Is cloud computing the best way for small businesses to store their data?

There’s a lot of hype these days about the benefits of cloud computing, or going virtual, and how it will be the next big thing. Yes, it’s true that by hosting your data in a supposedly impregnable data center (“the cloud’), service providers can eliminate the need for individual personal computers as well as the hardware and software necessary to connect them to a network. It’s also true that you’ll never again need to pay for expensive software upgrades because the service provides them automatically. Best of all, small businesses with fewer than ten employees have been able to access services such as Google Docs and Spreadsheets for free simply by creating a Google account. However, before you decide to make the cloud your primary data storage center, there are some hazards that you need to be aware of.

First of all, your data is not necessarily as secure as service providers want you to believe it is. For example, Amazon, the world’s largest provider of cloud computing services, suffered a two hour service outage on October 22, 2012, taking some popular websites such as Foursquare and Turntable.fm among others down with it. Nor was this the first occurrence. Last March, Netflix, Instagram, and Pinterest all went down after a storm killed power at an Amazon data center, backup generators failed and attempts to shift data to another center were unsuccessful. Any data uploaded by small businesses during these outages and not backed up on hard drives was permanently and irretrievably lost.

Also, use of Google Apps by small businesses may no longer be free. Google recently announced that although current customers with fewer than 10 employees can continue to use Google Docs and Spreadsheets for free, the company is not currently accepting new users and the paid version, which includes only these two applications, will cost $50 annually per user.

For these and other reasons, small business owners should think long and hard about moving their data to the cloud. Although cloud-based backup services such as Carbonite, for example, can be a valuable resource, both they and cloud service providers such as CloudConnect.net are vulnerable to the same data losses as their larger competitors such as Amazon. This is not to say, however, that there is no danger in maintaining a traditional onsite network.

A 2012 Verizon survey of business data breaches, found that restaurants accounted for most of the incidents. More than half, or 54 percent, of the 855 security breaches surveyed by the telecommunications giant took place at food services and accommodation businesses, with the overwhelming majority at restaurants.

Another 20 percent of breaches hit retail businesses, the report found. Although many of these involved the theft of patrons’ credit information, a significant number resulted in the loss of critical data.

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