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Cloud Computing and its Risks

Cloud computing is beneficial to large and small business enterprises who want to revolutionize

their IT infrastructures. The business enterprises must understand that there are certain risk

factors associated with cloud computing. For instance, recently, there was an outage of

Amazon.com and the site collapsed for nearly 24 hours taking with it all its customers including

a few small businesses. This shows that cloud computing is not fully risk free. Therefore, if you

are running your small business on cloud computing and if the nature of your business is such

that an outage cannot be tolerated, then it is imperative that you come with an alternative plan.

To mitigate the risks associated with cloud computing, fine comb through the terms and

conditions before signing the contract provided by your SaaS Provider. Though cloud

computing does not provide a safe haven, we cannot ignore its advantages. Therefore it is wise

to take the following precautions before selecting a SaaS vendor.

Check out the Authenticity of the Cloud Service Vendor – Before approaching a SaaS

vendor, get a third party to check out the outages and downtime of the service provider. Also

ensure that their services suit your business needs. You can also ask the provider whether they

will make a contractual commitment to store and process data to a specific jurisdiction.

Data Security – Remember that, as a small business owner, you are responsible for the

security and integrity of your data. When sensitive data is processed outside your premises,

there is risk involved. Therefore, it is imperative that you ask your SaaS provider the

information regarding the administrators who handle your data. The service providers must be

willing to be subjected to regulatory compliance certifications. If they are not ready for external

audits, then it is wise to avoid such SaaS providers.

Segregation of Data – In cloud computing your data is stored along with the data of other

customers. The data is in an encrypted form and encryption accidents can deliver the data to be

unusable. Therefore, ask the service provider about the schemes and designs undertaken for

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data segregation. Also find out whether the data segregation schemes are tested by

professionals.

Data Recovery – It is a fact that you may not know where your data is located. Ensure that

your provider has the provisions to restore your data and applications in time in case of a

disaster.

Long-term Viability – This is an important question to ask your SaaS provider. In case his/her

company faces a problem, how you would get your data? Would the data be in a format that

could be easily imported into a replacement application?

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The SaaS service providers generally try to shift the risks to their customers. Therefore, small

business enterprises must read the terms and conditions carefully before signing the contract.

However, every state in the U.S. has laws to protect the affected small businesses in the event

of a security breach. Industries such as healthcare, telecommunications and finance are

subjected to additional regulatory laws. Remember that cloud computing is here to stay. Make

use of its advantages and at the same time be aware of its risks.

Maya Pillai is passionate about helping small businesses and professionals. She is a blogger for

Apptivo's Small Business University.