While there has been much talk about cloud computing in large enterprises, the term is still newly associated with small and medium-sized businesses and remains a bit of a mystery to some.

A recent HP Canada-Angus Reid survey suggests that only 47% of small businesses are using cloud computing services, such as remote e-mail and messaging or remote security and data services.  The hesitation for some SMBs to adopt cloud computing could be the perception that it is confusing, but in reality it's not as difficult or complex as some might think.  You may actually be using it already: accessing the cloud can be as simple as using Hotmail, Gmail or Yahoo! Mail.

What is cloud computing?

Let's start with a simple definition of cloud computing.  At a high level, cloud computing can be defined as a model in which shared resources are provided over the Internet to multiple users. This could include IT infrastructure such as servers, software or storage. In all cases, the resources are fully managed by a provider - meaning the end-user only needs to only have a computing device and an Internet connection to access cloud-based resources, as opposed to traditional models that rely on locally installed hardware, software or server technology.

There are two main types of clouds: the private cloud and the public cloud.

The private cloud is a proprietary network or a data center that supplies hosted services to a limited number of people. A private cloud could exist within a company network, allowing only employees of a certain organization or division access the software or information stored within that cloud. In a public cloud, core resources such as a software or storage platform are shared among multiple users via the Internet.

For most small businesses, public cloud services provide the most cost effective solution because the resources are shared across multiple customers and tend to be highly standardized and automated.  Some have likened it to that of public utilities - instead of each household or business building and maintaining their own electrical generators and providing their own utilities, they contract out to a public utility company that provides for their needs.  Popular public cloud services include Salesforce.com, GoogleApps or Amazon EC2.

Is cloud computing right for my business?

Cloud computing has the power to help SMBs gain a competitive edge in the marketplace by addressing some of the most common pain points such as generating sales and top line revenue, managing cash flow and maintaining the flexibility to quickly adapt to changes in the business.

With cloud services, businesses reap the benefits of not having to deploy a physical infrastructure like information and email servers, storage systems or shrink-wrapped software. As a business owner, you are renting the service and pay a usage-based fee or monthly rate for delivery. This means less time and money is spent managing the technology because it becomes the responsibility of the cloud service provider - leaving more time and resources to focus on driving business.

When it comes to flexibility, a cloud computing model is also ideally positioned to help organizations increase productivity by ensuring information is available when, where and how it's needed.    With an Internet connection, employees can access cloud-based services or software using many types of technology, such as a desktop, notebook, a tablet PC or even a smart phone, making it easier for users to gain access to information and programs anytime, anywhere.  This flexibility means easier manageability, enhanced security and accelerated ROI.

Cloud computing also makes it possible for businesses to access enterprise-grade software and IT resources that may be otherwise unattainable because they are too expensive or complex to deploy locally.  For example, instead of physically installing the latest inventory or point of sale software on each individual computing device, acquiring new hardware infrastructure to store the information and maintaining software updates over the long-run, a cloud-based application allows an organization to access many of the same functionalities without the up-front investment . In most cases software delivered via the cloud is automatically updated and maintained by the provider and utilizes the provider's infrastructure.  Security for the data stored in the cloud is also maintained by the provider.  And because it is a shared model, the costs associated with the service are split among multiple organizations.

Cloud computing is a staple for many enterprise-level businesses, but as you can see, there are many compelling reasons why it is a great option for small and medium-sized businesses as well. Is your business ready to move into the cloud?