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Is It Finally Time to Move Your Small Business to the Cloud?

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Cloud computing is the hottest trend to hit small businesses since someone's kid told you to get on Twitter. For the most part, the excitement around cloud computing is completely justified. Moving your in-house applications to the cloud -- accessing them over the Internet on a pay-as-you-go basis -- can save time and money, and cut your staffing needs.

Still, your applications are critical to your business, and you should base business technology decisions on more than just excitement. That may sound like obvious advice, but you'd be amazed how many businesses fail to heed it.

So should you move your business apps to the cloud? If so, which ones? When I help my own consulting clients build their business infrastructures, I take them through a five-step process to help them make these decisions. Here's how to walk your business through the same process to get hip to the cloud -- while also staying realistic about its limitations.

Step 1: Does an "All In" Approach Make Sense?

Some businesses are just built for the cloud. Some clearly aren't. Decide which category you fit into by evaluating your staffing and project needs. How much do they fluctuate? If the answer is "a lot," you're either squeezed for resources or wasting time and money on infrastructure you don't need. You're a perfect candidate for pushing (almost) all of your business technology needs into the cloud.

Steve Russell owns iiRE Productions, a design and development firm in Buckeye, Arizona. Due to Russell's highly variable staffing requirements, he decided that anything less than a 100 percent commitment to cloud computing was a waste. "We might scale up to 20 people for a few weeks, then down to three or four, and everyone works remotely on different platforms," Russell said. "Managing setup, troubleshooting, licensing, and infrastructure is a nightmare."

Russell uses free applications like Gmail and Google Docs when it makes sense, and he also uses Basecamp and Zendesk for team management and issue tracking, gaining both economy and flexibility. "They save a ton of time, and I can pass through infrastructure costs for each team member on a monthly basis to the client," he stated. "No one has ever complained about the bill."

Russell said his all-in approach to cloud computing saves him tens of thousands of dollars per year; it dramatically cuts his software licensing and hardware costs, while increasing his productivity. He has also been able to bid on projects that would have had a prohibitive cost of entry if his firm had to shoulder the cost and burden of traditional IT tasks.

If Russell's situation sounds a lot like yours, skip to Step 4 below. Otherwise, let's continue to the next step.

Step 2: Focus on the Cloud Computing "Gimmes"

OK, you're still reading, so no cannonball into the pool for you. But you can still dip a toe into the water. There are a few painless, reliable cloud applications with almost no downside for the vast majority of small businesses.

The first of these "gimmes" is email. There's a good reason why: The biggest worry about cloud apps is that you can't access them when your network goes down. Email is mostly useless without a network connection anyway, so what do you have to lose?

Besides, no one wants to manage email servers -- not even companies that provide them. Dump the headache and look at free email providers like Gmail. You can keep your custom domain, add and remove users through simple browser-based tools, and never have to play at tech support. (If Gmail goes down, you can bet that Google will have people working on a fix before you know you need one.)

And if you need more storage, advanced spam filters, better security, or more tech support, you can upgrade to a paid Business package for $50 per user per year. That's still a fantastic deal, and it is almost certainly far less than it would cost to run and support in-house email.

The next pieces of low-hanging fruit are office productivity applications. Again, Google is the 800-pound gorilla in the space, particularly if you're already using Gmail. Google Docs is free, and it's compatible enough with Microsoft Office for most tasks. (If you work with complex Excel spreadsheets, your mileage may vary here.) Also, while alternative client-side apps like OpenOffice.org do a decent job of imitating Microsoft Office, Google Docs is actually far superior to any desktop productivity suite when it comes to one very important feature: collaboration. Google Docs is built for real-time, multiuser document editing, making it very useful in team-focused offices where every employee wears several hats.

When you need to share files that Google Docs doesn't handle, or you need to access files when you're offline, you're ready for another one of my favorite cloud computing "gimmes." Dropbox is my go-to choice for syncing files across multiple devices, and if you sign up enough employees and friends, you'll boost your free account from 2GB to 8GB of storage. (Even more storage is available for a monthly fee.) There are plenty of online storage services, but none can match Dropbox in terms of its simplicity and its user-friendly design.

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Step 3: Map the Pain...and the Pushback

You can't do everything at once. Start by itemizing your biggest problems, and set your priorities accordingly.

Nicole Gendron Nordensved, cofounder of Lark Fine Foods in Gloucester, Massachusetts, was losing time and money because her employees lacked file-sharing tools. "When I saw employees emailing files from one laptop to another, I bought a Dropbox account, and it literally saves us hours every day," she said. Nordensved was considering group calendaring and CRM solutions next, but she decided that accounting was an even more pressing headache. "Right now I'm moving five people to QuickBooks Online," she explained. "Once we're done with that, I'll see what makes sense."

Now that you have your battle plan, anticipate bumps in the road. Do your contractors have their own opinions or favorite tools? Include them in the discussion so they're partners in the decision. Do you have Macs in your office? Rule out services that require Internet Explorer, which is available only on Windows PCs. A little planning can smooth out the transition, and minimize lost time and hurt feelings.

Step 4: Look Before You Leap

Even if you answered a resounding "Yes!" during Step 1, you can still be overzealous about cloud computing. Cloud-based apps have tons of advantages, but they have one big downside -- they work over the Internet. Applications like email or word processing send very little data across your connection, so bandwidth is hardly an issue, but other applications -- particularly data backup services -- are quite the opposite. Cloud-based backup is worlds better than no backup at all, and it's a nice complement to in-house backups, but restoring an entire server over a consumer-speed Internet connection could take a very long time. And if your connection goes down, critical information can be inaccessible for hours or even days.

As a general rule, if you absolutely can't afford to go without certain types of data even for a short period (for example, a catalog business with a high volume of phone orders), you should keep your data on-site and supplement with cloud services where appropriate. Likewise, if your business depends on a custom application that a cloud-based provider can't duplicate, think twice before accepting a more generic version in the cloud. Your business needs still come first.

Step 5: Invest When It Makes Sense

I'll leave you with a final word of fiscal wisdom. Even if cloud computing is the best thing that could happen to your business, you may want to delay or spread out your migration process. If you've recently built or licensed software products similar to cloud offerings, then use these rather than throwing away your investment. Cloud computing is usually a budget-friendly alternative to local apps, but it will still be there when you outgrow your current systems. And nothing costs less than money you've already spent.

RELATED: 5 Smart Ways to Use Cloud Computing for Your Business

Profile: Cormac Foster