Still in its infancy, cloud computing is currently utilized by about 2 percent of small businesses, while almost 40 percent want to learn more about it.  So, what is cloud computing?

Cloud computing is the maintenance of data and applications in the cloud rather than on a user’s local machine.  Have you ever used Gmail or iTunes? Have you used Amazon or provided info to banks and other companies online? If so, you most likely have info “in the cloud.”

Although people’s definitions may vary, basically, the cloud is the Internet. By using Gmail, iTunes or Amazon.com, your info is most likely sitting on a server, somewhere. This means you’re already utilizing cloud computing. You are accessing and utilizing computing resources via the Internet, or cloud.

Advantages

Below are three primary reasons businesses are increasingly utilizing cloud computing:

1. Scalability- using cloud computing, a business can grow or shrink to match server demand without having to purchase additional physical resources to store and maintain in-house.

2. Instant- cloud computing provides instant availability in terms of resources. If you are running a social networking website and need additional resources, the resources can be accessed and made available to you instantly.

3. Cost effective- using cloud computing, businesses strictly pay for required resources, without having to purchase, setup and maintain equipment.

In addition to the above, cloud computing allows travelers, telecommuters and employees access to a company network, from most any location throughout the world.

Disadvantages

Cloud computing relies on Internet connectivity.  Without connectivity, users cannot access their data and applications.  Surely, we’ve all experienced Internet outages at home and at the office. It happens, and it happens in the world of cloud computing, as well. It seems most service providers guarantee an uptime of 99% or greater. This may sound assuring, however, it takes only a few short minutes of not being able to access data and applications to send a business owner reeling. Regardless, services in the cloud are considered to be more reliable than those found in small businesses, according to Steve Hilton, an analyst at Analysys Mason Ltd.  Small businesses save time and money in not having to purchase and maintain software and equipment in the office.

How small businesses are utilizing cloud computing

1. Using webmail such as Gmail, a business owner can access e-mail from anywhere in the world via an Internet connection. Google, the Gmail provider, is responsible for the server, its disk space and its processing power. Users don’t have to worry about maintaining web clients or in-house e-mail servers.

2. QuickBooks Online is a web-based bookkeeping and accounting system whereby a user’s accounting data is stored on Intuit’s servers. Users don’t have to worry about backing up data since it is stored securely, off-site, in the cloud. However, if Intuit experiences server issues, users may not be able to access their QuickBooks files, online.  This happens from time-to-time.  Utilizing cloud computing involves making a conscious decision to give up a level of control over access to services and data.  If Intuit experiences server issues and a user cannot access a data file, the user is basically helpless until Intuit fixes the problem.

3. Using a cloud file server such as box.net allows business owners the ability to access and manage files from any location via an Internet connection. From sensitive financial data to video files, business owners can safely store files, off-site, without the hassle of maintaining in-house servers or having to regularly backup data.