What is Cloud Computing? The Ultimate Small Business Guide

Tom Grange
By Tom Grange, Director - Connectivity Business

If you’re a small business just trying to get by, you most likely don’t have the resources for a full-blown physical system where you can store all your data — and you don’t really need one if you decide to go digital, this is where the cloud comes in.

Cloud computing isn’t a trend - it’s becoming a key part of how businesses operate, offering flexibility and efficiency that traditional IT systems simply just can’t match. 

But a third of small and medium-sized businesses say that they do not use the cloud at all — are you one of them?

In this guide, we’ll walk you through the basics of cloud computing and how you can choose the right cloud service for your business. 

Blue cloud computing diagram with circuit board lines

30 second summary:

    • Cloud computing is key for small businesses, and provides efficient, flexible solutions. Despite its importance, one-third of small businesses haven't integrated the cloud into their business operations.
    • The cloud is an internet-based delivery of computing services. It helps businesses access files, and applications remotely but also stores business data, helping with collaboration. It also provides a secure backup of information and safeguards against data loss, ensuring quick recovery.
    • There are various cloud models and services and the best option is unique to each business. A cloud system often helps reduce business costs, improve collaboration, keep systems up to date, is scalable and offers reduced carbon footprint.
    • But with anything digital, there are some risks of using cloud computing including cyber threats, data loss, bandwidth limits and potential outages.
    • Bionic can help advise on the right cloud services for your business operations, including VoIP packages.

What is cloud computing?

Cloud computing — also called ‘the cloud’ — refers to the delivery of computing services where we use the internet to access and use software, store data and much more.  

Instead of storing files on a personal computer or server in your home or office, cloud computing allows you to access those files and applications over the internet, just as if they were on your own computer. It's like having a powerful tool that you can access from anywhere, anytime, without needing to carry it around!

What is cloud computing used for?

Cloud computing offers a variety of services, each tailored to meet the different needs of your business. However, some of its most popular include:

Cloud storage

  • Personal use — Individuals use cloud storage for saving photos, documents, music, and videos. Services like Google Drive, iCloud, and Dropbox allow users to store their personal files securely online and access them from any internet-connected device.
  • Business use — Businesses utilise cloud storage to store large amounts of data, including customer information, transaction records, and work documents. It allows for easy sharing and collaboration among employees, no matter the location, so it’s great for remote workers

Cloud backup services

  • Data protection — Cloud backup services provide a way to copy and store important data offsite. This is key for protecting against data loss due to hardware failures, cyber-attacks, natural disasters or even global pandemics.
  • Recovery — In case of data loss, cloud backup enables quick restoration of lost files, so there’s minimal disruption to your business operations.

Cloud hosting

  • Websites and applications — Cloud hosting is widely used for hosting websites and web applications. Unlike traditional hosting — which involves hosting a website on a single server — cloud hosting can easily handle sudden spikes in traffic by scaling resources up or down as needed.
  • Global reach — Cloud hosting services often have data centres worldwide, ensuring faster loading times for websites and applications for users irrespective of their geographical location.

What are the different types of cloud services?

When it comes to cloud services, they’re usually offered in three main models, each with its own unique features and benefits to support your business.

Infrastructure as a Service (IaaS)

With Infrastructure-as-a-Service (IaaS), businesses rent the servers and storage options they need from a cloud provider. They then use that cloud infrastructure to build their own applications. 

In IaaS, you can access virtual servers, storage, and networking resources. You have the freedom to install your operating systems and software, but you don't have to worry about managing the physical hardware. It's ideal for businesses that want control over their infrastructure but don't want the hassle of maintaining physical servers. 

This model is seen with brands like Amazon Web Services (AWS) and Google Compute Engine. 

Platform as a Service (PaaS)

Platform-as-a-Service (PaaS) takes things one step further. Companies don’t pay for hosted applications; instead, they’ll pay for what they need to build their own applications. 

This service model provides a platform for businesses to develop, run, and manage applications over the Internet. Think of it as renting all the tools and equipment you’d need to build a house. 

It's great for developers who want to focus on their software or app development without worrying about the underlying infrastructure.

The PaaS model is seen with brands like Heroku, Google App Engine and Microsoft Azure’s App Services. 

Software as a Service (SaaS)

Think of Software-as-a-Service like renting a fully furnished house. You get to use SaaS hosted in the cloud without worrying about maintenance costs or updates. 

This model is all about providing software applications over the internet, so users can access and use these applications via a web browser without needing to install any systems or software on their devices. 

It’s perfect for businesses who want ready-to-use solutions, with examples including Google Workspace, Salesforce and Microsoft 365. 

How does the cloud differ from traditional on-premises computing?

When we compare cloud computing to traditional on-premises computing, there are some clear and interesting differences. With cloud computing, your computing resources — like storage and servers — are hosted off-site, usually by a service provider. This setup allows businesses to access data and applications from anywhere, as long as there's an internet connection. 

On the other hand, traditional on-premises computing involves having all your computing hardware and software right within your company's physical location. While this can give you complete control, it also means that you’re in charge of all maintenance and upgrades that are needed. 

One of the biggest perks of cloud computing is its cost model. You normally pay per user on the cloud and for the features you want to use - which can be a better budget-friendly option, particularly for small businesses that might just be trying to find their feet. 

For example, imagine you run a mechanics business, and you have two locations. In this case, it might make sense to have a VoIP phone system that uses a web phone app to store all your contacts - like customers and suppliers - on a cloud system. This means that your employees will be able to access all stored phone numbers and contact information and make calls more efficiently. This upgrade could speed up your business operations better than if you were using a traditional phone system with a black book of supplier and customer information.

How do cloud services store data?

In contrast to the different service models, there are also different methods of servers which centre on where they are and who manages them.

  • Private cloud — A private cloud involves a cloud infrastructure dedicated to a single organisation. This can either be hosted on the company's premises or at an off-premises data centre. The defining feature of a private cloud is that it offers greater control and privacy, and all of the resources are exclusively used by just one company. It’s also favoured by businesses that have stringent data security and compliance requirements or those that need bespoke solutions. 
  • Public cloud — A public cloud is a service run by an external provider. Here, they have the infrastructure equipped with servers and storage hardware, ensuring all data is secure and they can manage all resources necessary over the internet. The public cloud model is known for its scalability, high availability and flexibility in terms of payment, with users typically only paying for what they use. 
  • Hybrid cloud — As the name suggests, a hybrid cloud is a blend of both private and public clouds. This model offers the best of both worlds: the flexibility and scalability of the public cloud alongside the control and security of a private cloud. Businesses often opt for a hybrid cloud to keep sensitive or critical workloads on their private cloud whilst leveraging the public cloud for less critical data. 

What are the benefits of using the cloud for businesses?

Cloud computing is a real game-changer for businesses, bringing along a host of benefits that make a big difference in how companies operate. 

  • Reduce business costs — Using the cloud is a great way for businesses to cut down costs. Think of it this way — instead of spending a hefty amount on buying and maintaining your own IT gear and software, you can use the cloud. This not only saves on the cost of the equipment itself but also the space to keep it and the people to look after it.
  • Enhanced collaboration — Cloud services make collaboration easier and more efficient. Team members can access, edit and share documents anytime, from anywhere, as long as they have internet access. So, even when you’re not in the same place, it can feel like everyone is in the same room!
  • Automatic updates — With cloud services, businesses don’t have to worry about keeping digital systems up-to-date; the cloud provider takes care of that. This means that businesses will always have the latest and safest version of software without the hassle of managing these updates yourself.
  • Scalability — This is another big win for businesses. Cloud computing grows with your company, so if you need more resources - like additional conference phones - it’s easy to scale up. And if you need less, you can scale down just as easily. This flexibility is perfect for businesses that have fluctuating needs or are in a growth phase. 
  • Reduce environmental impact — By using cloud computing, businesses can actually help reduce their carbon footprint. Cloud data centres are generally more efficient and use less energy than traditional ones. So, by going cloud, businesses are not just being smart; they’re also being kind to the planet.

What are the risks associated with the cloud?

While cloud computing brings a host of benefits, it's also wise to be aware of some risks that come along with it. Understanding these helps businesses to prepare and protect themselves better from any potential threats or dangers. 

  • Data security and privacy concerns — When you store data in the cloud, you’re essentially entrusting someone else with your business's valuable information. Ensuring that this information is kept safe and private is crucial, especially when it comes to sensitive personal or business data. Cloud providers usually have strong security measures, but it's always good to be cautious and understand the specifics of how your data is protected.
  • Cyber threats — Just like a house can be a target for burglars, cloud services can be a target for cyber-attacks. Hackers are always looking for ways to breach security measures, and while cloud providers invest heavily in security, the risk can’t be fully eliminated. Because of this, businesses should have security measures in place should a hacker manage to breach the walls.  Read more about common cyber threats like DDoS attacks and ransomware attacks.
  • Data loss — Data loss can be a big concern for businesses. Think of it like this: you store all your important documents in a safe, but then the safe is lost or damaged, meaning everything is lost. Similarly, various factors can lead to data loss in the cloud, such as accidental deletion or a malicious attack. Regular backups and disaster recovery plans are essential to help reduce that risk.
  • Bandwidth limits — Bandwidth refers to the volume of information that can be sent from one connection to another. If you have limited bandwidth, it can slow down access to your data, especially if you’re dealing with large amounts. Understanding bandwidth allowances and how they align with your business needs is important to ensure smooth cloud operations. Find out more about bandwidth and what it means for business with our guide.
  • Service outages and downtime — Even the best cloud services can face interruptions due to technical glitches or power outages. These outages can impact access to your data and applications because you won’t be able to access them at all — which can really disrupt how you run your business. Choosing providers with strong track records of reliability and having a contingency plan in place for these scenarios is crucial. At Bionic we only work with a trusted panel of of providers who offer reliable services that meet the bespoke connectivity needs of all types of businesses.

How to choose the right cloud service for your business

When choosing the right cloud service for your business, there are a few things you’ll need to consider. 

Assess your business needs

Start by understanding what you need the cloud service for. Are you looking for a place to store large amounts of data, host your website, run applications, or something else? 

Think about your specific goals, such as improving collaboration, enhancing data security, or scaling operations. This will help shape exactly what your business needs. 

Consider the security and compliance you need

This is crucial, especially if you handle sensitive data. Check the security each cloud provider offers and decide if you're happy with the current measures in place to protect your data. But remember, it's not only down to your supplier to protect your sensitive information, it's also your responsibility. Make sure to provide training to your employees on how to use the cloud safely, ensuring business activities comply with GDPR, for example. 

Most businesses — large or small — will need to comply with GDPR regulations. Since it came into force in May 2018, it’s been key in changing the way businesses interact with their customers. 

Decide on a package

The pricing models of cloud services can vary significantly depending on different packages, and understanding these is crucial for making a cost-effective choice. Some providers offer a flat-rate model, which can be simpler but might include paying for unused resources. 

On the other hand, pay-as-you-go models, based on actual usage, can be more economical, especially for businesses with fluctuating needs. It's important to analyse how these models fit into your budget and operational requirements. 

Get your business set with Bionic

The digital switchover is soon approaching, which means landlines will be switched off. To get ahead of the game, it's worth moving all your business communications onto the cloud now. 

Get in touch with our team here at Bionic, who can help advise on business connectivity, including broadband and digital VoIP services.