Thinking of moving your business to the cloud? Understand the pros and cons


Running your business in the cloud is becoming an increasingly popular model for businesses of all types.

Thanks to the innovations in the cloud space, many SMEs have incredible opportunities to grow their business and reap the rewards.

If your New Year's resolution was to discover new ways to make your business more efficient and you’re thinking about switching over to the cloud, let us help you out. As with any big business decision, you need to weigh up the pros and cons. We’ve put together a list for you to consider before your business makes the switch.

What is the cloud?

Despite the name, the cloud isn’t a magical, misty mass sitting above us where all of our data is stored. It’s a physical infrastructure made up of many computers, stored in mammoth warehouses around the globe. The idea is you can access whatever you need (photos, a movie, that auditing spreadsheet or client proposal) from any device, at any time.

Cloud computing, at its best, can be incredibly convenient and a big money and time-saver, but that’s not always the case. Let’s take a closer look at the pros and cons of running your business in the cloud.

Pros of moving your business to the cloud

Increased collaboration and flexibility

With your company’s data available to anyone with access to an internet connection and required permissions, you can have employees work remotely. This opens up a world of possibilities including employing people overseas and flexible working conditions for families.

Cloud tools also increase the ability to collaborate - both internally and with clients. Small businesses can now, for example, allow clients to go directly into a project to make changes, give real-time feedback or ask questions. Shared documents means less email clutter and often minimises version control issues. Version control has so many benefits such as not losing data and reducing confusion for everyone involved in a project. 

Data recovery

If your information is stored in the cloud you have a much better chance of recovering your data if it’s lost or compromised. The server infrastructure your data is stored on will usually take daily backups of your information and store that data on multiple servers. This is to safeguard you if there’s an outage in the location where one specific server is located.  

We see companies pay large sums to recover data every day. In this example, the company paid $9000 to recover lost data. You can minimise such costs by having a good disaster recovery plan in place before disaster strikes, which could cost an average and much lesser sum of $1000 per year. The cloud-based preventative measure is not only more cost effective but also quicker to retrieve the data.

Data centralisation

As mentioned, if your data is in the cloud it’s in one central location providing you easy access. This means you’re less likely to lose your files and you can access them from anywhere. One benefit of this is being able to monitor your business even when you’re not there.

Cost reductions

SMEs have an incredible opportunity with cloud based computing to run at an enterprise level. The cloud eliminates previously expensive upfront software costs (eg the Adobe creative suite) and replaces them with monthly on-going fees. It also allows the business to only pay for what they need at that stage of their growth cycle, as they grow they can increase the cloud subscription to suit the business’ needs.

Environmentally friendly 

There are also environmental benefits to switching to cloud computing; it can reduce your energy consumption and see your carbon footprint decrease. Small companies can reduce their energy bill by up to 90 per cent, which is a huge saving both for your business and the environment, and who can say no to that?

Cons of moving your business to the cloud

Security and vulnerability

Who do you trust with your data? There are still many security and ownership questions that cloud based computing raises.

Whether it’s Adobe’s creative cloud, Dropbox or Google Apps, you’re renting from these companies and they give you a service in return.

These companies have to abide by many rules and regulations to keep your data safe from hackers or security threats, but sometimes mistakes can be made. And anything online is more vulnerable to an attack than a completely offline network or hard drive storage solution.

It really boils down to how sensitive is your data? If you have to follow incredibly strict compliance laws and regulation to protect your information, cloud based computing may not be best for you. It is important to acknowledge that data leaks are rare but can happen.


If you do not have an internet connection you may face difficulty trying to access your data. Whether you’re in a remote location or the internet has simply gone down, your entire business could be on pause until the issue is fixed. However, this all depends on what type of cloud service you use. For example, many services offer ‘offline’ working options (Google Apps for instance). You can still access your files but any changes won’t be saved until you’re next online. If you’re offline you also can’t collaborate or use the save functions.


Your cloud-based company will likely have servers in multiple locations in case of an outage in one area. But despite how many they have, even the biggest servers can go down due to weather conditions or faulty hardware. Your data is almost always recoverable but in the meantime, an outage can put your business ‘on pause’ for a period of time.


Cloud software can become messy if it isn’t well managed by your administrator.

Privacy has many facets. Most importantly it’s your responsibility to make sure your staff have the correct privileges and access to what they need to get their job done.

Conversely, it’s not likely that everyone in your business needs to know the name and address of your client. It’s also crucial to ensure your employees do not have access to sensitive information e.g. a colleague’s performance or salary data.

While easily configured in most cases, you’ll need to ensure you’re compliant with all privacy laws and regulations governing your industry.

Final thoughts

Cloud-based software can revolutionise the way you do business, but there are some drawbacks you need to consider before taking the plunge. If you’re seriously thinking about switching to the cloud it’s important to consider that it’s a tool. Humans still design the process and strategy to drive the tool and make it a success - for now.

CeBIT Australia SME Summary Report