As technology continues to evolve on what seems like a daily basis, many companies persistently seek ways to improve their businesses in the most efficient and effective means possible. For some, this means transitioning to “the cloud.”
The cloud is actually a physical infrastructure, not simply a storage place of information that floats in the air. This network of servers houses software and services that run in an outsourced data center, rather than in your own data center. Cloud services are accessible through Web browsers and allow for the convenience of being able to access your data on any device connected to the Internet.
A company can reap many benefits from using the cloud to help with its technological needs.
Reduce costs — Employing the cloud at your office can lower a variety of expenses that would normally be spent to operate without it. For starters, cloud computing reduces electrical expense because you are hosting fewer servers, so the power and air conditioning needs are reduced. Additionally, you can reduce personnel costs because you do not have to administer and maintain the applications that are not hosted in the cloud. You also save by having a shared infrastructure that allows you only to purchase what you need and you avoid the major capital expenditures used to purchase more than what you need to ensure that you have room for future growth.
Updated system — Maintaining your own infrastructure potentially requires additional costs for vendor resources for upgrades and internal personnel to apply server patches, which are required to fix bugs and correct security vulnerabilities. The cloud vendor makes all of the required updates, reducing the need for your internal personnel to be involved, though you will still need to ensure that the upgrades do not negatively impact internal applications or existing data transfers.
Data security — Large companies typically invest a large amount of money to protect their information, and the cloud potentially offers a more secure basis for small businesses that may not be able to afford information security personnel. Though there is no absolute protection from all possible attacks, the cloud also decreases the likelihood of an outage resulting in complete data loss is very unlikely or the loss of availability or access to your data.
Business growth — Because of the money and time saved by using the cloud, your business has more opportunity for increasing its revenue and better serving its customers. With the cloud, you only pay for what you use when you need it, so a project that requires new servers and may take weeks and months to purchase and implement can often be accomplished in hours and days through the use of the cloud.
Though the cloud certainly helps companies to thrive and employ efficient practices in a variety of ways, it’s important to understand the concerns that come along with so much data being stored in a shared location that isn’t actually in a place that’s physically tangible to you.
Abuse of services — With easy accessibility, individuals are able to load content they shouldn’t when logging in from unsecured locations, which can lead to potential viruses and network attacks. Though the cloud provides security, it’s still up to the business employing it to prevent such breaches as unauthorized access and to create appropriate protocols for disaster recovery, password management, etc.
Becoming an unintended victim — Because of the shared infrastructure, cloud users run the risk of becoming the victims of breaches that weren’t intended for them. If an attack is meant for another cloud user, that person’s or company’s problem could become your problem, as well, because your data is shared on the same hardware.
Contractual relationships — Though you sign a contract with your cloud provider, you are still responsible for your data and must meet the security requirements required by law. You’ll also need to ensure that you don’t have any contractual breaches with your customers or business partners by using the cloud, as your allowing a third party to treat a technical issue could violate your contract agreement pertaining to who has access to what information.
Dependency on one source — Because you are relying on one source to secure and contain all of your company’s data, it’s essential to have the proper user access system to specify what individuals have access and what exactly they have access to. Also, be aware that your business is dependent on the reliability of your Internet connection when you’re using the cloud, so if your Internet service experiences an outage, you might find yourself with quite a bit of downtime until it’s back up and running again.
Transitioning your business to the cloud can be an advantageous solution, though, like with anything in life, it’s important to weigh the risks and rewards. The good news is that, if you are interested in cloud computing, you don’t have to jump completely in — you can start slowly by opting to use it in place of only a handful of applications and make a decision on whether or not to transition completely after you’ve gained more experience and understanding of using such a system.
Greg Wilson is head of information security at 1st Global. Greg works to ensure 1st Global affiliate advisors, staff and systems are abiding by and adopting best practices in order to keep information secure.
1st Global Capital Corp. is a member of FINRA and SIPC and is headquartered at 12750 Merit Dr., Ste. 1200 in Dallas, Texas 75251; 214-294-5000. Additional information about 1st Global is available at www.1stGlobal.com.