Why Risk In The Cloud Is Good For The Economy

So much has been written about “the risks” of cloud computing, but that risk leads to bigger rewards, especially for small business. And as the engine of job creation, small business will accelerate the economic recovery.

SMBs can launch new operations in the cloud with little up-front capital. This levels the playing field against market leaders and allows for rapid growth.

Seventy-four percent of small-medium businesses expect to use cloud services next year. They are also mobilizing their workforce (see Infographic). This can increase remote worker productivity by seventy-two percent.

But SMBs need to know how to mitigate the risk as they scale their business.

SMBs often lack IT staff or expertise to address security and data issues, especially in the event of a cloud data center outage. And we have seen a few.

According to risk management consultant and CPA Christopher W. Kradjan of Moss Adams LLP, two main factors impact success in a small business migration to the cloud:

  • Best-fit analysis of service and deployment model to IT needs,
  • Clear ownership of in-house operational tasks versus those assumed by the service provider.

As a specialist in SOC audits for IT operations, Kradjan offers these tips to help small-medium businesses successfully migrate:

  • Understand your technology portfolio and develop a longer term transition pathto the cloud to avoid making mistakes from short-term decisions.
  • Quantify risk using a cost benefit analysis that compares current model to cloud model in
    • Upfront capital versus operating expense
    • Staffing resources and administration
    • Lifecycle maintenance costs multiple years out
    • Customization costs
    • Enhanced service quality with the cloud solution
    • Flexibility and adaptability of the cloud solution
    • Resilience: risk-rank potential cloud service providers according to performance in return of service after a disruption
  • Be aware that in today’s early stage of adoption, some cloud providers might only be meeting regulatory compliance on a best effort basis. This could createsignificant risk for cloud consumers, which can be mitigated by strong governance. It could also lead to higher compliance costs, as cloud monitoring practices become more rigorous on testing and prevention of outages.

Finally, the emergence of cloud exchanges for spot trading could lead to a speculative futures market, bringing a whole new approach to risk management.

And this will require yet another look at your cloud strategy.

But with risk comes reward, especially for small business!

This post originally appeared on Forbes.