4 Tips for Choosing a Cloud Computing Vendor

By now, most business owners are using some form of cloud computing. (In case you aren’t one of them, cloud computing is any software or computing resource made available over the internet.) Some may be using it to reduce IT costs and increase efficiencies, taking advantage of features like on-demand pricing, collaboration, and ubiquitous availability. Others are proceeding more cautiously, waiting for the technology to mature while issues like data privacy and security are better defined.

When moving some (or even all) of your IT operations to the cloud, there are some key points that must be considered when selecting a vendor. These four tips can help you decide which vendor best fits your business.

1. Compare products

For many of the most common cloud-based business applications, you will find multiple vendors, each with different feature sets, pricing models, and overall value statements. Some applications, such as customer relationship management (CRM), are dominated by a single, large player (in this case, Salesforce.com). Other applications, such as email and calendar tools, are offered by many reputable vendors with a long history of providing secure, reliable cloud-based services. When comparing products, you should understand cost, reliability, feature sets, and company stability in order to find the best match for your business. Google, Microsoft, and Amazon all have solid cloud computing offerings and are trusted names in the industry. Although many smaller companies offer competitive products with attractive pricing, be careful; like any small business, start-up players in the cloud computing space may not be around five years from now. Have a contingency plan in place, just in case your provider goes bankrupt (see point 4, below).

2. Freemium is not always free

One of the main reasons companies consider moving to the cloud is cost savings. But even in the cloud, costs can quickly add up. Many vendors offer a pricing model called “freemium” where base features are provided for free, but once any premiums are needed, charges are incurred. The popular cloud storage service Box is a good example. Box is free for one user who stores up to five gigabytes of data in the cloud. Start to add more users or storage capacity, however, and prices jump to $15 per user per month.

3. Understand the terms

Most cloud providers have a take-it- or-leave-it approach to the contractual terms associated with their service. If a small company wants to use Gmail, there’s no one at Google to talk to, let alone negotiate contract terms. That doesn’t mean that companies should ignore licensing terms. It’s important to understand key issues such as uptime guarantees (do you get your money back if the provider goes down?) and data privacy. If you’re uncomfortable with certain contract terms, go elsewhere. For example: Any future plans to expand your business into Europe? If your cloud provider can’t guarantee compliance with strict European data privacy laws, look into other vendors. Just because others are using a particular cloud provider isn’t sufficient justification for you to use it.

4. Backup your data

Like any other IT system, cloud providers have outages and service disruptions and occasionally lose important data. It’s extremely important that companies using cloud vendors have data recovery and operational contingency plans in place. Do you have all your customer and sales lead information in Salesforce.com? Are you using Intuit’s cloud-based QuickBooks for your financials? What would it mean to your company in the very unlikely event that those services went down for a few days, or worse yet, lost your data? You better have a backup copy of that data somewhere else. The old strategy of dumping your company data on a removable hard drive or DVD and storing it in a safe deposit box is still a good solution.

Cloud computing promises to revolutionize the way people consume software services. However, these four points are only the start to understanding the full impact of using the cloud before taking the leap.