The Pros and Cons of Cloud Computing

(page 2 of 2)

"Cloud is a very safe way of operating today, and it's going to get better and better," Barr says.

On the other hand, the idea that extremely sensitive data, perhaps including trade secrets or confidential legal documents, is not locked up on company premises but is hovering somewhere in a cloud disconcerts some business owners. "You are trusting your entire business operation to someone else that you think is doing a good job of backing up your data and making sure it's secure and available," Greenbaum says. "I understand why people are leery about putting critical, confidential, and proprietary business information online."

Keeping Data Safe

While anonymous computer hackers are very unlikely to gain access to your business information in the cloud, a disgruntled former employee familiar with your company might be able to guess your passwords or answer your security questions and get into your accounts to do mischief—or worse.

Also, there have been a couple of highly publicized incidents recently where online services lost supposedly secure data or went offline for some period of time, during which their customers' accounts were inaccessible. "If you use Google docs and you couldn't get into it when you had a meeting or a deadline coming up, you'd be in big trouble," Greenbaum notes.

The key to using cloud hosting safely is finding a responsible provider that provides back-up programs so your online data can also be stored in-house, both Barr and Greenbaum say. "Do it on a regular schedule—it doesn't have to be daily or weekly—and if the Web site goes down, you've got a copy of your data on your local hard drive," Greenbaum says.

Yaron Sinai, CEO of cloud services provider Elementool, recommends that entrepreneurs choose established providers, talk to their existing customers, and opt in to automated local back-up. Ask what kind of redundancy the company has built in to deal with a server that crashes or a power outage. "Make sure the cloud provider has their own servers, not shared servers with other companies," Sinai says. You can ask whether the provider undergoes third-party monitoring by security standards firms that inspect providers' systems periodically for vulnerability to data breaches.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

Business Exchange

Track and share business topics across the Web.