The Risks And Benefits Of Cloud Computing

Abby Shagin

Life is easier with your head in the clouds, right?  Perhaps.

But does the same hold true for your company’s data? Are there risks to implementing this progressive solution into your business?  The answer is yes.

Like most things in life, the benefits come with risks—it’s just a matter of knowing if the benefits outweigh the risks and vice versa.

Let’s take a look at some grounded facts about cloud computing to help you decide if you are ready to go up, up, and away.

Risk 1: Network Dependency

Cloud computing is dependent on the internet. The most basic drawback of cloud computing is that you need internet connection to access the cloud and this direct tie to the internet means that this system is prone to outages and service interruptions at any time. This could occur in the middle of a task or transaction, meaning the action could be delayed or lost entirely if time sensitive.

Benefit 1: Flexibility

Network Dependency may mean dependency to the internet, but it means independence from the office. Employees are now more able to access data from servers outside the office and not hard-wired in-house servers—creating a more flexible and mobile work lifestyle for organizations.

Not only does cloud computing provide flexibility for workers, it provides flexibility in implementing   changes and new technologies without high risk and cost. Because organizations aren’t bound to a hard-wired IT infrastructure that cost billions to create in the first place, the have room to experiment and change things with the ability to just as easily revert back to their original system if things do not work out.

Risk 2: Difficulty in creating hybrid systems

This pertains especially to those organizations that hold sensitive information. Organizations like government offices and financial institutions usually have their own IT services and will not take their data offsite despite the benefits of efficiency and performance. There really are no current industry standardized forms that come apply to all systems when it comes to connecting to new cloud systems. With legacy systems, compatibility with a public cloud structure would need some IT magic and some hardware tweaks. And with a legacy system run organization it’s likely they will not part with these tried and systems.

Benefit 2: Cost Reduction and Increased Efficiency

The low barrier of entry and the pay-per-use model offered by cloud computing makes it very versatile. It is scalable for large corporations and affordable for small ones. Since a massive amount of resources is not needed for everyone, they can be leased to other clients, and the cost can be divided among those clients. A cloud provider can offer an infinite amount of resources to many users. Because of reduced cost and time, organizations can focus efforts elsewhere and be more efficient.

Risk 3: Centralization

Organizations usually outsource data and application services to a centralized provider. In cloud computing, we know that network dependency is a drawback due to outages. Centralized data can certainly add another risk to cloud computing: If the provider’s service goes down, all clients are affected.

Benefit 3: Reliability

While internet connectivity and the provider itself being subject to outages is a scary fact of the nature of cloud computing, there is still more reliability in comparison to in-house systems because of the economies of scale. The vendor is more able to give 24/7 technical support and highly trained experienced staff to support the infrastructure at its best condition, and the benefits will reach all their clients. Compare this to each organization having a team of on-site IT people with varied skill set.

Risk 4: Data Integrity/Security

There is already a huge risk with data hosted in-house, so it’s no secret that data offsite sits at even higher risk. With Data offsite, more avenues for attack and the fact that it will be traveling more makes it easier to be intercepted. With technology always improving, there are ways to make sure of better encryption. However with technology always improving, there are always people out there improving their hacking skills.

Benefit  4: Security Gains

Yes, there are security risks with cloud computing. But as mentioned above, the traditional, in-house data storage system comes with risks as well. The gain here lies within smaller, newer companies with low-budget for implementing security systems and less know-how about security technology. The cloud provider already provides the hardware and knowledge for the most current security measures.

It is evident that implementing a new data system comes with serious risks to consider, but it is also clear that the benefits of cloud computing can be factors that help business grow—especially smaller ones.

Like anything it is important to plan implementation properly and consider all areas that will be affected. Vendors can certainly aid in doing this.

For more information, see the full Cloud Tweaks article.

Abby Shagin

About Abby Shagin

Abby Shagin is the Digital Media Specialist for Employee Communications at SAP. Her primary responsibility involves incorporating the use of dynamic media into the initiatives of executive leadership and employee communication channels for SAP's North America region.