Cloud computing and hosted services

Cloud computing could simplify IT management and reduce costs for your business.

If something is 'in the cloud', you access it on the internet, usually logging in to a website with a username and password. Cloud computing allows you to log in to IT resources online, rather than managing them in your company.

In essence, you take advantage of computing power that’s outside your business, rather than relying on computers in your business.

This has two main benefits:

• Lower capital expenditure. There are no expensive, up-front costs for hardware or software. You just pay a monthly fee to your cloud computing provider.
• Reduced complexity. Management and support are the service provider’s responsibility. If something goes wrong, you just call them.

To access cloud computing services, you need a computer and internet connection. Cloud computing is a broad term that's also sometimes called application hosting, hosted services or software as a service.

Cloud computing services

In general, if you’re paying a subscription to access a service online instead of buying software to use in your business, that’s cloud computing. You can use it to perform lots of different tasks:

• Email. Cloud-based email – like Microsoft’s Hosted Exchange – means your business email is handled by an external provider, instead of passing through a server on your premises.
• Customer relationship management. Setting up an in-house CRM system can be complex. With a cloud computing service liek Salesforce, you can often get going more quickly.
• Collaboration tools. These centralised services, which allow you to share, manage and track changes to documents, are ideal for cloud computing. Examples include Basecamp, Trello and Microsoft Hosted SharePoint.
• Office software. You can log in to a website that functions like a word processor – and save documents online too. Microsoft offers Office 365, an online version of its powerful Office software.
• Accounting software. There are several online accounting services which let you manage your finances online. These include Sage, QuickBooks and Xero.

Cloud computing is well-suited to services which are used by several people in your company (like your CRM system or a collaboration tool). It’s also ideal when you need to provide access from several locations, or where it’s important you keep data off-site.

Some services are less appropriate. For instance, photo and video editing software still works best when installed on an individual computer.

Why cloud computing?

Cloud computing has four main advantages over running software within your business:

• Simple management. Cloud software and services are managed by their suppliers – so you don’t have that headache in-house.
• Cost effectiveness. Cloud computing or hosted services are purchased on a subscription basis. You pay by the month, based on what you use.
• Scalability. Cloud computing gives you access to extra computer power whenever you need it – so it copes easily with business growth.
• Better mobility. Because you access cloud services over the internet, they’re ideal for working on the move. You just log in to access your data – from anywhere.

Although these advantages can be significant, there is a downside. Cloud software requires a reliable internet connection. If that fails, your data is stuck where you can’t access it.

Additionally, although cloud computing providers go to great lengths to protect data, there are still risks. What happens if the company behind the hosted services goes bust or is attacked by hackers?

That’s not to say cloud computing is unsafe. In fact, often the risks may be lower than those involved in managing services yourself. It’s just important to evaluate them carefully. It’s usually safest to go for big-name providers which have an established customer base.

Are hosted services for you?

The number of cloud services available has grown enormously in the last few years. Combined with the wide availability of good internet connections, it’s now feasible to run most areas of your business IT in the cloud, if you want to.

However, you don’t have to go that far. You can often try cloud computing at a low cost and with little risk. For instance, a service to run your company intranet should cost from £10 a month. Given the money saved over buying a server, installing intranet software and learning how to use it, that makes the cloud a very attractive option.

Popular content about cloud computing:

• Cloud computing services to get you started
• Can the cloud make you more efficient?
• Five ways to prepare for the cloud