By now you probably know that the cloud isn’t some mysterious, nebulous concept but simply a term to describe Internet-based storage and processors. It’s basically another term for the Web. As business is increasingly done anywhere but the office, more entrepreneurs are turning to the cloud as a key resource. But as you transition your business to the cloud, you should know the five misconceptions about cloud computing that can end up costing you a lot of extra money unnecessarily.
1. Thinking the cloud is free.
It’s essential that you realize you’re actually going to pay more in some cases for data storage in the cloud compared to storage on hardware. For example, if you need roughly one terabyte (TB) of storage, Google can provide you 1TB of cloud storage for $50/month, while a 1TB external storage drive costs $70. What’s key is to look at the lifetime expense of storing that data. Google’s cloud-based storage will cost you $3,000 over the course of five years, while buying a second storage drive as a backup will cost you a total of only $140 for that same five-year period. That’s not to say, of course, that it's not worth every penny of that $3,000 for cloud storage—you do get enormous flexibility in terms of where and when you can access your data, while an external storage drive is accessible only to the computer it’s plugged into. You just need to make sure that you accurately assess the costs before you take the plunge.
2. Not preparing for more than storage.
Regardless of your business model, you’re likely to need more from the cloud than just storage. You might need credit card processing. That costs extra. You might need automatic backups of your data—more money. You might want processing—reports and summaries of the information that you’re storing on the cloud. Again, another fee. Every additional service you’ll require will add to your overall costs.
3. Thinking that the cloud is just one space.
In fact, there are many clouds, and you may be working in several of them all at once. If you use QuickBooks online, that’s the cloud. If Nextiva is your phone and fax system, that’s the cloud. They’re both cloud-based, but they’re two separate clouds! Each has a separate cost, and they aren’t made to work together. If you discover that you need to send a report created in QuickBooks, you’re likely to need a workaround to send it via Nextiva. Those systems don’t work together; they work alongside one another. Integrating cloud-based systems can be difficult, time consuming and expensive.
4. Assuming that your apps will run on the cloud.
If you’re in love with your desktop accounting program, you may be heartbroken when you discover that it’s not cloud compatible. Lots of programs you use every day may have completely different versions for the desktop and for the cloud. It isn't always easy to make that transition, especially for custom programs. Even a program like Microsoft Office has a desktop version and a cloud version, so you need to be prepared to make some changes. There are some fixes out there—PC Anywhere is a remote access software solution that can help with navigating local and cloud programs, and My Cloud Anywhere can help with converting apps and programs as well.
5. Getting locked in.
Amazon has a powerful and flexible cloud offering, but there is proprietary coding for certain functions, which means that it’s not easy to share information with other systems and programs. Google Docs is the same way. You may create an amazing slideshow in Google Docs only to find out that there are significant formatting problems when you try to open it in Microsoft PowerPoint. The more customized your cloud-based service, the more locked in you are to that proprietary system. Ideally, you’d develop your business solution as agnostically as possible, minimizing your exclusive reliance on any one system. If you find the perfect solution for you business, though, and you decide to work exclusively with Amazon, for instance, you at the very least need to recognize the challenges you may face in sharing information among other systems.
It may sound as though I’m down on the cloud, when that couldn’t be further from the truth. I was an early adopter and the cloud lets me do business efficiently and effectively from anywhere on the planet that has Wi-Fi. It’s because of my cloud experience, though, that I know where the potential hidden costs exist. In most cases, the cloud is worth the price of admission, but it’s always useful to know the costs ahead of time.
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