Pros and cons of “In the cloud” computing

A client wrote me recently asking about a plain English explanation of what the term “in the cloud” is all about and the pros and cons.  They are probably using some services “in the cloud” already and don’t realize it.

Some smaller organizations have another company host their e-mail using hosted Exchange. Some companies outsource their CRM with companies like or

Many companies, large and small, use outsource payroll providers such as , , and

Other examples of cloud computing include patient management and billing for healthcare organizations, document imaging, insurance company systems, accounting systems, and even ERP’s.

To some degree, even home users utilize cloud computing with services like Google Apps and Microsoft Office Live  Sites like can even be considered “cloud computing” because your images are being housed out on the Internet.  Facebook and LinkedIn are “in the cloud” too.

Some companies go to the extreme and put everything in the cloud including their servers, with no local servers of their own, using services such as  In these cases, the company normally pays a monthly subscription fee per user and the hosting company maintains all of their Microsoft operating system and Office licenses for the company.  The outsourced company provides anti-virus, anti-spam, backup services, disaster recovery, e-mail hosting, and technical support for a flat monthly fee per user. This can be really nice—especially for smaller companies.  These services are usually based on Microsoft Terminal Server or Citrix Xen although the customer never needs to realize how the applications are delivered.

A few companies are toying with providing “in the cloud” anti-virus solutions and it will be interesting to see how those work out.

Many people use online backup to store their data in the cloud.

Drawbacks of using “in the cloud” services include:

  • If your Internet connection fails, you cannot use the services.
  • If you have a slow Internet connection, your services may be slow as well.
  • If the “cloud” company goes out of business, you may lose access to your data forever.
  • Security concerns—will the other company keep your data secure?

Advantages of using “in the cloud” services include:

  • You do not need to install patches to the application—your cloud provider does that for you.
  • If there is a disaster at your office, your workers can “work from home” or work on the road almost as easily as if they were “at the office.” This saves you a lot of time.
  • You sometimes need less on-site support and/or may not need to hire more IT professionals in your organization.
  • Providers in the cloud often have highly trained and highly qualified professionals taking care of the network—professionals who would otherwise be very expensive for you to utilize their expertise.
  • Backups are naturally off-site and are often more secure than your own backup solution.
  • Adding new offices, new users, and new applications is generally simplified.
  • If users are on the road and their personal laptop malfunctions, it is often less dangerous for the user to access via a “hotel business center computer” than if they used the hotel computer to connect directly to your internal network.
  • You may not need a server room and, if office space is cramped, that can allow you to have more room for your office personnel.

Also, it is important to mention that some companies elect to use Citrix Xen or Microsoft Terminal Services in their own corporate boundaries to create their own corporate version of a “cloud” and then enjoy some of the “best of both worlds.”


  • Pankaj January 4, 2010 at 5:03 am - Reply

    Great article. Cloud computing is especially beneficial for small companies, which have moderate security needs, and cannot afford in house IT.

  • Catharine Niederer March 19, 2010 at 8:29 am - Reply

    Good Site on Cloud Computing and SaaS – We are periodically looking for good blog information
    related to Cloud Computing. Will be back to review more information on your blog.

    Keep up the good work!


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