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What Medium-Sized Companies Need To Consider In The Cloud

Cloud means: Instead of tailor-made suits there are ready-made products. Medium-sized companies that opt for the cloud as a cost reducer should therefore also be aware of the risks.

The cloud is omnipresent in IT today. More and more services are being offered as cloud services, from storage and e-mail to business applications.
There is no question that the cloud also offers opportunities for small and medium-sized companies. For them in particular, setting up and operating file and e-mail servers is often a challenge – with high costs, dependence on service providers and often also availability problems (“our server crashed”). As an alternative to in-house servers, the cloud offers standardized and immediately usable services.

But there are also risks to be aware of before you take the plunge into the cloud. Otherwise the trip could end in disaster.

Can You Keep A Way Back?

The risks can be divided into organisational, technical and financial risks. With regard to the legal aspects, the situation is often still unclear, which is why they are ignored here.

cloud securityIn the organizational area, the most important question is: Is there a way back? Before deciding on a cloud service, one has to consider how one can change providers or return to an internal solution if necessary. The dependence on a once chosen provider – the vendor lock-in – can prove to be an expensive wrong decision.

What is still quite easy with file storage or e-mail services may turn out to be a problem that can hardly be solved in other cases. While a structured document library in a team collaboration service can still be migrated from its own servers to the cloud with more or less effort, business applications can be different and expensive. The first step is to answer the what-if question.

If you have found a provider and everything fits and if you have also received a good answer on how to get data back in case of separation, then there is still a risk: The provider terminates his service. Only if this is planned and with sufficient advance warning can one react to it.

If you look back at the early days of the Internet, there were other cases as well: Hosting providers – and this is nothing more than a cloud service – disappeared from one day to the next. This risk also exists with other cloud services. The long-term soundness of the providers is therefore an important criterion for ensuring that you don’t suddenly find yourself without a service and without data.

The alternative – setting up an internal backup infrastructure and regularly backing up data back to it – is often technically complex and sometimes even impossible. This way can quickly make cloud services unattractive because the advantages of simplicity and the hoped-for cost savings can be eliminated. That’s why you have to think carefully about what you’re doing in the cloud and how high the risk of a total loss of data is.

Cloud Means Ready-Made Instead Of Made-To-Measure Suit

The decision for the cloud is always also a decision for ready-made goods instead of tailor-made suits. An essential feature of the cloud is the standardized provision of services. For smaller companies in particular, this is often more an opportunity than a risk, because they get a wide range of functions at a fixed price.

The other side of the coin: The cloud provider determines the scope of the services. The contracts are highly standardized. Changes in the scope of services and in the contract variants are specified by the cloud provider without the smaller customer really having any influence on them. The only freedom of choice is typically to change providers in the event of contract changes – and that is not always a real option.

Easier Administration ?

cloud administrationThe ready-made goods make administration much easier. No servers have to be bought, installed and adapted. The administrative effort is usually very low. However, cloud services – at least those for companies where there are several users – also have to be managed by the customer. The interfaces are usually simple, but not always completely intuitive. And it’s true that not everything works because it’s a standardized service.

It becomes much more complex if you have a larger number of users who also need to access cloud services from different providers. What is not a problem for a small company with only a few employees, can require the choice between increased administration effort or an often complex integration with the own user administration, for example the Microsoft Active Directory.

These are not unsolvable problems and some providers have just solved the integration with an existing Active Directory well. The integration can then, however, lead to exactly the same project with high expenditure, which one actually wanted to avoid.

Business Cloud Server Customer Support

The individual service that service providers provide today for SMEs in IT – with all its advantages and disadvantages – no longer exists in the cloud. There is no personal contact person who takes care of the customer’s needs. Instead, online support or contact with call centers at the cloud provider are the order of the day when problems arise. Sometimes it works well, sometimes it doesn’t.

Ultimately, you also have to bring some personal competence to the use of cloud services – less than before, but you can’t do without it. And again, the more you want to do, the more you need to know. Those who want to adapt Microsoft SharePoint as a cloud service to their needs must continue to be familiar with SharePoint. And if you want to use SAP services from the cloud, you must of course also be familiar with SAP. In short: The IT service provider who helps you does not become completely superfluous through the cloud.

Risks And Security Of Cloud Solutions

One of the most discussed risks, especially since Edward Snowden, is the security of the cloud. But it is not only the actions of government agencies that cause concern for many, but also the many reports of stolen passwords and other attacks on Internet services.

Even if a differentiated view is recommended, there is indeed a risk that a cloud provider will be attacked and passwords or data will fall into the wrong hands. On the one hand, the larger cloud providers are professionally positioned and can do much more for IT security than a small or medium-sized company. On the other hand, they are also a much more attractive target for attackers of all kinds, from government agencies to organized crime.

There is therefore no doubt that there is a security risk. However, the question arises as to whether the much greater risk does not lie with the customer himself. How well are the customer’s computers and internal network protected? Realistically, the risk here is usually much greater than with the cloud provider – but the effects of a successful attack on a cloud provider are likely to be greater.

Is The Internet Connection Fast And Stable?

The elasticity of services and availability are often cited as advantages of the cloud. From a technical point of view, the elasticity, i.e. the possibility to purchase more services when required or to make the service smaller again, can be assumed to be given for small and medium-sized enterprises. The additional demand of a customer will hardly bring the cloud provider to the performance limit.

While technical elasticity should be unproblematic, availability can become a challenge. The smaller problem is likely to be outages at the cloud provider itself, as has already been the case with large providers such as Amazon Web Services and Microsoft Azure.

The much more sensitive issue in practice is the connection to the cloud provider. In other words, the Internet connection must be up and running. It must be fast enough and stable enough. The server is no longer located in the building, but somewhere, and can only be reached via the Internet.

This often proves to be the biggest hurdle, especially for small and medium-sized companies, especially for companies in regions that are still poorly connected to the Internet. In any case, you should also consider backup connections to the Internet, especially for services that require high availability.

Short Contract Term And Calculable Costs

If you look at the costs, many cloud services are not as elastic as they might have been in the past. Long-term contracts with terms of six, twelve or more months may make sense for a business application, but not for other services from the customer’s point of view.

Basically, you should be able to easily add and remove additional users. The term of the contracts should be very short. And above all, the costs must be calculable.

In particular, costs that depend on data transfers, stored data volume and other variables that can change quickly are delicate. This can lead to the costs suddenly being much higher than planned. The more flat-rate the cost model of cloud providers is, the better.


Once you’ve decided on the Business cloud server, the question is how to find the right provider. The first step is simple: Cloud services can be found quickly on the Internet. In addition to the cloud providers themselves, there are also Internet providers and other service providers that deliver business cloud services, especially for SMEs. Standard services such as Microsoft Office 365 can often also be obtained from them.

The next step is to look at the three biggest organisational, technical and financial risks. These criteria quickly help to separate the wheat from the chaff. Often there are also test accounts to get to know a cloud service in advance.

Before signing the contract, there are still two things to clarify. One is migration to the cloud. How do you get from the service you use today to the cloud? Not only the way back, but also the way into the cloud must be planned.

The other obligatory task is the exact checking of the scope of services and the contract. Here it is not just a matter of clicking, but of reading. Even if the contracts are often very long and consist mainly of clauses in favor of the cloud provider, this effort should be made. This in particular can help you to have realistic expectations when you finally take the step into the cloud.

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