Consider the downsides before moving to the cloud

Turning to Internet services instead of in-house servers appeals to companies seeking lean, mobile operations. The "cloud" is a hot buzzword, but moving the bulk of your infrastructure and data there isn't right for every business. Most small companies plug along with a mix of on-site and off-site hardware and software. For some organisations, maintaining in-house servers is crucial.

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Turning to Internet services instead of in-house servers appeals to companies seeking lean, mobile operations. The "cloud" is a hot buzzword, but moving the bulk of your infrastructure and data there isn't right for every business. Most small companies plug along with a mix of on-site and off-site hardware and software. For some organisations, maintaining in-house servers is crucial.

Nearly 7 percent of businesses with less than 100 employees use a cloud solution, according to IDC Research. And another 6 percent plan to add a cloud service in the next year. Those numbers nearly double among midsize companies.

Sure, it may make sense to use web applications, such as Google Apps or Office 365, for online productivity and collaboration. And why not trust a cloud provider to host a modest website? But ditching critical local applications and servers is downright foolish if you don't plan carefully.

Case in point: The outage of Amazon's EC2 web services in April stopped some of its small business customers dead in their tracks, and caused others to reconsider shifting their nuts-and-bolts operations to the Internet.

Here's why you should pause before tearing up your server closet.

1. The cloud doesn't always save money

One appeal to cloud services is that a monthly fee generally takes care of everything. And they enable startups to get off the ground quickly. But if you have an existing stable of servers, no matter how hiccup-prone they may be, think twice before dumping them all.

Throwing away hardware also means tossing your investments in it. Instead, you may be able to make nips and tucks that reap more from existing technology and you can still lean on a combination of on-site and cloud services.

"The only thing a small business should rip and replace is carpet," says Michael Dortch, contributing editor of the Focus.com business network.

Another advantage of cloud services is that a third party does the back-end work to meet the needs of a growing company. Yet on-site infrastructure can grow with you, too. If you purchase servers wisely, they won't necessarily become obsolete as business expands.

Blade servers, for example, let you expand bit by modular bit. And virtualisation can help you do more with less hardware, even if that means needing one new, beefy server to replace several older ones. Energy-efficient equipment paired with virtualisation can keep down electricity bills.

2. Moving to the cloud takes your data out of your hands

Almost every business needs to store shared files securely. Why stash your precious data offsite? Sure, cloud providers promise strict security. But hackers love to target systems billed as bulletproof, and sometimes they succeed.

A large Internet company may have more cash and sophistication than your storefront shop to lock down data in far-flung locations. But when it comes down to it, the only way to know exactly where your data lives is to manage it yourself. That's also vital if you provide medical, legal or financial services that must comply with data protection laws.

3. When the Internet is down, so is your cloud-dependent business

Moving critical operations online makes connectivity critical. For the Grand Opera House (see case study on next page), a cloud migration was out of the question. It already suffered frequent network and Internet outages. But with ticketing software running on Windows servers, customers nevertheless could call the box office and purchase seats even if the web ordering system crashed. If that system lived strictly in the cloud, however, staff simply couldn't process orders during a connectivity hiccup.

With all of the above said, moving infrastructure to the Internet is right for some companies, especially those starting from scratch. If you go that route, however, you must back up data and provide redundant local systems for critical applications and services, should an Internet outage strike. That, however, is a story for another column.

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