What is cloud computing?

Cloud computing means using servers, storage and software that someone else runs, reaching them over a network, and paying for what you use. If your email or your shared files open in a web browser, you are probably using it already.

The definition used here comes from the US National Institute of Standards and Technology (NIST), and the Australian Signals Directorate (ASD) relies on it in its own cloud guidance. NIST describes a shared pool of computing resources, such as networks, servers, storage and applications, that can be set up and released quickly with very little effort from the provider.

The five features that make a service cloud

• Self-service. You can add a server or more storage yourself, when you need it, without waiting for a person at the provider.
• Reached over the network. It works from phones, tablets, laptops and desktops.
• Pooled. The provider’s equipment serves many customers at once and is handed to whoever needs it. You generally do not know which machine holds your data, although you can often choose the country or the data centre.
• Elastic. Capacity grows and shrinks with demand, in some cases automatically.
• Measured. Use is metered, so you and the provider can both see what was used. The bill is typically worked out from that.

NIST calls these essential. A server rented at a fixed size for a fixed term, and set up by a technician each time you want a change, is someone else’s computer without being a cloud service.

What it changes for a small business

Hardware becomes a running cost. You no longer buy a server sized for your busiest day and then own it whether you use it or not. You pay for what you use and adjust the amount as the business changes.

The work of looking after the equipment moves too. The provider runs the buildings, the machines and the network. How much more it runs depends on the service. With a finished application such as web-based email, the provider manages almost everything underneath, and you manage your users and a few settings.

What stays with you

Security in the cloud is shared between the provider and the customer. ASD’s guidance for small businesses says you always keep some responsibilities, and that the risk of your data being stolen, changed or locked away from you cannot be outsourced.

In practice that usually means deciding who can get to your data, using only trusted devices, signing in with multi-factor authentication, and finding out whether the service backs up your data or expects you to. ASD also suggests asking each provider for the document that sets out who is responsible for what.

Where to go next

Some systems are better left where they are. When the cloud is the right choice, and when it isn’t works through that decision. If you want help planning a move, see cloud services.