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Five Things to Consider Before Embracing the Cloud

In theory, the cloud is great. It simplifies actions, such as billing. It lets businesses reduce their information technology costs. And it claims to be infinitely scalable.

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In the real world, though, it doesn't always work as well as advertised. Several major sites — including Reddit, Foursquare and Common Sense Media — found that out last month when Amazon's East Coast cloud servers suffered what the company called "performance issues."

Determining whether your company should shift to cloud-based resources comes down to a variety of factors and comfort levels, but before you make the jump, here are five things you'll need to keep in mind.

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Outages – The Amazon hiccups were hardly an isolated case, and they clearly demonstrated the dangers of relying completely on a single source to handle your web traffic. But the cloud is not limited to web hosting, of course. Many businesses use it as a storage method for critical files or software used on a day-to-day basis.

That means an Internet disruption on the client's end can be just as disruptive as a problem with the cloud. Outages can stop you from accessing critical data — and they always seem to happen at the worst possible time. The best protection is keeping a local backup copy of important files.

Privacy and Security – It's widely accepted that employers have the right to monitor employee email on their servers. But when those servers are virtual, employee privacy issues become a lot less clear. And differing court rulings on the matter further complicate things.

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In 2010, the New Jersey Supreme Court ruled that employees have a reasonable expectation of privacy on company computer if they used a cloud-based email program with password protection. The following year, however, a California court ruled otherwise.

"Companies would argue the fact that you're at work, but the other argument would be 'well, no, the expectation is higher on the cloud, since the company doesn't have free access to it,'" said Curtis Smolar, a partner at the Fox Rothschild law firm in San Francisco. "The most important thing for a company is to make sure there is a very clear employee manual outlining what expectation of privacy the employee has in regards to company email."

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Speed – While many cloud companies may boast about their benchmark speeds, those claims don't guarantee your site (or access to your files) will be speedy. Performance can vary wildly depending on whether your company's cloud stores your company's data on physical or virtual machines and (if virtual) how many other companies share the physical device it's stored on.

"Benchmarks that cloud providers give you can be deceptive," said Paul Schmidt, founder and president of Photodex. "With some of the hosting companies, if you know a good network admin who knows how to do benchmarks and does them, you'll find that a lot of cloud systems are really slow where it matters."

A dedicated physical machine will always be faster — though it might cost a bit more.

Cost - In general, cloud servers can save a company money, especially when there are short-term bursts of online popularity, since the cloud will scale to handle the traffic surge and the company won't have to worry about purchasing and installing new servers. Even better, it's done automatically.

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The downside of that scaling is many business owners fail to track it — and hackers can easily cause your bills to spike without your knowing it. Something as basic as a DDoS (Distributed Denial of Service) attack may not take your site down, but it does keep servers busy, which causes bills to soar, since costs are typically tied to usage.

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"Think of it as a utility," said Bruce MacFadyen, COO of FireHost. "Customers pay for a certain amount of space and storage — but if they have additional processor usage, they do (pay more). They typically can scale back down. … (One provider, however) allowed clients to scale up, but once you had scaled up, you couldn't scale back down. That's not the promise of the cloud. You should have an environment that lets you scale up and down."

Moves – Every company switches vendors from time to time. But the more data you've got in the cloud, the more complicated that becomes.

Whether you're changing cloud providers or simply platforms (such as a move from PC to Mac), that transfer can consume bandwidth (potentially running up your bill) and, depending on how much you have stored in the cloud, can be extremely time consuming.

"It's very affordable to put things in a cloud storage facility, but if you want to move, it's very expensive," said Schmidt. "It's essentially holding your data hostage. Once you've got 20 TB of stuff on someone's machine, it can get very expensive. When you have a lot of data on one hosting service and elect to move it to another one, sometimes it might be worth flying someone to the data center to fill up a bunch of hard drives and fly them to the new one. That's the kind of [contortion] that sometimes happens when you make a change."

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