Costs are higher, but IT pros gain increased control over the cloud environment.

And finally, hybrid solutions are a mix of public and private services emerging as a way for companies to balance speed and security. This goes hand-in-hand with “multi-cloud” computing, which sees organizations tapping multiple providers for different niche services.

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Benefits of Cloud Computing
Businesses enjoy a number of specific benefits from cloud adoption.

Flexible pricing structure
A variety of pricing structures exist with cloud storage and SaaS. This is nice because you aren’t paying for something you don’t need. Two popular structures are:

  • Pay per use, which lets you accurately predict the total cost of cloud computing month-to-month. Scalable cloud resources make it possible to handle increased network or application demands on-the-fly and without buying new hardware. Amazon EC2 uses a per-use pricing model.
  • Fixed or subscription-based pricing is boiled down to one set price regardless of usage. This means you could use the software all day everyday or never sign on during the month and you’d be charged the same. This model can be further separated into a fixed price per user. Slack is an example of a subscription-based, per-user service.

Fewer upkeep responsibilities
With no physical infrastructure, there’s no maintenance or upkeep for businesses. Businesses aren’t responsible for maintenance or upgrading software either; this includes updating security. Providers operate on a large scale, which means they have a large pool of available resources to protect and maintain data for their customers.

A backup system
Small businesses don’t have to worry about having their data or servers wiped out in a natural disaster or damaged by human error since nothing is saved on physical computers.

For further peace of mind, many cloud services store data in multiple locations so that if something happens at one of these storage hubs, your data lives somewhere else as well.

Future of the Cloud
The “intergalactic computer network” once proposed by early cloud innovators is now treated as a utility — just like water, electricity and gas. It’s a business resource that’s not going away. Current trends include:

  • The cloud’s flexibility is guiding the direction of small businesses. More and more small businesses are embracing the move toward cloud computing because it’s now accessible and affordable. It also encourages flexibility and mobility for employees.
  • Businesses are currently finding the cloud most useful to use in a hybrid form — one foot in the cloud, one foot on the ground. Though trends indicate we’ll continue moving toward a majority cloud business world.
  • Though cloud security was initially a concern, it’s now safer to keep data in the cloud than it is to keep it on your desktop.
  • Businesses can future proof by moving infrastructure off-site and handing over the reigns of maintenance and upkeep to larger, more-resource heavy cloud computing companies.

Making the most of this new computing resource means knowing what it is, where it comes from and how it can benefit your bottom line.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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