Growth / Planning & Strategy

Pros and Cons of Cloud Computing for Small Business

Ben Snedeker

Updated: Sep 21, 2022 · 5 min read

Toolkit for download in this article

white clouds in the sky

Every day, more and more small businesses face the question of turning to cloud solutions for their data. In fact, the SMG Group declared that the cloud will be the top platform for digital transformation for small businesses.  And as more businesses move to the cloud to handle data storage, computing, and IT security, the shift has a potential to be disruptive to the way small businesses conduct business. While you want to stay ahead of the curve, the question remains: Which solution is right for your business? 

Rackspace offers an overview of public cloud vs private cloud computing, which we've conveniently summarized below.

What is the public cloud?

A public cloud is “based on shared physical hardware which is owned and operated by a third-party provider,” where the infrastructure is shared by many clients. Amazon Web Services, Microsoft Azure, and Google Cloud are examples of public clouds. Some of the most common real-world examples of public cloud services include services like cloud-based server hosting, storage services, webmail, and online office applications.

What is a private cloud?

On the other hand, a private cloud is “infrastructure dedicated entirely to your business that’s hosted either on-site or in a service provider’s data center.” Private clouds offer a lot of benefits, which can come at a cost. 

Small businesses should consider benefits of the cloud to be sure they understand which will work best for them.

Benefits of the public cloud

One of the main benefits that come with using public cloud services is the ease of scalability—to a point. For small and medium-sized businesses in general, scalability is pay-as-you-go. The resources are pretty much offered 'on demand' so any changes in activity level can be handled very easily. This, in turn, brings with it cost-effectiveness. Thanks to the pooling of a large number of resources, users are benefiting from the savings of large-scale operations. There are many services, like Google Drive, which are offered for free. 

Finally, the vast network of servers involved in public cloud services means that it can benefit from greater reliability. Even if one data center was to fail entirely, the network simply redistributes the load among the remaining centers—making it highly unlikely that the public cloud would ever fail. In summary, the benefits of the public cloud are:

  • Pay-as-you-go scalability
  • Cost effectiveness
  • Increased reliability

Disadvantages of the public cloud

There are, of course, downsides to using public cloud services. At the top of the list is the fact that the security of data held within a public cloud is a cause for concern. It is often seen as an advantage that the public cloud has no geographical restrictions, making access easy from wherever you are. But on the flip side, this could mean that your server is in a different country which is governed by an entirely different set of security and/or privacy regulations.

As mentioned above, you can scale up with a public cloud, but you can also run into surprise costs if you need to move large amounts of data in, out, or even within the public cloud.

Performance can be an issue, too. Your data transmission might be affected by spikes in use across the internet. If application performance is a deal breaker for you, then you may be forced to go with a private cloud.

Benefits of a private cloud

The private cloud allows you nearly all the same benefits of the public cloud, but more so. 

Most notably, the private cloud can provide a greater level of security, making it ideal for larger businesses, or businesses that handle HIPAA or financial data. With a private cloud, this can be achieved while still allowing the organization to benefit from cloud computing.

Private cloud services offer additional benefits for business users, including more control over the server. This allows it to be tailored to your own preferences and in-house styles. While this can remove some of the scalability options, private cloud providers often offer what is known as "cloud bursting" (aka hybrid clouds)—when non-sensitive data is switched to a public cloud to free up private cloud space in the event of a significant spike in demand. In summary, the main benefits of the private cloud are:

  • Improved security
  • Greater control over the server
  • Flexibility in the form of cloud bursting

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Disadvantages of a private cloud

The downsides of private cloud services include a higher initial outlay, although in the long term many business owners find that this balances out and actually becomes more cost-effective than public cloud use. It is also more difficult to access the data held in a private cloud from remote locations due to the increased security measures. 

Cloud computing conclusion

Both public and private cloud services provide a wide variety of benefits to your business: better access to data, connecting to cloud-based applications and solutions, increased flexibility for remote employees, and so much more. In the end, most often the deciding factor boils down to budget. And as your budget grows, so will your use of the cloud. The question, though, won’t be whether or not to use the cloud; rather, which is right for you right now. 

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