Three Misconceptions about Cloud Computing Every SMB Owner Should Know

March 27th, 2014 by admin

Man's hand holding up an ethernet cable towards a cloud

By this point, nearly every small and medium sized business owner has heard of the cloud and has a basic understanding of cloud computing.

A majority of them have probably even considered moving their data and applications to the cloud, not wishing to appear behind the times to both clients and employees, or eager to take advantage the the cloud's seemingly endless benefits.

However, making the move to a cloud environment is an important decision that should not be based solely on what's new and hip in technology, but on whether the cloud would truly be a strategic fit with a business' unique needs and future goals.

To begin the debate on whether or not is makes strategic sense for a small or medium sized business owner to move to the cloud, there are a few important considerations, or what could even be called misconceptions, about cloud computing that are important to clear up.

This discussion should get you thinking more honestly and strategically about the cloud and its strategic fit with your business.

Three Common Misconceptions (or Important Considerations) about Cloud Computing for SMBs

1.  "Everyone is in the cloud. We are behind the times if we don't make the move."

Field of sheep with text 'Better Get With the Program'

The sheep mentality at its finest! Since everyone is doing it, why shouldn't we?

However, this statement is inherently flawed because it's simply not true.

The buzz surrounding cloud computing is so great that it would seem everyone and their mom has virtualized already, but the vast majority of brick and mortar businesses are in fact NOT in the cloud. 

So who is in the cloud?

The majority of current cloud use is for DevTest (Development Test) purposes. A company that develops software will use the cloud as a development and testing environment before they bring their software to market. Developing software on cloud servers is not only substantially cheaper than the alternative, but great for companies that need servers rapidly and then only for a set period of time (server rental, essentially). Using cloud servers results in much greater ROI than would be possible with in-house DevTest environments.

Yes, this kind of DevTest environment comprises the vast majority of cloud use today. The fact is, many other businesses don't yet trust the cloud for their mission critical business operations and applications, and the cloud is not always appropriate for brick and mortar companies. It is often slower than in-house servers, less secure, and can cost more money over time (see #3 below).

2.   "It's not like we'll lose ownership of our data when we move to the cloud. We still have control."

This is a VERY heated topic. When you put your "stuff"  in the cloud, you are essentially entrusting it into another entity's care. You may still consider it to be your data (and the cloud service agreement you signed may assure you retain complete ownership), but some of the terms of your ownership and overall responsibility have changed dramatically.

Blue cloud icon 'raining' 1s and 0s

Let's say your cloud provider goes out of business or the US Government puts it on lock down, enforcing a subpoena on your data without first giving you a chance to take stock and get your stuff out of there. Though this story is a few years old, this is still a great example of how your data could instantly become unavailable to you just because it is located on the same server as other, legally compromised data. In these situations, there's a good chance you won't be able to get your data back, and surely not in a timely manner.

Think of a cloud provider like a bank - we entrust our money to a bank and trust the bank will safeguard our assets. Deposit Insurance allows us to keep this trust.

However, the cloud doesn't come with this kind of trust insurance. If our data is somehow lost or compromised in a cloud environment, we will never get it back as it was. Data is not fungible like cash is. To make matters worse, the majority of cloud providers have a hands-off approach to security and data loss, and cannot be held responsible for any loss a client experiences.

It all comes down to trust. Putting your data and business applications in the cloud means entrusting that cloud provider with safeguarding your digital assets. Your data and applications still essentially belong to you, but the terms of ownership, responsibility, and trust have clearly changed. In this instance, many small and medium sized business owners would prefer to keep their trust in-house.

Note: It is important to consider that the terms of ownership and trust may change depending on the cloud environment you choose for your business (Public Cloud, Private Cloud, etc) . The above information is meant to be a very generalized summary, but of course each scenario may be different. It's important to do your own research.

One important thing to keep in mind: If you are sold on the cloud but highly concerned about data ownership and accessibility, choose a cloud provider that does not give itself access to your data or encryption keys. The lock and keys should be kept separately by separate entities - it's as simple as that.

3.   "The cloud is tremendously cheaper - think of all the hardware we won't have to buy!"

This is an argument we hear time and again. The whole argument of the cloud being cheaper than its hardware alternatives is often smoke and mirrors.

Think of  cloud services like a rental car. When you sign a cloud contract, you are essentially renting a car rather than buying one. Yes, it may be cheaper than buying hardware up front, but after a few years of paying rental fees, is it still cheaper?

Two 3-D clou graphics sitting on four $100 bills

Of course, the cloud can be extremely useful and cost-effective in certain situations. In our business as a Bay Area network service provider, we often need to get a new company up and running extremely quickly, and utilizing the cloud may be the fastest and most cost effective way to make it happen. In this case, we would first create a basic infrastructure in the cloud so the new business can open as planned, and only then begin the process of transferring IT infrastructure back in-house without compromising the client's overall productivity. This kind of strategy uses the best of both worlds - we utilize the ease and short-term cost effectiveness of the cloud with the long-term cost and productivity benefits of in-house IT.

It is vitally important to look at the cost of moving to the cloud from a long-term perspective. How much money will you be saving (or losing) over time vs. keeping your IT in-house? An experienced IT Advisor can help you with this process.


These are just a few considerations about the cloud we believe every SMB owner should take note of and understand before considering a move to the cloud. Though some people will feel that no matter what, the cloud is best, we're here to help the more savvy business owner determine what is right for his or her business based on facts and our wide range of experience in the field.

If you need help determining whether the cloud makes strategic sense for your business, please get in touch with us today. We serve businesses of all kinds in San Francisco, the Bay Area, the Peninsula, San Jose, San Mateo, Redwood City, Palo Alto, etc.

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